Full Year 2020 argenx SE Earnings Call
Good morning, My name is Andrew and I will be your conference operator today welcome to the <unk> full year and fourth quarter 2000, Twenty's financial results Conference call. At this time I would like to welcome everyone to the call all lines have been placed on mute to prevent any background noise. After the speakers' remarks there.
There will be a question and answer session if you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if you'd like to withdraw your question Press Star then two.
If you require operator assistance. Please press Star then zero.
Please note this conference is being recorded.
Thank you I'd like to introduce Beth they'll Jocko, Vice President of corporate Communications and Investor Relations you May begin your conference.
Thank you our press release was issued earlier today with our full year, 2020 financial results and business update which can be found on our website along with the presentation for today's webcast before we begin I'd like to remind you on slide.
To that forward looking statements may be presented during this call may include statements about our future expectations clinical development regulatory timelines the potential success of our product candidates financial projections and upcoming milestones and.
Actual results may differ materially from those indicated by these statements are genex is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law.
I'm joined on the call today by Tim and then Howard Merit, and Chief Executive Officer, Eric Castaldi, Chief Financial Officer, and Keith What Chief Operating Officer, I will now turn the call over to chip.
Thank you Beth and good morning to everyone on the call and we appreciate your joining.
I am proud of the exceptional progress we made in 2020, despite many unexpected global challenges.
We believe we are closer than ever to reaching patients and strongly positioned to create long term sustainable value for our shareholders.
I'd like to briefly highlights some recent milestones and then provide updates on our deep and differentiated pipeline per.
As we announced earlier this week, we are pleased with our BLA was accepted for review by the F. D. A.
This decision is an achievement for us as a company, but more importantly, we are thinking about what this means for our patients.
We see two very real unmet needs of people living that M. G.
The heat about it from patients directly and from their support us and we are hopeful that ive got teach them up may provide a new treatment option for this community.
The acceptance of our BLA and serves as another gating event on our path to our first commercial launch and we remain sharply focused on execution at every level of the organization.
Between now and the potential approval of I've got to dig them up we will be working and collaborations with the F. D. A to answer the questions and coordinate site inspections.
I can tell you that we are planning to be ready well ahead of our December Purdue for dates because we know that patients are waiting.
Still these are exceptional times and with much uncertainty ahead.
We are proactively planning for a launch in various scenarios fully virtual for one or now.
And now that we have more time for the Covid vaccine program to be implemented only partially virtual.
We continued to make progress and engaging with a large proportion of our target stakeholders in a digital environment, which Keith will discuss later in the call.
With that said, we would welcome the opportunity for our field force to hold meetings in person free.
Cardoso scenario, we plan to use every day, we have and 10 launch to further implement these important campaigns.
The U S remains our priority for our first launch and our largest markets.
But we are also well underway with preparations and Japan, where we expect to file our marketing application in the first half of 2021.
This sets us up for a potential additional approval shortly after the U S.
And the European Union, we are seeking scientific advice and the first half of this year with plans to file our marketing authorization in the second half.
However, European General manager, who is very experienced and market access and is working on a strategic reimbursement plan in the highest priority countries.
Secondly, we recently announced a go decision to continue enrollment in Registrational and heat trial.
All you're waiting sub Q and got teach them up and see I D. P.
With this update and got pick them up and now has four out of four successful proof of concept trials under his belt.
This further emphasizes the breadth and potential before as food and I've got to dig them up and validates our cancel indication selection process and innovative trial design.
We will continue to leverage the same comprehensive strategy with future indications, which we belief and strengthened our leadership in D. F CRM class overall.
Third.
Our journey has a history of raising capital on the back of strong data.
And the recent financing was no different.
And the one 1 billion and gross proceeds strongly position us for the launch and will facilitate the expansion of our diversified pipeline and the growth of our team.
On that note.
And would like to take this opportunity to thank and recognize the outstanding of Gen X gene and.
We have grown to over 450 colleagues over the past year and plan to increase to approximately 750 in 2021 across our four offices.
In particular.
I would like to thank our Chief Financial Officer, Eric Castaldi, who has been with our journey since 2014.
As stated in the press release from this morning, we have started a planned transition process to recruit a U S based successor for Eric.
This is part of our evolution to a commercial stage company.
And will all happen in close coordination with average.
Executive leadership team and the hygienic sports.
We are very grateful for Eric's long tenure with the company and for his invaluable contributions.
Moving on to the pipeline updates starting with they've got did your mobs.
We continue to believe that we have a first in class and potentially best in class F sphere and antagonist.
The structure and mechanism of action and I've got teach them ups are depicted on slide number four.
And you can see that Ive got teach them up its unique due to our close collaboration with Dr. Sally Ward.
They've got teach them out as the only other G. One smart fragment, which binds to F sphere and in a way that mimics the natural ligand and preserves the ph dependent binding of endogenous <unk> F C.
