Q1 2021 Horizon Therapeutics PLC Earnings Call
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Today's conference is scheduled to begin shortly please continue to standby and thank you for your patience.
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Good morning, and thank you for standing by and welcome to the Horizon Therapeutics plc first quarter 2021 earnings conference call. As a reminder, today's conference call is being recorded I would now like to introduce MS. Tina Ventura Senior Vice President of Investor Relations.
Thank you Justin good morning, everyone and thank you for joining us.
On the call with me today are Tim Walbert, Chairman, President and Chief Executive Officer, Paul Hoelscher, Executive Vice President and Chief Financial Officer, Liz Thompson Executive Vice President Research and development and Andy Pasternak, Executive Vice President and Chief Strategy Officer, Tim.
Tim will provide a review of the business, including our first quarter performance line.
He will then provide a review of our R&D programs, followed by Paul who will discuss our financial performance and guidance and more detail. After closing remarks from Tim we'll take your questions.
As a reminder, during today's call, we'll be making certain forward looking statements, including statements about financial projections development activities of our business strategy and the expected timing and impact of future events.
Our actual results could differ materially due to a number of factors, including the risk factors and other information outlined and our latest forms 10-K.
10-Q, and any eight Ks filed with the Securities and Exchange Commission and our earnings press release, which we issued this morning.
You are cautioned not to place undue reliance on these forward looking statements and horizon disclaims any obligation to update such statements.
In addition on today's conference call non-GAAP financial measures will be used these non-GAAP financial measures are reconciled with the comparable GAAP financial measures and our earnings press release and other filings from today that are available on our investor website at Www Dot Horizon Therapeutics Dot Com I will now turn the call over to Tim.
Thank you Tina and good morning, everyone. The.
The first quarter's one with multiple achievements for horizon first we completed the acquisition of deal of bio advancing our position as the high growth biotech, but you're adding of deep mid stage biologics pipeline, expanding our R&D capabilities, particularly and early stage research and diversifying our portfolio of with the on market rents.
These biologic of plasma.
Now have a total of 22 development programs and our pipeline, including eight trials scheduled to start this year.
We initiated the relaunch of deposit in mid April after assuming FDA approval in March for the increased scale manufacturing process for its of peso.
This followed the temporary supply disruption that began last December which was the result of the U S government mandate of COVID-19 vaccine orders.
We're advancing our global expansion strategy with today's announcement of our plan to build out our European infrastructure to launch a pleasant and Europe if approved.
Anticipating approval on the first quarter of 2020 true.
Our geographic expansion strategy includes introducing depends on Japan, as well as other markets, establishing a platform for the future launch of additional medicines outside the U S and we made significant progress here as well.
We generated strong growth from our orphan disease medicines, KRYSTEXXA and <unk> pursues be enacted.
We also received multiple best workplace awards since the start of this year, including number one ranking on Fortune's Best places.
And Biopharma 2021, and the number three ranking the highest ranked Biopharma company on the prestigious Fortune's Top 100 places to work list attributes of the strong engagement of our employees and important factor and hiring and retaining talent and the highly competitive biotech sector.
Starting with the all of which brought us for Kennedy to nine development programs and considerably expanded our pipeline across all phases of clinical development and the strategically aligned with our therapeutic areas of focus.
We all of US R&D team enhances our ability to innovate with its broad experience and biologics.
The early stage research and translational capabilities and the deep scientific knowledge of autoimmune and severe inflammatory diseases.
Finally, the acquisition Diversifies, our on market medicine portfolio with the addition of of placement and infused biologic medicine indicated for the rare disease, neuromodulators uptick of spectrum disorder or and M. O S T.
We've been impressed by the talent and expertise of the all the team brings to horizon.
Since completing the acquisition in mid March our teams have been working together to successfully integrate the two companies and this morning, we finalized and rolled out our fully integrated organization.
We're advancing and refining our strategy for the development portfolio to maximize the potential.
Our near term commercial priorities the successfully relaunch of plays and the for animal what's the and the U S and prepare for the potential launch in Europe.
And places on was approved by the FDA and June of last year as the first and only be sold the pleader for the treatment of adult patients with the and they're more steep.
This is the severe rare relapsing neuro inflammatory autoimmune disease of the taxi optic nerve spinal cord and the brain zone.
Manifestations of the disease include loss of vision paralysis, and also respiratory failure.
B cells play a critical role of the pathogenesis of minimalist T and b cell depletion and some mechanistic approach preferred by physicians.
Because of the placement was launched during the pandemic and with relatively minimal resources. We're planning of full relaunch of the medicine, including the expanding the size of the commercial organization.
We're applying learnings from the successful strategies, we used the launch depends on and relaunched KRYSTEXXA.
The key component of that strategy is the best and the marketing and field base teams to ensure optimal support for plasma.
We're well on our way and a re launch preparations and expect the results of our efforts to accelerate as we move throughout the second half of this year.
Our next steps for <unk> and include adding sales representatives to maximize the opportunity and animosity.
Adding and applying our comprehensive patient services side of care and payer support teams to optimize patient pull through which as we know from topaz on KRYSTEXXA is critical to the success of rare disease infused medicines.
We're also leveraging our extensive as the site of care network to support physicians, referring their patients to infusion centers, which is of particular channels for placement and its early launch.
We're also investing and medical and scientific engagement to establish scientific leadership and animal Estee. This includes conducting further analysis of a place on the clinical programs to expand the understanding of its differentiation as well as continuing to build a base of compelling real world evidence supporting the use of the placement.
