Q1 2021 Theravance Biopharma Inc Earnings Call
Today's conference is scheduled at the begin shortly please continue to standby. Thank you for your patience.
[music].
Ladies and gentlemen, good afternoon.
Like to welcome everyone to the gap there of dance Biopharma first quarter 2021 conference call.
The presentation, all participants will be in a listen only mode.
Question and answer session will follow the company's formal remarks.
I ask the question press the Star key followed by the digit one on your phone.
Ken Thats Star one to ask the question is listening via webcast. Please mute audio on your webcast device before asking a question over the phone.
I will repeat these instructions after management completes the prepared remarks also today's conference call is being recorded.
And now I would like to turn the call over to Gail Cohen, The Vice President Corporate Communications. Please go ahead.
Good afternoon, and thank you for joining the third of them Biopharma first quarter, 2020, One conference call to discuss our debt.
As always I remind you that this call will contain forward looking statements that involve risks and uncertainties, including statements about our development pipeline expected benefits of our products anticipated timing of clinical trials regulatory filings and expected financial results.
Information concerning factors that could cause results to differ materially from our forward. Looking statements is described further in the filing for that D. C.
Now I would direct your attention to slide three.
Joining us are Rick Winningham, Chief Executive Officer, followed by Rick Brown Senior Vice President of development, Frank past, two loans, Chief business Officer, and Andrew Hindman, Chief Financial Officer.
Following our prepared remarks prepared remarks, we will open the call for questions now I will hand, the call to Rick Winningham for opening remarks.
Thanks Gail.
2021 is a pivotal year as we progress for the strategy of approaching drug development differently. We're pioneering a new generation of small molecule medicines designed to better meet patient needs and.
This year of driving several clinical study readouts over the next several months.
We believe we can deliver medicines that can make a difference because of how we approach the drug design process as highlighted on slide for <unk>.
The harnessing our deep understanding of chemical design and the intersection of that design with disease Biology are novel compounds are first delivered two of the area in which the disease is active there.
Of our molecules are uniquely designed to optimize the activity exposure relationship in the organ of interest while simultaneously minimizing activity outside the targeted disease area.
This precise approach aims to expand the therapeutic index of the treatment with.
Which is typically a narrow window for systemic drugs to potentially result in better efficacy and fewer side effects.
As I said the process starts with a set of underlying and understanding of the underlying disease constructing the molecule.
Yeah, the anti inflammatory space to modify inflammation and specific tissue, whether targeting tissues of the law the got the eye of the skin.
We rely on or in house proven translational science and development expertise complemented by strategic partnership ships to create proprietary medicines of unique value to patients health care professionals payers enhance investors.
We will have three important clinical studies reporting day to beginning in the second quarter and throughout the balance of the year.
Moving to slide five you can see all of our key programs first let me address the delay in the Crohn's program like many working to deliver better treatments for the Crohn's community. We've experienced recruitment challenges, we're working as expeditiously as possible to complete enrollment in the work to deliver topline results for the ice and setting.
The <unk> program in Crohn's of late 'twenty or 'twenty, one or early first quarter 2022.
Outside of the Crohn's program, we're delivering on the strategic priorities, we remain focused on creating significant value for our shareholders in three ways.
As noted on slide six first commercial performance, even during the respiratory pandemic for of COPD treatment like <unk> Perl rig as we shared in the third quarter of 2020.
Has been contributing to the change of therapy <unk> Biopharma is financial complexion. As we started 2021, the calorie market share in retail and a durable medical equipment segment moved to its highest level in January of 19% since the launch of the brand as pulmonologists begin to see more moderate.
Severe COPD patients again and refocus their practice <unk> is positioned to provide benefit to patients who require the medicine, whether it's through increased hospital admissions or office visits.
Second we will deliver on key inflection points for programs that have been a major focus of the company <unk> of wholly owned transformational products in rare disease, and symptomatic N O H, which phase with phase III data in the study 169.
Delivering on the promise of the unique organ selective medicine for IBD complemented by a partnership.
We're the market leader Jensen.
For EIS and setting the habit ulcerative colitis in the immediate future phase two data on nasal setting there, but an inhaled novel of.
JAK inhibitor targeted at stopping pulmonary hyperinflation of the lung.
And third trilogy.
But driven by the launch of asthma continues to grow providing a source of capital for our business given.
Given the importance of the development pipeline delivering all of the key data readouts throughout the remainder of 2021 I will turn the call over to Rick Graham Senior Vice President of the development Rick will begin by highlighting the key time lines and the reasons why T. V. P. H is excited about the Readouts following Rick Frank will review the <unk>.