In our studies, we have not observed and effects on other sheet and proteins like I G. N I G E or a reduction of human serum albumin.
To date over 350 subjects have been dosed with <unk> cartage amounts and we continued to observe a favorable tolerability profile, which has been observed to be consistent across indications.
On slide number six.
We also see a consistent PD effect across trials that has translated into promising clinical benefits.
The phase three adapt trial demonstrated a response rate of almost 80% across two treatment cycles.
Fast onset of action.
And of response and the potential for individualized dosing.
The consistent PD effect also enabled our ongoing subdued bridging strategy for M. G as seen on slide number seven.
This study is registrational non inferiority trial, which compares the pharmacodynamic effect of thousand milligrams sub Q and I've got teach them up with 10 milligram per kilogram IV I've got to Jim ups and is expected to enroll approximately 50 patients.
The primary endpoint will be taken at day 29, and thereafter, we will continue to build the safety database to support the filing of the sub Q B L. A.
Slide eight.
See I D. P is the second I've got teach them other indications within our neuromuscular franchise and the fourth established proof of concept indication.
Our covered to go decision earlier in the call. So I will just mention a few key points.
We believe he designed it very innovative trial with adhesive using screening criteria to identify patients with an active confirmed diagnosis of see IDP.
We also included a planned interim analysis.
Before committing valuable time and resources to running a registrational program, we wanted to be confident of the role of the older antibody into disease pathophysiology.
We set the bar high using precedent trials to define our thresholds and we met the criteria.
We can now move forward with confidence as we opened new trial sites for enrollment in this registrational trial.
C and D piece and indication, where there has been little innovation, and we and advancing the program as quickly as possible.
Next we are enrolling patients and other ITB trials as well as our PV trial, which can be seen on slides nine and 10.
For IDP, we have brought forward our sub Q strategy based on feedback from patients and physicians and are running two concurrent advanced trials, one with IV and one with sub Q.
We expect these trials will support registration of both formulations.
In pemphigus, we are evaluating sub Q and got teach them up in the address Registrational trial and as part of this are specifically evaluating the ability to taper patients off steroids.
We listen to patients described the ongoing burden of current treatments and incorporated this evaluation into our trial design.
As you can see we take a forward thinking approach when designing our trials based on feedback from physicians and patients.
We will continue to infuse that feedback into future trial designs. So that we are optimally positioning ive got taken them up within current treatment paradigms.
This is true for our fifth and sixth indications, which we will disclose closer to the start of clinical trials.
Turning to slide 11.
We believe the debt is a broad landscape of IGT mediated severe autoimmune diseases for which I've got to take them up may provide clinical benefit to patients.
We will continue to rollout indications ourselves and.
And we'll also expand and accelerate the pace of other got teach them on development globally through our strategic agreement with XI lapse.
Our Mg launch and the U S is just the beginning.
Beyond I've got teach them up and we look forward to sharing the first set of clinical data from our Jennings from 17, our second pipeline candidates with broad potential in severe ultra immunity.
We remain on track to provide data midyear from a phase one healthy volunteer study from both IV and subcutaneous patients of organics on 17.
We expect to provide information on safety and Tolerability, PK and PD effects bioavailability and the selected phase two dose and dosing regimen based on free C. Two levels.
Slide 12.
The first indication we have highlighted for our journey from 17 is multifocal motor neuropathy, or and then and.
Which fits squarely into our neuromuscular franchise.
You can see our neuromuscular focus taking shape with N G C IDP.
Our fifth I've got teach them other indication our journey from 17 and our journey from 19, we know that the investments we are making now in both the neuromuscular and other franchises will benefit us overtime as the franchises grow.
Slide 13 quickly on Q2's them up for which we have a strategic collaboration with Janssen.
We have shifted our priority for this program to the elevate trial evaluating a triple combination of CUSIP teaser map venetic, Lex and ease of cytidine.
This was based on one.
Interim phase two data from the culminate trial and two day shifting treatment landscape for newly diagnosed elderly AML patients where phonetic lax has emerged a standard of cash.
He and evaluating elevate data.
We will look at overall response rate durability of response and safety and Tolerability to consider where she was a teaser map could address unmet needs in this indication.
With elevate and the future of the program overall.
We'll continue to make data based decisions on the path forwards for Qs on Tuesday map as we do with all our clinical trials.
Slide 14.
We will not spend time on our broader pipeline today, but we are committed to providing updates as necessary.
Investing in our immunology innovation program continues to be a core part of our pipeline strategy.
As we look towards commercialization, we seek to create optionality within our pipeline whether through wholly owned candidates pilot programs or asset centric spin off companies.
We believe this is an important part of our growth story as we transition into an integrated immunology organization.
I will now turn the call over to Eric for our financial results.
Thank you team on slides 15, and you will find our full year 2020 operating results, which are detailed in today's press release on that.
The only filings.