Important new data were recently presented of two key medical meetings, which will Liz will discuss in more detail.
This type of clinical analysis is core to our medical affairs and clinical strategy of horizon to engage educate and collaborate with the treating community.
And example of how we have successfully executed this strategy.
Keys to our commercial strategy or ensuring that physicians are aware of the benefits of the placement and how it is differentiated from other on the market medicines for.
For example, we see multiple opportunities to differentiate the completion of from Rituxan map on and off label treatment that has been used to treat and are most of the given the lack of and approved medicine for this devastating disease.
One important distinction is that implicitly it's the humanized monoclonal antibody targeting CD 19 receptor.
Rituximab is the chimeric molecules targeting the see the 20th receptor, which does not the police plasma cells or plasma glass.
And the animals, the auto antibodies are secreted by Plasmablast and plasma cells and implicit the police these pathogenic cells.
Additionally, please note the true a relatively low rate of anti drug antibodies and infusion reactions with recent day to also confirming its long term efficacy.
Other benefits of prescribing of plasma are resonating with physicians, including its convenience favorable safety profile and well understood and mechanism of action.
Moving to two per person.
The pets, it's the only approved medicine for the treatment of thyroid eye disease, which is the serious progressive and vision threatening rare autoimmune disease.
As you're aware of where we're and a temporary supply disruption of suppose the throughout the first quarter with no supply and since the end of December. This was due to the U S government mandated COVID-19 vaccine orders and our third party drug product manufacturer catalysts.
This is very challenging for the patients and treating physicians and certainly for our business.
We understand how critical it was to accelerate COVID-19 vaccine production to save lives and hopefully and this pandemic force.
And we had already begin a process early last year to increase the skill with which we could fill and finish vials of catalysts. This increased scale allowed us the manufacturer of many more miles with the each manufacturing run.
This new manufacturing change required FDA approval, we submitted submitted a prior approval supplement and January to the F. D. A.
We're pleased to announce that the FDA approval of that supplement and March and we also announced resupply of the peso and mid April.
And this has certainly been a very difficult situation with the T V patients who have to stop the person and the middle of their treatment and continue to live with the debilitating effects of the TEP we.
We appreciate the incredible commitment from the FTA HHS, the White house and Cadillac to work with us to expedite FDA approval and resupply to peso for patients as quickly as possible.
In addition to obtaining approval from the new increased scale production of kind of line. We continue to make progress on our strategy to expand supply of capacity, which includes adding a second drug product manufacturer by the end of this year.
It depends on it's been available for about two weeks now and we're extremely pleased with the progress we've seen.
Patients are eager to resume or start therapy, and physicians of re engaging with their patients to help them get on treatment.
The feedback has been overwhelmingly positive so far.
As we've seen since her and launch T V patients and build strong communities on various social channels and many of the posted about deeply thankful they are to resume resumed treatment again.
The peso is making a huge difference and their lives.
We now have two types of patients who are starting on the peso.
Disrupted patients who are on therapy, but had to stop treatment due to the supply shortage and new patients who are starting to pay the live for the first time.
With disrupted patients, we're making great progress early and the re launch to date about half of disrupted patients of already scheduled their infusions.
Based on physician and patient research, we conducted during the supply shortage, we expect the vast majority of the disrupted patients resume therapy.
Well, we're only two weeks and we're seeing evidence of this is happening as we expected.
The remaining disrupted patients continue to move through the process to get their treatment schedule.
Re verification and scheduling process can take up to a few months, depending on the patient and their position and their insurance provider.
And for this and our patient services team continues to do an incredible job communicating with each depends of patients throughout their journey.
We're very encouraged with the projects, we've seen and the first few weeks.
Regarding new patients and as I mentioned on our last earning calls at the end of February. Despite the supply disruption. We continued to promote to pass on and saw continued strong growth of patient enrollment forms or perhaps.
We completed the experience of the parts of the commercial and field based organization and the fourth quarter last year, where they could of the addition of sales representatives patient access liaisons regional reimbursement liaisons site of care managers and medical liaisons and.
This expanded team continued to drive demand for new patients during the disruption.
Communicating frequently with their customers.
Since our resupply announcement at the end of March we've seen an acceleration of and that Pepco and impressive number of new prescribers are prescribing to present, each week and fat.
Since our last update at the end of February the total number of pets has increased significantly and we hit an all time high for total monthly Peps and April.
<unk> already seen a good number of new patients, whose pest were generated on the fourth and first quarter of this year.
The scheduled their first infusion.
While the accumulation of disrupted patients resuming treatments, along with the new pets generator and the fourth and first quarters, we have a unique dynamic occurring as we relaunched the peso.
This will result in an unusual quarterly net sales progression with the third quarter expected to be the pets is highest and net sales quarter of this year as we work through treating disrupted patients and adding the new accumulated patients.
As we've said, we're significantly increasing our investment and two pairs of this year.
<unk> and the first quarter to drive awareness of <unk> and to present.
Not only TD patients, but also those of grapes disease to raise awareness of the connection between graves and T D and to increase the speed to diagnosis and treatment.
Our unbranded direct to consumer TV campaign last year was highly successful as evidenced by the fact of patients continue to search for the specialists on.
On the T D and compares the website during the temporary supply disruption.
On Monday, and addition to resuming our unbranded TV campaign. We also launched our first branded tell them to peso of TV campaign, which we expect to drive even broader reach and awareness for T E D and the peso.
Motivating patients to seek treatment for quickly.