First quarter commercial results and finally, Andrew will review, our financial results and guidance Rick.
Thanks, Rick.
It's exciting to be part of the quarterly update, especially during such a transformational year for the company. While this was my first time presenting in the quarterly call I've been part of the thorough Vance Biopharma team since October 2015, helping the company execute across research and translational science development and commercial and I've had the opportunity to.
The lead the ample of OXXO team and I've been sitting in the project teams.
Scientific excellence and focus on insight and innovation make survey of Biopharma of special company.
I believe it's because of this difference amongst others that we've been able to recruit top talent into our development organization over the last 18 months, including Dr. Chin Lee, who recently joined our company as Vice President head of clinical Science and Chief Medical Officer.
Tim brings extensive drug development experience, having previously been at Genentech Lilly and Abbott.
His prior success in leading novel therapeutic programs across a variety of therapeutic areas will be valuable as we seek to advance our PARP or pipeline.
Chin obtained his medical degree from the University of North Carolina at Chapel Hill, and also has a master of public health from Northwestern University. We're delighted to have Qin joined the thorough vans biopharma team.
Moving to the pipeline, let's first discuss nasal sitting there on slide seven of our Nebulize lung selective Pan JAK inhibitor with.
We first talked about nasal sitting of during our R&D day back in 2018, when we were studying it for the treatment and prevention of lung transplant rejection.
Then last year in response to the pandemic, we deliberately chose to expand the clinical development program to begin studying bezel sitting out there as the potential therapy for acute hyper inflammation of the loan as a result of COVID-19.
As the pandemic continues to surge in certain communities and parts of the world treatments are needed for hospitalized patients.
Moving to slide eight there.
<unk> Biopharma is developing those will sit in the to inhibit the pulmonary inflammatory cascade triggered in response to viral infection.
As of JAK inhibitor nozzle sitting of intervenes broadly to interrupt immune activation and restore balance by.
By nature of being an inhaled <unk> lung selective treatment nasal sitting of is designed to deliver of therapeutic drug dose directly to the lung through nebulous nation with the minimal exposure to the bloodstream and other Oregon's we.
We believe that achieving this immune homeostasis is critical to preventing cytokine release syndrome that has been shown to cause of acute lung injury ventilator us and increased morbidity and mortality in COVID-19 patients.
On slide nine we highlight several important observations from our preclinical work with nasal sitting there that suggests it may provide a unique therapeutic benefit through three distinct activities starting on the left panel meso sitting there was a potent pan JAK inhibitor.
The middle panel shows that nasal sit in the may predict protect against virus induced cell death in the far right panel demonstrates prevention of cell entry limiting virus dissemination and the lung by potent inhibition of the endogenous machinery for Sars COVID-19 two infection.
Our goal is for nasal sitting there to be the first inhaled treatment for broadly interrupt viral induced activation and restore immune balance and the loan.
We have now fully enrolled the 200 patient phase II study in hospitalized COVID-19 patients and plan to release the topline results later in the second quarter.
Now, let's move the eyes and sitting there on slide 10, our oral gut selective pan JAK inhibitor to treat inflammatory bowel diseases, which is partnered with Janssen.
On the next two slides I'd like to paint a picture for you that should really underscore the value of the organ selective approach in IBD the.
All of which is to maximize therapeutic benefit to patients while minimizing side effects we.
We do this by keeping two key design principles at the forefront first targeting validated disease biology, and second designing is in certain of the novel chemistry to unload active drug directly to the site of action in the gut.
For IBD the biology, we are targeting as the JAK pathway.
We pause at the potent inhibition across all JAK isoforms that as JAK, one JAK two JAK three and take two within the GI tract is the key to maximizing the therapeutic benefit while minimizing the risk of systemic immunosuppression.
We believe the gut selective JAK inhibitor like eyes, and fitness has the potential to be a game changer for the treatment of IBD and then it may become a once daily oral treatment amenable to earlier lines of therapy as well as combination approaches.
On slide 11, I'll highlight a few important data points from our preclinical work and support the gut selectivity of Ais and sit in them.
As shown on the left panel island sitting the big to the high margins of the systemic safety of non clinical studies relative to us the systemic JAK inhibitor, which has little to no safety margin.
On the right panel, you'll note that systemic exposure of items that have us low in patients with ulcerative colitis, which aligns with the highest safety margins in animal studies.