Operating income decreased by $28 1 million for the year ended December 31st 2020.
And to $54 5 million compared to $82 6 million euros for the year ended December 31st 2019.
The decrease was due to the milestone payments we achieved in 2019 for the stuff on the first in human clinical file on behalf of the collaboration partly offset by a home and Youll completion of the transaction price related to the young and collaboration and the increase in other income.
R&D expenses increased by $127 8 million euros for the year ended December 31st 2020 to $325 5 million euros compared to 197.7 million euros for the year ended December 31st 2019.
The increase from 2020 and resulted from higher external research and development expenses, primarily related to our <unk> mode. Because that's usually mob and also clinical and preclinical pulled on us.
Furthermore, the personal and expenses increased due to the increased headcount as planned.
SG&A expenses total $149 4 million euros for the year ended December 31st 2020.
Compared to $64 6 million euros for the year ended December 31st 2019.
The increase primarily resulted from a year on the expenses and consulting fees related to the preparation of a possible future commoditization of and getting demand.
For the year ended December 31st 2020 financing expenses amounted to $1 4 million euros compared to financial income of $14 3 million euros for the year ended December 31st 2019.
Financial expenses corresponds mainly to the decrease in net asset value of money market funds. Following the impact of the COVID-19 outbreak on the financial markets.
Based on our current operating plans, we expect our cash burn rate to increase significantly in 2021, approximately doubling compared to 2020.
This will support our transition to an integrated immunology company, including the build out of global and cost you and drug product inventory and Abel first expected commercial launch.
Advancement of our clinical stage pipeline and our continued investment in the immunology and the innovation program and will now turn the call over to Keith to discuss our commercial preparations in more detail.
Yes.
Thank you Eric Slide 16.
I would first like to take a moment to highlight and important event for the M. G community that occurred over this past weekend rare disease day. Its purpose is to raise awareness of the challenges that the rare disease community faces each day and to demonstrate our solidarity alongside them, including people living with M. G.
We had our Gen X are United by a common purpose to pursue a better tomorrow alongside the M. G community, we know that the best way. We can do this is by listening and learning we hear directly about the significant unmet need that still exist.
The symptoms treatment burden strain on relationships and mental health and struggles. These patients face just to manage day to day activities. These stories motivate us every day and the work that we do.
Slide 17.
With this in mind, we are very excited to hear from the FDA. This week that our BLA has been accepted for review we.
We are now working towards a <unk> date of December 17th 'twenty 'twenty, one and I can assure you that we are working hard to be ready for a potential commercial launch well ahead of that time.
We have been building out our commercial capabilities and personnel for almost two years and we know what we have to do to prepare and these next several months.
We also announced the opening of our Preapproval access program. This week, we've been getting requests for <unk> from physicians and we want to accommodate them where possible as part of our commitment to mg patients and their supporters.
We also want to honor our commitment to the patients that participated in our global registration trial to keep them on therapy as long as possible more than 75% of patients who entered our open label extension are still on study for over two years now.
18.
With the acceptance of our BLA. The clock has started and we are accelerating preparation across multiple fronts building out our field team, including the sales force engaging with patients physicians and payers and ensuring appropriate commercial drug supply at the time of launch.
Let's start with our team.
We now have over 100 colleagues working out of the Boston office or in the U S field, including medical research Liaisons thought leader liaisons and reimbursement account directors.
We have launched our hiring process of our sales force with the plan of being fully staffed at least four months prior to the anticipated launch.
Based on the interest and experience level, we're seeing from candidates. We are confident we will have the right team in place.
Moving to our patients we launched several patient centric efforts last year, including Mg, United which is our digital platform to engage with the M. G community and provide clear credible information. We now have over 20000 patients and caregivers, who have opted to receive information from us on Mg.
We also launched a real world evidence study my real World M. G, where we have over 1000 participants enrolled we collaborated with global patient advocacy groups and launching this study with the goal to better quantify the real world burden of Mg, including hospital visits loss of productivity direct and indirect medical.
Cost treatment side effects and psychological implications.
Moving to our physician education and engagement efforts, which we are rolling out through disease state awareness campaigns and CME programs. This will be critical to our launch success because F. C R and as a target and Mg is not yet well understood specifically details on our multi channel approach include.
The launch of our disease state awareness campaign called Gmg cycle. The purpose of this campaign is to educate health care professionals on the role of the antibody and Mg and on F. C. R N as an integral pathway to disease.
We have had significant engagement from this campaign, reaching 62 per cent of the target physician audience to date.
We are also planning peer to peer marketing programs to start once we launch we have been learning from our peers, who have had precedent launches and a COVID-19 environment and they emphasize the growing importance of this channel physicians are faced with new challenges treating patients virtually and because of this there is and increasing really.
On input from peers, and neurology thought leaders for new treatment considerations.
Okay.
And planning for our various launch scenarios. We are also using market research to learn more about physician preferences and to tailor our engagement approach.