We expect the new T T C campaigns, which are national campaigns and will run through the rest of the year to drive increase uptake of to present as we progress towards our 2021 to present net sales guidance of more than one point to seven $5 billion.
We're highly confident and the growth prospects for to present and continue to expect peak annual global net sales of more than $3 $5 billion.
On the clinical development from we expect to begin enrollment in our trial and chronic <unk> patients from mid year.
In the meantime, we continue to see positive data published by physicians, who have used the peso and treating their chronic <unk> patients as well as the presentation of case studies at medical meetings.
We continue to expect more data to emerge throughout this year.
With KRYSTEXXA, we reported first quarter net sales of $107 million and increase of 14% versus the prior year. Despite the ongoing challenges associated with COVID-19.
We're encouraged by recent increase we've seen and patient visits rheumatologists as.
And as well as the highest number of in person calls by our sales team since the onset of the pandemic.
Key to the long term success of KRYSTEXXA is our immuno modulation strategy. We continue to see increase of use of KRYSTEXXA with immune modulators as physicians become increasingly aware of the significantly higher response rate for KRYSTEXXA plus of immuno modulation compared to KRYSTEXXA alone.
Between 35, and and 40% of new patients are now using KRYSTEXXA plus I mean the modulation.
We attribute this to higher levels of political conviction for KRYSTEXXA, among physicians, who co prescribed for immune modulators.
Our strategy for KRYSTEXXA is working and it supports our expectation for strong growth again this year with full year of 2021, net sales guidance of more than $500 million and.
It also supports our peak U S and the sales estimate for more than $1 billion.
Our rare disease medicines for victory persists, we enacted me and all generated strong growth from the first quarter driven by durable active shipping patient growth and continued high rates of compliance and adherence and will now turn the call over to Liz.
Thank you, Tim and good morning, everyone.
The first quarter was a landmark quarter for the R&D organization as we completed the acquisition of the yellow and began integrating the two organizations.
I've been impressed with the talent across the the other team and their deep commitment to science and patients. Our pipeline now has significant breadth and depth as Tim mentioned, we have 22 programs spanning the development life cycle from preclinical all the post marketing trials with seven and phase two two and phase III and sex and faithful or.
Given the increase in scope on this call and future calls I'll focus on key programs and those with important new information.
I'll start with the place now our anti CD 19, humanized monoclonal antibody that deplete b cells and it was approved by the FDA last year and is the first and only b cell depleter for the treatment of adult patients with anti aquaporin four antibody positive and M. O S. T S.
As Tim referenced B cell depletion is the mechanistic approach that neurologists are very familiar with and treating the disease.
One of our priorities for a place now is to continue to build a robust body of evidence supporting its important role in the N. M. O. S. T. We were very pleased to have data from for scientific abstracts presented in February at the Americas Committee for treatment and research of the multiple sclerosis 2021 for them.
One of analysis highlighted the safety and efficacy of a pleasant and and M. OSB patient with previous Rituxan and <unk> exposure with the data, suggesting that the place and then they benefit patients previously treated with rituxan and including those who had experienced relapses of.
The seven patients who qualified as rituximab failures non had and attack after treatment with a pleasant and during the study period.
We also presented data at the American Academy of Neurology annual meeting in April, including New and its study data from the open label extension period of the pivotal pivotal phase III trial, and and M. L. S D patients.
I personally was generally well tolerated for at least for years and long term of placement treatment provided of sustained reduction and Anna and MLR for the attack risk from baseline.
Finally, and new analysis of a pleasant of Phase III data was published in the May issue of neurology, and neuro immunology, and neuro inflammation, indicating that a pleasant and reduces the risk of worsening disability and patients with N M O S T.
And this is a progressive disease, and which each attack causes further damage and disability. These data could be meaningful to the physician community.
We're also evaluating a pleasant and two phase III programs, including myasthenia gravis, or Mg and ITG for related disease and.
And as a chronic rare autoimmune neuromuscular disorder that affects the voluntary muscles of the body, especially the control of the eyes mouth throat and limbs.
G for related disease refers to a group of disorders marked by tumor like swelling and fibrosis as affected organs, such as the pancreas salivary glands and kidneys enrollment and these trials is ongoing.
Moving on to HCN and 85, our oral selective <unk> antagonist that has shown early signs of clinical impact and fibrotic disease. The few.
<unk> cutaneous systemic sclerosis is a rare chronic progressive autoimmune disease that often causes internal organ damage and has the high mortality rate.
Given the FDA approved treatments for patients today this disease presents a significant unmet medical need.
We remain on track to enroll the first patient and our pivotal phase <unk> diffuse cutaneous systemic sclerosis trial and the second quarter of 2021.
Our second pivotal phase two b H C and to find trial in idiopathic pulmonary fibrosis or IPF. The most common interstitial lung disease.
The essence of rare progressive lung disease with the median survival of less than five years.
The current treatments may slow disease progression, they do not stabilize the disease.
The significant unmet need for a comprehensive treatment that addresses the inflammation and fibrosis that drive I P. S T.
Treatment of target enrollment for the trial is approximately 360 patients and the primary endpoint will be the change and forced vital capacity or SEC after 52 weeks.
C and objective endpoint that measures the lung capacity.
Is he used to assess the progression of lung disease and the effectiveness of treatment.
Enrollment, which we expect to begin in mid 2021 is expected to take approximately two years and with the one year and point, we expect data in 2024.