Notably the oral bioavailability of Ais and sitting there was only 2% that compared to other systemic JAK inhibitors, which was designed to distribute throughout the body and are therefore highly bio available.
Importantly, got selectivity confers low systemic exposure and offers the potential for an improved side effect profile compared to systemically distributed jacks.
On slide 12, I'll focus on okta, the optimization of benefit or efficacy with the gut selective approach.
On the left panel, we have demonstrated a lack of T cell infiltration into the lamina appropriate that's the site of action for JAK inhibition via Nana strength technology in a mouse model of IBD. This result.
<unk> suggests that the EIS and sit in the blocks inflammation and penetrates deep within the colonic tissue.
As shown on the right panel the steep tissue penetration at the site of action in the mouse model translated in the clinical activity and the sensitive endpoints of rectal bleeding and endoscopic improvements after only four weeks of treatment in patients with ulcerative colitis.
These data, which were published in the journal of Crohn's and colitis provide confidence in the biologic activity of Ais in fitness and its potential to treat IBD by maximizing drug concentration of where it matters.
At the site of action in the Gi tract.
We expect the top line results from the Phase <unk> ulcerative colitis study in the third quarter and topline results from the Phase II Crohn's study in late fourth quarter to early first quarter 2022.
Now, let's transition damper locks the team on slide 13 <unk>.
Importantly, we're on track to report top line phase III results in quarter three of frame blocks. The team of once daily norepinephrine reuptake inhibitor to treat symptomatic neurogenic orthostatic hypotension.
As slide 14 notes, we're working to break new ground as there's a significant unmet medical need for the treatment of symptomatic end of wage this condition profoundly impacts the quality of life.
Person people suffering from Parkinson's disease, multiple systems atrophy and pure autonomic failure.
Symptoms in these patients include dizziness, or lightheadedness fatigue difficulty walking and weakness.
This results in a high impact on quality of life high risk of injury from falls and the significant burden to caregivers for these patients.
This condition can lead to depression, social isolation bone fractures and head trauma due to falls and overall morbidity.
Slide 15 depicts how ample occitane may target and correct. The unpaired basal constriction due to the dysfunction of the autonomic nervous system and people that are living with symptomatic of no age.
The left panel shows that had ample oxazine inhibits the re uptake of endogenous norepinephrine, which leads to an increase in levels of the axon terminal of patients that are still producing norepinephrine, which results in an increase in blood pressure.
With a distinct mechanism of action ample oxygen has the potential to be differentiated from current treatment options in the areas of durability of effect once daily dosing and of reduce risk of supine hypertension.
It's our goal for ample ochs of team to be the first treatment to demonstrate a sustained impact for patients managing the chronic and debilitating symptoms of N O. H. We look forward of sharing results from the first of two pivotal studies in the third quarter.
Next let's move to slide 16, and Frank will speak to the commercial team's progress with your Palmary Frank.
Thanks, Rick.
Turning to slide 17, remember you calories indicated for the maintenance treatment of patients with COPD is the first and only once daily nebulizer long acting muscarinic antagonist that provides a full 24 hours of control for patients in the second full year since its launch of <unk> continued to experience solid net.
Net sales growth on an annual basis in 2020, which is a trend we expect to continue in 2021 and beyond given the significant patient opportunity for Ya powering the.
<unk> Biopharma and <unk> co promote in the us with our combined sales of infrastructure targeting healthcare professionals, who treat COPD patients suitable for your salary.
As a reminder, Caribbean Biopharma commercial and medical field teams cover the hospitals segment for COPD patients and Beatrice covers the community Pulmonologists.
Also remember the Beatrice their advanced Biopharma commercial partnership is the 65 35 profit and loss split so the only shows our implied 35% of the <unk> sales.
On slide 18, we.
Present, the survey of Biopharma is implied 35% share of net sales for Ya Palmary during quarter, one of 2021, $12 9 million in revenue in quarter one.
Turning to slide 19, we continued to gain share in both the hospital and the community settings. Many patients with COPD experienced an acute episode serious enough to require a trip to the hospital for immediate care.
The hospital, then becomes the key point to assess and the switch a person with COPD from their current medicine to empowering.
Data shows that many patients who received the powering in the hospital are discharged with the prescription to continue treatment, allowing for continuity of <unk> therapy for patients post discharge.
The Beatrice and <unk> Biopharma teams continue to work effectively at converting business from competitive products to you Pal read during the hospital to outpatient experience.