With our December Paducah date, we have we may have the option to offer both virtual and in person and engagement with health care professionals, because even in a post COVID-19 environment, we know that not one size fits all.
F got Gigamon and being a first in class F C R and antagonist, which means we have the opportunity.
Be a thought leader to help to the health care community on this new modality and it also means we may face a more gradual uptake as our education efforts take effect.
In terms of payers and we continue to have valuable discussions with both national and regional payers.
We know that at launch we will not have a permanent J code and that payers will not have a dedicated policy in place for F Guard kick them out and we're working on building out our patient support system to help patients and providers navigate the complexities of the reimbursement environment.
We still know that early and the launch that early and the launch reimbursement challenges will be a potential hurdle to adoption.
We have a strong manufacturing strategy and place with our best in class partner Alonza. We currently have facilities in the U K and Singapore and have plans to open a third site and the future to accommodate growth from our planned expansion into new territories and indications.
In addition, we have partnered with better for fill and finish and Cardinal Health for third Party logistics. We recognized ahead of the global pandemic that ramping up supply chain efforts would be prudent given the broad potential of F. Garching them on and our plans to open a preapproval access program.
We are glad that we did show particular, and we've seen continued pressure on the global supply chain and supporting the vaccination campaign.
We are in full preparation mode for our launch and we plan to use every day that we have to further engage with our stakeholders and build out our inventory.
On slide 19, before I hand, the call back to Tim I would like to reemphasize. The point that we made earlier on the call. AMG is just the beginning we are building a solid foundation, which we can leverage across indications and molecules in the future. This will allow us to benefit from certain economies of scale as the resources we are.
And today and relationships. We are building now will be advantageous for the rest of our pipeline and and the long term with that I will now turn the call back over to Jim.
Jim.
Thanks keeps turning to slide 20.
In summary, 2020 has been an outstanding year for our genetics and we look forward to building on our accomplishments in 2021.
We are proud of what we have achieved including.
The acceptance of our BLA for <unk> in Mg.
Demonstrated proof of concept in four indications and and ambitious global development plan for <unk> Gupta GM up.
A second autoimmune assets from which we will show the first set of clinical data this year.
Continued expansion of our differentiated pipeline through our IP.
And our team, which continues to grow across our four global offices to support our success.
2021 stands to be another pivotal year for the company and we are strongly positioned to create long term shareholder value.
And as we continue to grow we aim to stay true to what makes us our Gen X. We are firmly rooted in groundbreaking immunology research, which enables us to innovate.
We are committed to growing through co creation because of diverse opinions and experience challenge us to do better.
And our patients humble us and are at the core of all we do.
With that I would like now to hand back the call to the operator to begin the Q&A.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
We ask that you keep to one question to allow enough time for everyone.
At this time, we will pause momentarily to assemble our roster.
The first question.
Comes from.
You are on werber of Cowen.
Please go ahead.
Hi, guys. This is brendan on for your own and thanks very much for taking the question and congrats again on a great quarter on all the great progress.
Couple of quick ones from Us and I guess first on I T. P M.
And he is ongoing here can you just give us kind of a quick update on on your thinking for the expected treatment regimen and obviously the two phase III share support registration from both on bar, you're kind of thinking about induction dosing with IV and then transitioning to sub Q and.
And do you think any additional studies would be required for that and then I think just quickly on AML can you give us a sense of where you're thinking the bar is for improvement with the triple Crown.
Combo treatment over the doubles I would kind of encourage you to expand development.
Thanks very much.
And thank you Brendan and thank you for joining us today I'm going to hand over question number one to my colleagues and Keith and just for clarification and streamline to phase III Global registration campaign to now run a IV only study next to a sub Q only study remember this.
And just to remind me, which we did last year and full Covid time. So these two studies together I think and has the right to qualify for registration and Keith.
And I invite you to come and on our views on the treatment regimen, which we'd have in mind. Please.
Sure happy to do so Tim.
<unk> studied that we're running and I T. P is utilizing the halos I'm enabled sub Q. So it is the same dose that we use and the C. I D. P trial, and remember that 1000 milligrams flat dose is non inferior to 10 milligram per kilogram IV. So there's no there's no induction dose needed. The one trial is pure IV.
And with 10 milligram per kilogram and the other one is sub Q with 1000 milligrams flat dose. So we expect both of them to be able to stand alone and be registration enabling.
Okay. Thank you Keith and then on the email question I think there's a firm new bar set by and if you Alex study I think that the Ollie's Ah study testing the combination of phonetic lax and cytidine.
And what we saw was approximately 37% CR rates.
66, 7% accumulated CRH and on overall survival going up to 15 months. So we believe this is the new standard of care and the newly diagnosed elderly AML population, which is unfit for intensive chemotherapy and bone marrow transplants. So this is the path to beach and of course the other.