Moving to HCN and 49 and 20. This is the CD 40 ligand antagonist the blocks T cell interaction with CD 40, expressing b cells, thereby disrupting the over activation of the CD 40 ligand co stimulatory pathway.
HCN and 49 and 20 is currently in phase III development for indications that address immuno over activation, including Shogun syndrome of chronic systemic autoimmune condition that impacts ex green glands, including the salivary interior glass as.
And as well as ongoing studies in rheumatoid arthritis, and kidney transplant rejection.
HCN and 773 for is the human monoclonal antibody that binds to a cell surface receptor on plasma side to adjourn to dendritic cells for P. D. CS called the Iot seven, thereby causing PDC depletion.
PDC depletion may interrupt the cycle of inflammation that causes tissue damage and diseases, such as lupus and other autoimmune conditions.
For HCN and seven and 730 for we're on track to enroll our first patient in our systemic lupus erythematosus or SLE phase II trial midyear.
We expect to enroll approximately 195 participants.
The primary endpoint of the trial will be to evaluate the effect of the HCN and seven and seven three for compared with placebo and reducing SLE disease activity using big low.
It was a commonly used index that measures the lupus outcomes.
We expect data to be available in 2023, the phase one trial of the successfully conducted and cutaneous lupus erythematosus or cle with the results presented as of late breaking abstract at the American College of Rheumatology Medical meeting at the end of last year.
And this trial patients treated with HCN and seven and 734, so a clinically significant reduction and claws, a clinical measure of cutaneous lupus lesions, which is also of secondary endpoint and our phase II trial.
Moving to pay the and we expect our placebo controlled trial and chronic T. E. D patients to begin mid year given that the tip of the indication covers the broad T. E. D patient population. The objective of the trial is to generate clinical data to better inform payers and physicians about the use of to pass the and chronic T E D patients.
Target enrollment is approximately 40 patients who've had chronic T D for five years or less randomized and the two to one ratio.
The primary endpoint of the change and Proptosis and the study eye from baseline at week 24, we expect top line data to be available in mid 2022.
And our two paths of subcutaneous administration program, we recently completed dosing in our phase one pharmacokinetic trial, which includes an initial evaluation of the halos on enhanced drug delivery technology for subcutaneous formulation of the past that.
Follow up for these patients is ongoing once we've collected follow up information and analyze the data we worked with the FDA to define the data package, including additional clinical work required for approval.
We also continued to advance our clinical program for deposits and Japan, having completed initial positive discussions with Japan's pharmaceuticals and medical devices agency.
For KRYSTEXXA, we continue to advance our five R&D programs, which aim to maximize the value of the medicine and three ways of increasing the complete response rate.
Benefiting more patients with uncontrolled gout and improving the patient experience.
Each trial is progressing well, we continue to expect to read out from our mirror placebo controlled trial and the fourth quarter of 2021.
Beyond mere we and others continue to contribute to the published literature regarding use of KRYSTEXXA with immuno modulation and data were recently published and our three dozen of rheumatology from recipe and the first randomized controlled clinical trial, using KRYSTEXXA with and immuno modulator in this case microsatellite Moffitt Hill finally.
And March we enrolled the first patient and our trial evaluating of monthly dosing regimen of KRYSTEXXA and.
Look forward to updating you on our continued progress and I'll turn the call over to Paul.
Thanks Les.
Comments. This morning will primarily focus on our non-GAAP results unless otherwise noted.
We are very pleased with our overall performance and the quarter given the significant impact of the temporary to puzzle of supply disruption.
First quarter net sales were $342 million.
Our orphan segment generated net sales of $258 million of year over year increase of 5% driven by strong performance of KRYSTEXXA predict the prices be enacted me on.
Net sales for the inflammation segment were $85 million and segment operating income was $43 million.
We continue to reinvest the cash flow generated from this segment into our growth drivers and our expanding pipeline.
Our non-GAAP first quarter gross profit ratio was <unk> 91 per cent of net sales.
Non-GAAP operating expenses for $268 million.
This included non-GAAP R&D expense of $49 million and non-GAAP SG&A expense of $219 million both in line with our expectations.
First quarter, adjusted EBITDA was $46 million.
Non-GAAP income tax expense for the first quarter was $26 million.
We were impacted by an unusually high and non-GAAP tax rate and the quarter.
As we've seen in prior years, there can be variability and our tax rate across quarters.
We expect the second third and fourth quarter tax rates to offset the first quarter to bring the full year tax rate in line with our expectations of low double digits.
Non-GAAP net income and the quarter was $7 million and non-GAAP diluted earnings per share for three of <unk>.
The weighted average shares outstanding used to calculate first quarter 2021, non-GAAP diluted EPS for 234 million shares.
First quarter non-GAAP operating cash flow was $63 million.
As of March 31.
Cash and cash equivalents were $812 million, giving us significant flexibility to invest and our growing operations, including additional pipeline indications following the acquisition of the yellow as well as the allowing us to further expand our pipeline and execute other strategic transactions.
The total principal amount of our debt is $2 6 billion.
With the earliest maturity in 2026.
Our gross debt to last 12 months adjusted EBITDA leverage ratio is two eight times as of March 31.
Turning now to our full year 2021 guidance, we're updating our full year 2000, and 'twenty one guidance to incorporate the impact of the acquired via all of the business.
We expect full year net sales and the range of $2 75 to $2 85 billion and adjusted EBITDA and the range of 1.0 to 1.06 billion.
For it the puzzle and we continue to expect full year 2021, net sales of greater than one and $2 75 billion representing year over year growth of more than 50%.