Notwithstanding the unprecedented nature of 2020 of the product continues to effectively manage the pandemic associated headwinds.
The <unk> calorie picked up momentum throughout the quarter quarter. One 2021, net sales were flat compared to quarter, one 2020 and were down 5% from quarter for 2020.
In January and February of this year sales force and HCP interactions remain difficult, which affected our ability to get in front of COPD medicine prescribers.
However, the environment improved in March and demand for your <unk> was up 28% over February and person details grew 65% over baseline in March.
Have also been encouraged with the prescription activity through late April both new to brand our axes and total Rx US have continued the upward growth that was reignited in the late first quarter.
In addition, hospitals continue to add <unk> to formularies and new accounts are being added weekly.
You can see this upward growth on slide 'twenty progressing beyond the end of quarter. One we continue to track the key performance metrics since launch and these our quarter one 2021 metrics.
Total of 719 formulary and non formulary hospital accounts have ordered your salary.
And 67% of these accounts the board would you tolerate at least twice.
Quarter, one 2021 formulary wins totaled 11, representing 38 total accounts, which equate to 400 formulary 440 formulary accounts launch to date of formulary win rate of 91%.
85% of these formulary accounts purchased to date, owing to a lag between formulary approval and ordering commencing.
Our Med affairs team continues to provide timely information to Hcp's based on inbound requests and requests for formulary presentations in fact, the medical science liaisons formularies support for presentations in quarter. One 2021 was the highest since quarter one of 2019 when the.
Brand launched.
At the end of quarter, one your powers of commercial coverage with 74%.
Looking ahead of its important to understand that according to the gold guidelines alum is foundational to COPD maintenance care for appropriate patient types.
The execution of our tactical plan will continue to leverage the guidelines in appropriate patient types, while we continue to optimize the marketing mix through rigorous and continued measurement of tactics. So now I'll turn the call over to Andrew to review the financials.
Thanks, Frank and before moving to <unk> Biopharma financials, let's start on slide 22, with an update on Gsk's trilogy.
As a reminder, trilogy is the first and only once daily single Inhaler Triple combination therapy approved for the treatment of COPD and asthma.
Terror events Biopharma is entitled to receive upward during royalties on global net sales of trilogy through our economic interest in Trc LLC.
At present, 75% of the income from our economic interest has pledged to the service interest and principal payments on our outstanding 2035, non recourse notes and the remaining 25% of income is retained by us.
In January of 2021 we received $21 $3 million from Trc LLC and in April of 2021 we received an additional $22 million.
During Gsk's first quarter earnings call. They noted the trilogy continued to lead the market as the single inhaler Triple therapy in Q1 with Q1 2021 sales growth of 37% over Q1, 2020 generating global net sales of $341 million during Q1.
2021.
Moving to slide 23 here, we provide ceriman biopharma as first quarter 2021 financial highlights compared to the first quarter of 2020.
R&D expenses for the first quarter of 2021 were $67 6 million compared to $66 million in the same period in 2020.
SG&A expenses for the first quarter were $30 6 million compared to $26 3 million in the same period in 2020.
Regarding financial guidance for the full year 2021, we are reiterating previously issued guidance for R&D, excluding share based compensation, we expect to invest between $195 million to $225 million relative to an actual R&D investment of $230 million in 2002.
'twenty.
For SG&A, excluding share based compensation, we provided a range of $80 million to $90 million relative to an actual SG&A expense of $77 million in 2020.
As we noted on our previous quarterly call. When we issued the 2021 guidance, we expected greater spending during the first half of 2021 compared to the balance of the year driven largely by annual incentive compensation expenses that occurred in the first quarter.
And with that I'll turn the call back to Rick for closing remarks.
Thanks, Andrew.
As we bring the Q1 update to a close that we'll share once again, our 2021 milestones and value driving catalyst for what we plan to be a transformational year for <unk>.
<unk> breadth of our development programs are developing are beginning to deliver results.
And we're eager to see our science come but for western while.
While we're excited about the science for most enthused most enthusiastic about what it can potentially mean for people who need the medicine's most whether it's preventing the person the hospitalized with COVID-19 from entering.
Of the ICU and disease progression or an MSA or Parkinson's patients of their family managing in a wage experiencing fewer falls of young adult trying to live in the normal life, while navigating the daily pains and challenges of ulcerative colitis for Crohn's disease. We look forward of the day the stair events Biopharma development organization can pass the baton.
Onto our commercial team, who can make a difference in these communities as they've made a difference of the COPD community with experience compassionate improved treatments that provide a better quality of life.