And as I mentioned, which is important and in this study Brendan and the safety can be safely at Qs appears on that on top of a combination of two drugs, which of course commit some significant safety burden for the patient.
Thank you.
Great. Thank you.
The next question comes from David Miller, and Garten of Wedbush. Please go ahead.
Hi, Thanks for taking my question I had a question now that you have.
Additional experience growing experience with patients from the open label extension.
Could you you know.
Describe.
The number of treatment cycles, such are beginning to see and some other patients who are who have been treated the longest thank you.
David.
Youre right I mean, it's Keith alluded to more than 75% of the patients are still in the open label extension study, which I think it's a very exciting and we start to see the shaping of what is likely going to be the real world distribution of the Bulls and cadence. So in the first portion of the open label.
And we have patients switched and followed the mandatory cycles of the adapt study with EBITDA.
Bank loans are medication and and the second portion of that will indeed see.
Depends on what you can see the real world and utilization of the product it's too early to come on and will be seen but we are planning on the regular updates and attitude.
Clinical conferences and of the open label extension study so stay tuned and information is on its way.
Okay. Thank you congrats Eric.
Yeah.
Thank you David.
The next question comes from Matt.
Matthew Harrison of Morgan Stanley. Please go ahead.
Hi, This is Max score on for Matthew Thank you for taking our questions.
We were wondering if the FDA provided any rationale for the standard review and their letter and do you expect the agency to hold an advisory Committee meeting. Thank you.
He and Mike good to hear from you and thanks for joining US today. So we can only guess what the motivation was of the F. D. A however, if you looked at and overall landscape and I think it's fair to say that this is this is a reasonable outcome open FDA images of course and heavily burdens and focused on on the Covid.
Pandemic.
And I think in the letter the FDA states that debt currently not planning on a panel, which we think is encouraging news of course, you every day.
The FDA will always reserve the right to organize a panel.
And when they deemed it necessary during the review and with a fine. So so far so good but these day cautiously optimistic thank you.
Thank you.
The next question comes from <unk> Ahmed of Bank of America. Please go ahead.
Hi, good morning, and thanks for taking my question and Tim just wanted to ask you just given on the back of your announcement that you won't be and moving forward, let's see I D. P and we saw that a competitor.
D C D and decided to discontinue their program so and obviously, it's good in a sense that there is less competition imminently and are there any other obvious conclusion to come to and what their decision to discontinue their program in terms of its superior profile of your product perhaps to theirs.
Yeah.
We think it does and thanks for joining us today, and look and I believe that in debt pessimists on earnings call and you should be alluded to the fact that they would disclose the data of the phase two share. The deep trial later this year, so that's something which will be the eagerly awaiting.
That we'd like to study data and and they database decisions now and.
First of all I think both molecules out of course fundamentally different and I think that is a distinctly different designs and molecular design between and I've got to Jim ups and.
And the full size high affinity monoclonal antibody and but we also believe debt.
Operating over the study design and really contributed to a strong positive go decision and in our case. So we would be confident and our data we are confident and the planning and the path forward and and of course, we're going to study debate on if and when they become available.
Okay. Thank you.
The next question.
The next question comes from Danielle Brill of Raymond James. Please go ahead.
Hey, good morning, Thanks, so much and your question on.
Can you just remind us why is required in terms of data for our Q.
Q filing beyond shine PK and PD equivalents.
Look what types of data and getting any long term safety requirements and that sort of thing. Thank you.
Hi, Danielle thanks for joining us today I think is spot on.
And can see from the disclosure today primary endpoint is taken on day 29, and that constitutes a percentage of ITG reduction and.
At this point in time, and so that's relatively straight forward.
The gating and data of course from a timing point of view would be the safety data. What we have been saying publicly that is that you know we were quite pleased with the outcome.
The patients of the FDA on the size.
And magnitude of the safety database, but we have not given any further detailed and so stay tuned and that this may be newspeople disclose later.
Okay got it thank you.
Thank you.
The next question comes from Greg Savanna Bitch of Goldman Sachs. Please go ahead.
Good morning, good afternoon, and thanks for taking my questions.
If I could maybe squeeze into the first and maybe this is for Keith.
I think on the last call you seem to be walking down launch expectations.
And I just wanted to get a sense of.
You know where you are in the process of building awareness.
On four F scar tissue Mod.
Clearly walked through the different initiatives that you've got going but maybe to use a baseball analogy like what inning do you think that the organics is and in terms of.
Building up and.
Wariness for not only the F C R and mechanism of action, but also for <unk> to Jim on itself and then maybe a second question is maybe.
Eric.
I could ask a financial question, but given the doubling up.
Cash burn expected this year.
Could you perhaps provide some comments around is that equally distributed between R&D and SG&A that more heavily weighted towards R&D given that you've got so many late stage trials that are ongoing and and.
And then in terms of Capex, what should the expectation be for 2020, one relative to 2020. Thanks.