As Tim mentioned, given the unique dynamic of both disrupted patients resuming treatment at the same time, new patients starting therapy, we expect that unusual quarterly net sales progression with the third quarter expected to be the highest net sales quarter of the year.
For KRYSTEXXA, we continue to expect net sales of more than $500 million for the year.
Presenting strong year over year growth of more than 20 per cent.
We continue to expect our non-GAAP gross profit ratio for the full year to be between the 86 and 87%.
Our updated expectations for adjusted EBITDA reflect the significant increase in R&D expense.
Incorporating the legacy of yellow programs, our investments with HCN and a two five and our at the peso and KRYSTEXXA clinical programs. We expect 2021 R&D expense to be more than triple the amount of our 2020 R&D spend.
Following the issuance of additional debt to fund the VL of acquisition. We now expect non-GAAP net interest expense for the full year to be approximately $75 million.
We continue to expect full year non-GAAP tax rate to be and the low double digits.
We estimate that our cash tax rate will be on the high single digits in 2020 one.
And as always our tax rate could change significantly as a result of any acquisitions or divestitures, and we may make or any changes in tax laws.
We now expect our full year, 2020, one and weighted average diluted share count to be approximately 235 million shares.
Of that I'll turn it over to Tim for his concluding remarks.
Thank you Paul.
We're very pleased with the performance.
That we had and the first quarter given the continued challenges from COVID-19, and the impact from the short term to cause the supply situation.
The generated strong results from KRYSTEXXA and or other rare disease medicines.
We completed the acquisition of <unk>, which accelerates our strategy to build and expand our pipeline for long term sustainable growth.
We now have 22 programs and development eight of which are beginning this year.
We advanced our global expansion strategy with preparations for the potential launch of of placement and Europe for animal S. T.
And progress with our clinical program for <unk> to present and Japan continued.
We're very pleased as the result of the collaboration.
With the FDA HHS, the white house and cattle and the we're able to relaunch the present and April making it possible for many patients with TD to once again and get access to the medicine.
Only one approved for treatment of this debilitating disease.
We're also very pleased with the progress and the relaunch just two weeks and with both disruptive and new patients driving early uptake.
We remain focused on driving continued progress and believe we are well positioned to deliver increasing value for shareholders. This year and in the years ahead.
And I'll open the call up for questions.
And thank you as a reminder, the asked the question you'll need the press star one on your telephone to withdraw your question press the pound key.
Please standby, while we compile the Q&A roster and once again, if you'd like to ask the question that the star one and.
Our first question comes from David and.
Your line from Piper Sandler Your line is now open.
Thanks, and just the comp.
Good morning, just a couple of quick ones. So so.
So in terms of the cadence for the past you talked about <unk>, and so I'm not mistaken and being the high watermark.
For the year, so I'm just sort of wondering.
With the growth and patient enrollment forms and with just overall demand growing why wouldn't <unk> be the the high watermark is it just the sort of clearing of the backlog. If you will that results and <unk> being the high watermark for the year just help us understand you know.
The thought process more deeply and then secondly on the closing I'm interested in how youre thinking about the pace of switching away from conventional immunosuppressants like azathioprine, and how youre thinking about the extent of switching away from Rituximab.
Over time thanks.
Sure.
Spud on David with your commentary around so pleasant getting so we had ah patients of accumulating peps and the fourth quarter that Didnt get treated and also the first quarter and then you add that to the significant number of disrupted patient and so you essentially have.
Two quarters of perhaps as well as a significant number of disruptive patients all sequencing on.
And where they would be treated for the most part and the second and third quarters with only a half a month of April so when you looked at initial dosing being less.
The less vials.
And that all up and that drives a significant bolus that will clear through and the third quarter. So that is what's driving the commentary that we did around to pass on and certainly as we continue to drive new paths will be well positioned to drive ongoing growth from from that point on.
Relative to a place and though we think theres a lot of good opportunities for.
For.
The in the U S, especially vs Rituximab, which is not approved but which is used.
Used extensively in this disease about half of our patients are currently since launch of Ben Rituximab switches and Theres a number of key factors first of all for US we're getting our commercial organization right sized there wasn't a significant patient services of site of care organization to and.
Sure that.
We have not only the right level of access, but the right pull through and the right place to get these patients treated so adding.
Adding those services, which weren't existent and the launch of placement will certainly make a big difference and help us as we drive uptake when we talk about the advantages of <unk>.
And the vs. Rituximab, we think Theres significant first of all the places fully human vs. Rituximab, which is comerica, which we have seen less infusion reactions less anti drug antibodies. These can all impact tolerability and and long term efficacy. We've had recent data presented which can.
Firms that long term efficacy.
And.
With the humanized antibodies or the lower risk for inducing immune responses in humans and so we certainly see that as an advantage and also with CD 19 is our target we see plus the hitting a broader array of b cells versus rituximab, which potentially could lead to more effectiveness of.
So you.
You add to the fact that Rituximab and not promoted it's off label and Theres not patient support so of co pay support for our commercial patients and just overall, helping patients understand the disease, the best treatment and where to get treated and so we think theres a lot of opportunities for us as we scale the commercial organization.
But really establish the right level of messaging on switching from Rituximab and and ultimately long term, becoming a first line treatment.
Thanks, Dave and Justin next question. Please.
Thank you and our next question comes from Chris Schott from J P. Morgan.
Your line is now open.
Great I appreciate the questions here just a couple from me on to personnel and just a follow up on the plans on the quarterly gating and can you just give us a little bit more color of how you were thinking of the balance and we think about sales between two Q3 Q for Q I'm, just trying get my hands around how <unk> weighted these results will be.
And then the second is on the on the new kind of patient starts side of things like you mentioned you had all time high in terms of the patient room and forms and April can you just quantify where we stand now in terms of how many of these forms you've seen per month versus the run rate. We were seeing last year sort of get a sense of just like how much of an uptick you've seen overall and then the final question was just on the <unk>.
With the relaunch just any latest thinking about how youre thinking about peak sales for the product and and then and.
And OSD sorry.
And as we just think about you know you of the resources, you're putting behind the product and sales force et cetera. Thanks.
Sure. Thanks, Chris.
Our thoughts around the place and there are as of molecule, we see it as the billion dollar opportunity, we haven't broken that down by indication, but we continue to feel.
And even more confident the more we dig into the opportunity and and the most D and to drive significant uptake and and achieve that objective relative.
Relative to total number of perhaps we're not getting into specific numbers on a monthly basis other than you know.
And so we're working through last year and the impact of COVID-19 one of the things that we had talked about is that we had never achieved the.
The level of paths that we saw in the first few months of launch and so to be able to have a record high level of of perhaps in April.
And it really talks about significant demand and new patients.
And also about the fact that we see some opening from the COVID-19 prospective so definitely gives us confidence that we're and a great place to continue to drive uptake.
And achieve our objectives.
Thanks, Chris.
Justin next question please.
Our next question comes from mainly built the mine from.
From Stifel. Your line is now open.
Hi, Thanks for taking my question you have so many programs now you don't even know where to start and.
And I'll ask one on top of that and.
And one on it.
In terms of the patient youre, saying that 50% or patients who had stopped and restarted and the others are new patients of those mutations.
Are you starting to see more chronic use.
For our tests for chronic use given that youre not limited and the label and there's been increasing data on the success and that's it.
And chronic you know on.
And I guess I'm I'm I'm curious about the the.
The myasthenia gravis.
The development program.
How do you think about the sorts of Houston and light of I guess with you and call. It the development program with FBR and and complement inhibitors and where does on beef.
Thanks.
Sure I'll take the first and let <unk> take the second so relative to the chronic population before the temporary supply issue. We saw high single digit as a percentage of overall treated patients and.
And obviously for two weeks and so as far as treated patients we don't have that.
And that breakout.
As far as the <unk> generated and the fourth and first quarter, we didn't see any anything I mean, we don't have perfect data to understand this but we didn't see anything that significantly changes our thought process there, but we have to see as we get weeks and months and.
How that changes over time, there's been a lot of publications and the fourth quarter and we'll see more over this year. So as more data gets out of that'll certainly help raise awareness and also improve and the speed to reimbursement. So I think it's too early to really comment on how that's tracking and the relaunch phase.
Yes.
Liz.
So turning to the question on myasthenia gravis, and I'll close now and specifically.
Specifically in the context of the SCR and so would it be sales of Peter is going to be doing and this disease state is somewhat different from how and SCR and is going to approach. It in one case you are taking out the cells that are producing the auto antibodies and the other year sort of systematically haven't declared the math. It has some set this has some implications that are already showing up there.
And much more frequent dosing and that's gonna be required with and SCR and for example, there also is the suggestion that may be and the mosque population. Yes, you are and aren't as helpful. As historically b cell depletion has been seem to be and we're going to be looking at that very robustly and our myasthenia gravis program. So overall, we see some real potential.
For differentiation clearly of course of what's going to matter is how our trial actually reads out at the end of the day.
Thanks, Annabel Justin next question please.
Thank you and our next question comes from Jason <unk> from Bank of America.
Your line is now open.
Hey, guys. Thanks for taking my question.
The broader question and kind of looking beyond this year and some of the noise with the and you start for the disrupted patients and just trying to think about.
Where this market as the <unk>.
Ultimately goes and and the impact of a lot of your marketing efforts. So it seems like with like the early adopters. These physicians and we survey the sort of.
And where they are prescribing vs. Their peak level, they arent that different but they are indicating that referrals are going up and you guys have indicated that like 60 per cent of the market was the only prescribing and one or two scripts. So I'm just trying to think about the the efforts of the DTC campaign that was talked about.
And what drives the next leg of growth to get more out of the prescriber base. Overall is it really hitting that other 60 per cent of prescribers activating them is it driving more referrals to that kind of early adopter cohort just trying to understand and sort of what drives sort of the next leg of growth and the pet and the story. Thanks.
Thanks, Jason well all of it.
One one doesn't work with them and the other you can't have a strong DTC campaign without the right pull through so I think all of it and in concert and the increased level with our expanded commercial organization with the significant increase in DTC and should work in concert to drive continued uptake so.
We're seeing it is the result of our DTC with December being the first national month last year, we saw a significant increase and the people requesting to find a <unk> specialist so a great sign there with the ramp up of our national campaigns, and we then stopped and the first quarter. So.
That kicked up on on Monday, again, and also the pace of branded DTC. So all of these efforts are are going to be critical to driving both short and long term success of 40% of group of patients ultimately get thyroid eye disease, so being able to access.
And the rate one of their understanding that thyroid eye disease as a consequence of.
Graves of potential consequence, and knowing that there's options to treat it will accelerate them through to ultimately getting treated for thyroid eye disease and potentially getting to purchase. So I think all of these from getting graves patients accelerated getting active pace.
Patients with thyroid eye disease treated and ultimately leveraging our increased commercial effort are all going to be critical and driving our short and long term success. Thanks, Jason just the next question. Please.