Yeah.
Great Greg. Thank you for the question and and what I want you to personnel that my overall view on F garching commodity and treating Mg patients has not wavered and we believe that up to 65000 patients and the U S 20000 of them will be appropriate patients for F Guard Gigamon.
But what we do believe and I've said it.
Gradual steady launch.
And the reason being is this is a first in class mechanism of action.
And this is a mechanism of action that really has been hasn't been taught in medical school and so many of the physicians that treat M. G were not previously familiar with F. C are and so we've got a great deal of health care professional education to do I think that we also look at this of happening during.
And Covid times, where a lot of the education was taking place virtually.
I'm actually quite encouraged with our Paducah date that we may have the opportunity to launch as I said in the prepared statements not only virtually but also in person. So I think that benefits or our ability to be able to get this message across and it's also going to benefit patients being able to see their physician and person.
Because as we spoke the last time. So many of these calls are taking place. So many of these appointments are taking place via telemedicine with physicians. So look remember at the beginning we will not have a J code there will not be policies in place at most of the payers and so this will take a little bit of time.
And as far as what inning are you know free for your baseball analogy. All I can say is that you know I think we feel pretty fortunate that J code is no longer something that you apply for once a year and now you can on a quarterly basis and so I'd expect this to be a really hitting our group here sometime in the towards the that six to seven.
Month, when we get that J code.
Eric.
Yes, so with regard to your question on the distribution between R&D and the SG.
SG&A and commercial expenses clearly.
In 2021, and you will continue to see the increase in R&D expenses, and they're going to have seven fifth street and gold trials ongoing so.
Clearly I mean the system.
But Jim and Dorothy a personal expenses on <unk>.
Obviously with the preparation of the launch commercial expenses also on Vinci, Christina and what we gave as an indication that the build rate for 2020 ones on a global compared to last year celestial we have ability to about 400 million the loss.
And so you could expect some senior on 800 million bonus for this year.
In terms of capital expanded U a E mobility and portals, and we don't plan to enlist and <unk> capex.
And we're gonna hub, obviously sitting on the balance sheet needs inventory for Siggi mode already at the end of 2020.
And out of 20 million blouse.
The increase significantly as we could double click on children.
Okay. Thank you very much.
Okay.
The next question comes from Yahtzee and Suniga of Guggenheim. Please go ahead.
Oh, Hey, guys. This is Eddie on for <unk>. Thanks for taking my question and congrats on the year.
And just your thoughts on the lipid changes that we're seeing with one of your competitors and if it's possible that the FDA might require some sort of monitoring for that class and did you provide any data to that and feel like convinced on that you're confident that you won't need any monitoring and then just quickly for the the preapproval access program that you just initiated can you give us a sense of how many patients.
We expect to be on that by the time, we launched commercially thanks.
Thank you for the question and some candidates Christian to my colleague Keith, but let me start with the first one.
Let me repeat that love all at state and antagonist, Amit equal I think they have distinct and different molecular designs.
Faiths of the antibody.
And and complex is fundamentally different because we have published and you also see and emerging differentiated clinical profile between the molecule, so and our BLA filings and extensive datasets discussing all these spot on aegis and detail and the FDA will be able to look at the data and make data based on observations and and.
And Q&A.
And we do not think this is a class effect and we know something.
And look at any specific columns or question on debt. So far so that net has continued to be and database a conversation that we are confident and our own datasets.
And through July and thinking question and I'd like to a number of patients.
Sure I'm happy to we're really excited to announce our preapproval access program, because we have been getting requests.
And from physicians, if they could get access to <unk> to treat their mg patients. So we're really pleased to be able to do so at.
At this point, we have set aside a certain amount of clinical supply to be able to treat those patients but for me to speculate with an actual number of what I think the number of patients we will enroll.
Between now and the Paducah date, and it would it would be a guess so that wouldn't really be valuable to you. The one thing that I do want to call out is this preapproval access program is for patients and the U S and also in Europe. So we're really excited for the patients that we'll be able to benefit from escarcega them on.
Thank you.
The next question comes from a cash to worry of Wolfe Research. Please go ahead.
Hi, This is Amy Li on for a cash thanks, so much for taking our question.
So first on the MG launch how much interest have you gotten and your transfer book program and how quickly can you convert a patient on top of any patients currently on your open label expansion trial to commercial patients upon approval and and then another one I just wanted to hear your thoughts on the kidney disease market for anti F.
And specifically and conditions like and that associated renal vasculitis.
And we see a relatively large patient pool, but diseases predominantly ITG I don't know about each other than we've seen recently chronically and efficacy data from complement inhibitor and then finally would love to hear the current and household on what's causing the Albion and dropped and competitors and Anthony and advanced LDL increases are due to albumin jobs.
And I think the thyroid eye disease workers and that everything thank you so much.
And Kimberly and Keith why don't you take question number one on the.