Thank you and our next question comes from David Risinger from Morgan Stanley. Your line is now open.
This is the latest santoro on for Dave Risinger, we have a few questions about the hesitant at this trial and so.
First how confident are you and the principals.
With such a small and of Watson for any.
And.
And second could you. Please frame the treatment population I know, it's and and active with.
Clinical activity score below one, but does it moderate to severe patient technically because the propco.
And that's greater than three and third what number and percentage of inactive patients and the rail world does the enrollment criteria of represent and.
On any given year.
Sure. So I'll take the last is as we've said for patients two of eight years or less but they're really between three and eight years because of the first two years and active disease on average that's about 70000 patients and this trial represents the population lives can.
I'll speak to the so.
The first part of she'd like yeah, absolutely. So as you can imagine we thought very carefully about how to design. The study to give appropriate insight into the effect of two pads are in this patient population. It is the patient population and that's more consistent with moderate to severe on the basis of looking to have significant levels of proptosis and part of that is just <unk>.
Our primary endpoint here is proptosis and we do want to make sure of these patients have enough of that particular symptom that we'll be able to see of benefit when you look at the overall sample size. We did think about this carefully as well and looked at what would be necessary based on some conservative assumptions of the variability of response and this patient population.
As well as making sure that we would be adequately powered to see of two millimeter change. So overall, we feel confident and the design of our study.
Thank you Justin next question please.
Thank you and our next question comes from Ken Cacciatore from Cowen and company. Your line is now open.
Oh, thanks, so much Tim just wanted to bring you back to some of the the metrics around the pizza.
Just doing some of the back of the envelope and I know none of this is perfect day. It seems as if you would have at least 4000 patients may be more and enrollment and going through the process. So if we do maths on full treatment for some for these patients it would seem as if you're already at the guidance level and I know you were talking about.
Around the rough number on guidance, but can you can you help us understand maybe with accumulation of patients starting and continuing to go through the year is it just more of the logistical issue you want to see how we get this many patients through the system kind of cleanly before you, maybe readdress guidance or any more kind of commentary you can give us around that thank you sure.
So im not really sure where the 4000 came from and that's not consistent with our numbers but.
We're two weeks in here and we've certainly seen a great response, so far from from physicians and patients half of them of Verde.
Either gotten are scheduled during the fusion, so tracking where we expect the things and as far as guidance for the year.
We're not going to change based on two weeks of data.
We will continue to execute and and we will know a lot more as we complete the second quarter and their report that out in early August.
Okay and also just go ahead and.
I'm, just kind of follow up and and ask on any progress with maybe the European regulatory authorities of should we just kind of focus on other regions as you've been pointing to sort.
Yes, so our focus right now is on Asia, Japan, and Latin America, and other markets Middle East, where we see opportunity for it to pass on.
And as we've said, we see that is greater than $500 million opportunity.
We're in constant dialogue with.
The PMA and Japan, and making progress there. So we continue to expect the.
A significant opportunity outside the U S. Within Europe, we continue to look for avenues to obtain orphan drug designation that would be what's required to move.
Moving to next steps so until we're able to obtain orphan drug designation and we won't be moving forward in Europe and.
And Ken just the next question please.
Thank you.
And our next question comes from a cost of Larry from Wolfe. Your line is now open.
Thanks, a lot sales.
On the two pads on.
Starting off just on average how many infusion of two patients who had the kind of pause treatment during the supply disruption have remaining for the pad there and are you seeing any rates of kind of prescription abandonment.
And then looking more brought to them on supply the we've seen from your phase III study, although the Proptosis response kind of plateaus around week 18, and some of the other endpoints continue to go out have you considered longer dosing cycles past eight doses for certain types of patients, let's say chronic patients.
That could help with the durability of effect and then lastly, we noticed you recently filed the method of use patent on re dosing patients with the pad. The can you talk about the puts and takes about getting the re dosing language on your label either through getting the optic X data on your label and get out of that Orange book patent.
Running a separate re dosing trials on the line.
Sure. So on average about the average patient that was disrupted it was about halfway through the dosing.
On average so.
If you looked at that there'll be about for.
We are.
Saying that if you look at through.
The 12 week period to.
To the 24 week period, we saw continued improvement and patients across a number of different metrics.
And the trial from quality of life to a number of other metrics. So we.
The data shows that are for.
Six months or eight doses is required to benefit. These patients we are not pursuing longer dosing of patients at this point and time.
Relative to REIT treatment, we did.
And our optic ex trial and look at re treatment and showed effectiveness and and.
The population that is not included in our forecast and and.
And we don't have current plans to add debt to the label as it is currently covered from the standpoint that patients are R. For the treatment of thyroid eye disease. So we believe that will be covered and our current label.
And that.
And that becomes a reimbursement discussion with individual plans and we haven't.
And we Havent had treatment for three months, so we really haven't seen and.
And a number of retreat of patience of it.
And would give us any evidence to that point so.
I guess, we'll see over time, if there is re treatment of some patients what that looks like but we don't see a development of regulatory strategy. There at this point and time.
Thanks for the cash next question of just the answers.
On the question on.
On the patent.
We have filed patents on on broader indications and.
And opportunities based on our clinical trial results. So that's pretty standard practice.
Just the next question.
Thank you.
And our next question comes from Gary Nachman from BMO capital markets. Your line is now open.