And people people program and then that will continue with the question on kidney opportunities and the albumin and story okay.
Happy to do so Tim So first of all this week is the first time, we've actually gone public with the pre approval access program I can tell you that the request that we have had over the in the past have been from physicians that most of them participated in our trials because they're the ones that are educated about the F. C. R N and.
The mechanism of action and how Escarcega, Bob really works as well as they have some of them have seen firsthand experience of how <unk> has benefited their patients now since we put this out publicly and I can tell you that the patient advocacy organizations or are aware of this program.
That we did the increase of the number of <unk>.
Physicians, reaching out to us has gone up but we're in early days here. So again I don't want to make any projections, but there definitely is an unmet medical need and M. G and our adapt trial data our data has been pretty impressive so I expect to get quite a few.
Quite a bit of attention towards this thank you.
Thanks Keith.
Opportunity, we believe there's a vast opportunity and from Brussels adopted him up so neatly continued to talk about at least 10 to 15 high conviction indications high conviction, meaning solid biology rationale clear cut feasibility for running clinical trials and registration trials based on known clinical endpoints and approvable endpoints.
And then of course, a substantial commercial opportunity so you're not going to come on yet on where we think kidney indications sits in the priority list and we will be disclosing fifth and sixth indications for other pathways of disease and you also remember that and design lab collaboration and <unk> is now going to join us and in.
Adding new.
New indications and and accelerated fashion. So you wouldn't see the strategy going forwards on.
While we have been prioritizing indications, but I agree with you and there is substantial opportunity and including in the kidney and again.
On the albumin and <unk>.
Drops and we have consistently and.
Hold your debt and we do not see any drops and see them all of them and we have also established debt.
And we have also on our Facebook and minutes script disclosed and experiments, where you can clearly see under the microscope and infects experiment.
And your malls is mainly a and siding into recycling and dissolving the recycling loop and it's able to leave the cells to exit the cells. So that each month is basically mimicking wild type <unk> food and cycling Patsy and is therefore, not fundamentally impacting the fates of SCR and or driving on.
And into the license and that explains we believe Y and serum albumin levels up impact upon dosing even high doses of Oh I've got did your moat that is fundamentally different and I believe from the high affinity and monoclonal antibodies.
And look where the cholesterol and data and.
Only correlate to the indication of T D or whether they are being aggravated by books and sheet and Melbourne as seen by some other competitors, but that remains to be seen the need to wait for those data and when you mine. The literature, you will see that serum albumin levels inversely correlated cholesterol levels, I mean, Albert and ease of variant.
And carrier from many things, including our call a subtle some debt.
There could be.
A combination of both forces both factors here, but let's wait for the data before we make further comments on that thank you.
Thank you so much.
The next question comes from Lenny Van <unk> of KBC Securities.
Please go ahead.
Hi, good afternoon.
Some questions on that.
On the pre approval access program, which and of course, great news for patients and an opportunity.
Well to invest and and market share by by sponsoring therapy before he officially starting on inspired and I was just wondering if there's a material cost as well related to the P. P. P. A a and given the fact that it will likely run from roughly nine months and the U S and and likely longer and in Europe. Thank you.
Keith could you take this question please.
Yeah in regard to the.
We're working with a corporate partner clinic Gen to be able to accept to run. This program. So our material cost are involved with the contract that we have with Clinton and them handling this as well as the cost of goods sold so yeah. It's nine months, but in the long run. This is a commitment to patients that we think and.
Is the right thing to do for them.
Yeah.
Alright, thanks for that.
The next question comes from E on and Ju of Wells Fargo. Please go ahead.
Hi, Thanks for taking my question and it's mainly related to the Panther program and in the Phase three IV study. The population is a moderate to severe.
Which is different from the mild to moderate population and phase two and I believe so.
So could you comment on what have contributed to the change in the patient population and phase III and also what about the IV goes I don't think you have disclosed and that will be used in the phase III study and whether that could be compatible with the future stuff.
Subcutaneous Ah strategy. Thank you.
Well, thank you again, and so you're right the phase III trial from Panther goods has done with the essence of coupons.
Patients and the patient panels were very excited about the ability to access a subacute products from feeding pemphigus you'd also right in observing that the patient population is broad and the phase III in from a broad label and.
It's a moderate and severe patient population, which is the bulk of the patients that definition has shifted a little bit. If you look at the PDI and cutoffs to define what is models, where there's multiple other cities actually and our phase two study, we had patients which you would qualify today and.
And it's actually should be and then.
And because patients so the patient populations overlap to a certain degree and based on the P. D and the efficacy data we have seen we feel confidence that I've got to teach them up a little and be able to make a difference in this broader patient population.
Got it thank you.
The next question comes from Alex Covid of Kempen. Please go ahead.
Hi, Thanks for taking the question I have a question about your indication if I look on the slide where you are they see opportunities and it looks like there are just a handful of indications that would fit number five.