Hi, guys. Good morning, and it sounds like Youll have enough to pay the supply to meet all of the demand from the backlog is that just from that one manufacturing slot of cattle and or will you need to get another slot of cattle and before year end before you get that second manufacturer and place I just wanted to make sure that there won't be.
The supply issues again going forward.
And then just talk about the infrastructure building and Europe and besides the place.
And what else from your portfolio could you funnel, there or would you be in licensing more products for Europe potentially thank you.
And in Europe, we're gonna of a pan European infrastructure consistent with what other rare disease companies too are typically so.
The limited infrastructure to be able to launch of a rare disease medicine and <unk>.
Certainly as we look at ongoing business development activities.
We would look at global licensing, where the medicines can feed into our.
Our U S Europe and other infrastructure that we will build.
Relative to past the supply and one lot does not supply.
On a long term period, what we said is on average its about a month or so with each run and that's made.
We continue to manufacture and we've continued to manufacture to peso.
Since our last year, and we expect continued manufacturing with Kendall and.
And that will be able to.
Manage and and satisfy the expected uptake and beyond for.
And it depends on it and we all.
Also make profit have made progress to getting our second manufacturer online by the end of the year. So we are confident and our ability to.
Supply the market at this point and time.
Thanks, Gary just for the next question please.
Thank you.
And our next question comes from David Steinberg from Jefferies. Your line is now open.
Thanks, and good morning, and answer your questions the <unk>.
First is historically with the number of orphan drug launches.
On.
And they are often a lot more patients to their found over time, so the time to peak sales.
And the and the number of patients.
And I was just curious now that the drags it out from a market and the market per year, and Theres more peace and awareness and doctors now have a therapy that works.
Have you looked at some of your assumptions behind the patient the eligible patient pool I know it wasn't on a lot of literature out there and when you launch, but any changes in the thoughts on the patient pool and then on that subject.
Three of four months of learnings, we're the we're not patients on drug and you could look into other things and I was just curious any learnings.
On the treatment of side of that.
And to making a better patient experience and the worst side effects.
So that's on optimizing dosing and then.
The second question is on business development, obviously of a lot going on and he said 22.
Development programs is there and appetite for further BD.
And what sorts of things that you're looking for and then.
And the final question is just on reimbursement.
The launch took a lot of stakeholder and from a surprise, including the tiers.
And as I understand it most of the.
Most of the payments have gone through but there have been some rejections and I was just curious to that add roughly what percentage of the patients are on compassionate use who didn't who are denied therapy. Thanks.
Sure I'll start the and.
I'm not sure exactly but we have on nominal level at this point I don't know for really have anyone on compassionate use for just re launching there may be a few but we do not see of.
And the material level of patients on <unk>.
Compassionate use at this point and time reimbursement is.
As we've discussed over the last year has been better than expected and the.
And the patients are moving through the process on on the.
And the chronic side, there's generally more discussion of it takes a little bit more time as we provide more data.
And to those plans, but the overall reimbursement has not been a significant hurdle it's in line with a.
A rare disease medicine and.
And we've continued to expect that to worked effectively of the other question around dosing side effects.
Nothing changed.
As a.
The treatment therapy, and <unk> and.
We don't see any evidence to change that.
Adverse events or are similar to what we've seen and the clinical program or <unk> and we continue to make sure we collect in the reverse events, but and all of our safety updates that's been consistent with our studies and and our label.
As far as times of peak sales.
And the patient population.
Our guidance remains the same we see and about 70000 patients and the chronic population as we've discussed.
Continue to feel confident and the 15 to 20000.
And at new patients coming into the market with the two thyroid eye disease.
And we continue to see strong support and that those numbers are accurate and I think over time as we are.
And expand our DTC programs as I've discussed and and we look to accelerate the education of graves patients around the impact of eye disease, and we may learn more but it's too early to see if there's a significant change in that and.
Lastly on the business development, we continue to be aggressively pursue other potential transactions and in line with our therapeutic areas and.
And we expect it to be aggressive there to add further development stage medicines.
Great. Thanks, Thanks, David and just and it and were at the top of the out of it looks like we have time for one more question.
Thank you and our last question comes from Dana Flanders from Guggenheim. Your line is now open.
Oh, great. Thanks for squeezing me and I just had two.
Quick questions, just first on <unk> and the <unk>.
Chronic study one.
I'm wondering if you have any sense, if the efficacy of the.
Wayne's at all kind of the longer the patient and has had chronic disease. So would you expect better efficacy and patients with disease for three years, instead of eight and kind.
And was that a consideration at all for.
The study and design and then just my second quick one on KRYSTEXXA given.
Given the uptake and success you've had with immuno modulation US wondering if you could give us an update on the kind of average net vials per patient.
Would you stand currently thanks.
Sure Dana So that's about 7% to eight right now on average vials per patient.
With KRYSTEXXA.
We have seen that increase over the last year of pluses as the <unk>.
<unk> of the patients taking KRYSTEXXA plus the immuno modulation has increased to about 35% to 40% now when we look at the chronic population and looking at patients who are three years past diagnosis versus eight and we've seen patients out to 'twenty for years past diagnosis have very good success.
And.
Being treated with the peso.
So and that broad spectrum of of three to four years and.
Hearing feedback from physicians and we're not seeing any differences relative to time passed.
On the acute phase.
Great. Thanks, Dana and thank you Justin This concludes our call. This morning, a replay of this call and webcast will be available and approximately two hours. Thanks for joining us.
The.
This concludes today's conference call. Thank you for participating and you may now disconnect. Thank you.
Okay.
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Yes.
And.
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