The question is.
Will you keep with the strategy of going for orphan indications or does it mean and that it could also be a larger indication.
Yeah.
Your line.
And commenting on that question, you know orphan versus larger.
Yes.
Yeah, I would say at this time, we continue on our path, which was our strategic plan that you know we when we select indication. It's based on the biology rationale that is the first hurdle that we need to get through.
And we work on this with academic experts and we have indeed again for this fifth indication to determine it as our target.
And do like to work and orphan and rare disease and so we continue down that path and that is part of the plan.
It's sticking to this formula that has allowed us to hit four for four on our proof of concept and so we're going to stick with the with that plan.
And the event that there comes a time later that we need to expand outside of rare disease and orphan.
We will cross that bridge when we get there.
Got it I guess a follow up question is auto book out of the bigger indications you have listed on the slides, which ones do you see the most compelling biology for.
And some of them do have a relatively compelling biology, and and I would be also very carefully to concluding that it's gonna be orphan versus a big indications from some of these laws and indications, which we list on the slides you will probably find subtypes of sub segments of patients where the patent.
<unk> really driving the disease and for example, and in that and that's.
Clearly be the case, so even when if and when you would address larger indications potentially W target patient population.
And would still qualify as often and so that's type.
The bridge from the day, there's plenty of work on the table.
And in the space, which Keith just described.
Okay alright. Thanks.
Thank you.
The next question comes from Douglas also of H C. Wainwright. Please go ahead.
Hi, Good morning, Thanks for taking my question and so I'm just curious in terms of.
D.
Early on sort of experience from the trials and obviously from an early access program and they've got a little challenging but just in terms of educating physicians about yes. They are on mechanism and.
And F Guard kitted floor as a therapy you know are there any particular challenges there as you know in terms of the actual therapy in terms of established and dosing and monitoring patients or is it really just about understanding how the mechanism works and the treatment.
And Keith would you mind, taking this question please.
Yeah happy to Tim actually when you look at the mechanism of action for F Garg, Gigamon and explain what it's actually doing.
And that it's fairly simplistic to understand and how that affects of the auto antibody at the neuromuscular junction and the fact that we're removing it which is why you're seeing the clinical efficacy. So that part I don't view as as big of a hurdle when I talk about the education of health care professionals, it's because of.
The fact that we cannot speak about the mechanism of action, except one where and market research for and some type of a Congress.
We can't go out and speak about it at this time because that would be perceived as pre promotion. So that's why I talk about our overall success and M. G. I feel very good about it's the gradual uptake because that's when we can begin the education I can tell you that when we've done this and advisory boards, we can start at the at the beginning of the day.
And there is a and interest to learn about it and by the end of the day, there's and enthusiasm.
And what this could this therapy could mean to Mg patients.
It's really great great testing makes physicians with the right message.
And then I guess just more broadly I'm just curious in terms of.
And obviously you between one seven and and obviously they have got to do March you have a really strong franchise and neuromuscular and I'm. Just curious are there other mechanisms that you're looking into on either for internal development or development programs or you know potentially through through our business development to bring into the company. Thank you.
Yeah.
Yeah, we already disclosed on our journey from 19 is a neuromuscular and assets it fits clearly into the neuromuscular franchise, which we should be building.
And yes. We are of course also looking to the outside world for complementary mechanism of action, you know molecules that which could actually fit very nicely, although I must say debt pretty busy and and <unk>.
Developing out on innovation from the people of M D.
<unk> program.
And just to be a value, which hunting ground for opportunity.
And so.
But that being said I'd be looking holistically at building out a viable long term and neuromuscular franchise. Thank you.
Okay, great. Thank you.
Yes.
The last question will come from Rosie Turner of Barclays. Please go ahead.
Hi, Thanks, very much taking my call.
Yeah, just one left for me and.
And the presentation and he and the release.
Morning, 19 net.
So I know I'm going to say the second thing and accelerated approval in China and I just wanted and thought he could mean in terms of timing what kind of go up and pay the foundation for lunch I think China I think we've got.
And pricing and terms and royalties over that and thankfully.
I would like to come on to the question later in the year, because frankly speaking there are two possible scenarios slide there would be and classical scenario, but on the back of a BLA approval.
And you would basically have to do a small PK study in order then to file for approval in China that is a potential faster path, what actually you would skip the PK study and actually you could go straight into a registration and.
One of the many many reasons why we did file and with xylem and just because of the cool and sexy and navigating the and regulatory landscape in China.
But I'll leave it up to sign up to <unk> to comment on that and I.
We need to navigate it step by step and we will keep you informed.
Yes.
Thank you and thank them.
Thank you.
This concludes our question and answer session and the <unk> full year and fourth quarter, 2020 financial results Conference call.
Thank you for attending today's presentation you may now disconnect.
Goodbye.
Yeah.
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Yeah.
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