As a reminder, our near term catalysts or nasal certainty of phase two topline results in the second quarter two critical data Readouts in Q3 of 2021, and <unk> phase III analyzing certain of the phase two b for ulcerative colitis and phase II of Crohn's disease. In late Q4 early Q1, I will now hand the.
The call back to the operator for questions.
Thank you once again, if you would like to ask a question you may do so by pressing the star key followed by the digit one on your Touchtone phone.
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And we will pause for a moment of symbol Eros day.
We will have a first question from Lisa <unk> with Evercore ISI. Your line is now open.
Hi, Thanks for taking the question.
Comment on give us some color on.
Sort of why the at the.
And a little for enrolling the crohn's as opposed to the Altra, calling us.
Okay.
Yes, that's it.
Good question I think the Crohn's traditionally us.
No look across the industry, it's it's been a little bit slower to enroll generally regardless of.
Regardless of the development program.
Second debt.
Once you have patients that are on a successful medicine.
And as they begin to get treatment, particularly in the.
The.
Period of cold, but.
They've been slower to switch off and with that I'll turn it over to Rick for some additional comments.
Yeah, Thanks, Rick and thanks for the question.
Just a couple of things to add with enrollment complete now for nasal sitting up in Iceland sitting the for ulcerative colitis, and the <unk> study and nearly complete for AMT box seen we've shifted resources over the Crohn's study. So that we can further enhance our engagement with clinical trial sites. So.
We do see the light at the end of the tunnel and will deliver the crohns data as expeditiously as possible.
Okay and from the perspective are they waiting to see data from both studies, thus far kind of making that option decision or will it be based on.
Just one of do you have any sense of how they're thinking about it.
Yes, so our are.
Obviously as I mentioned before we're working with Johnson sort of day in day out on this program.
Great relationship. They followed the followed the progress of the ulcerative colitis.
Program thrilled about that.
Approaching approaching data relative to our responsibility under the.
Agreement with Johnson, we need to deliver.
<unk> Crohn's and ulcerative colitis state of package Johnson.
For for the opt in then.
We need to work with them to minimize minimize.
Minimize any delays that we might have from the program.
Weighted to the little bit of of separation between the data and the ulcerative colitis data between ulcerative colitis and Crohn's because it's good to keep in mind that of course were accruing right now to a phase III maintenance program in ulcerative colitis, and I'll have Rick touch on the plans of our regulatory plans once we receive the ulcerative.
Glide us data Rick.
Yeah sure. So when we received the phase <unk> data in ultra ulcerative colitis in Q3, we will be planning to have end of phase two meetings with both FDA and EMA. So at the end of that Phase II study will need to select the dose. There are three doses that are ongoing and that study to move forward into the phase III induction study.
Okay.
Okay.
And then.
For <unk> the team can you maybe.
Just for a view, how you're thinking about the regulatory strategy of Newton two studies, yet, okay and look at the sales lift not there on.
This is of much more robust program, even with just the one study then really they debt and maybe you can tell us how you're thinking about.
Kind of your next steps after the trial reads out that's my last question. Thank you.
Rick go ahead.
Yeah. Thanks, Thanks for that question too. So just a reminder of everybody about the program that you're referring to we have.
Two pivotal trials. The first of those is called Sequoia. Mrs of four week efficacy study randomized placebo controlled patients from Sequoia at the end of that for week treatment period can roll into the next study, which is the durability study called the Redwood. That's a 16 week open label study at the end of 16 weeks Theres of ran.
The mine's withdrawal for another six weeks. So it is a very robust program. We worked closely with the FDA on the design of the study and what our plan is currently is at the end of the Sequoia study and the topline results in Q3 for that study, we will be having a conversation with the FDA.
Depending on the results our plan is to engage the FDA, especially around the area of breakthrough therapy designation now we do expect that we will need to complete the Sequoia and the Redwood study as part of the filing package, but with breakthrough therapy designation there are benefits with regard to an enhanced.
Or expedited the NDA review and we'll be exploring those with the FDA.
Okay, Great. We're excited for all of these upcoming catalysts for the thank you for the questions.
Thank you. Our next question comes from Mike from with Cowen. Your line is now open.
Hey, Thanks for taking my questions.
For the granularity you're able to give on you tolerate the.
The market share in the formulary data for.
The seems impressive.
What do you think needs to happen to the kind of the broader nebulize market kind of.
Allow those metrics are really start translating into greater sales growth.
Obviously that will have tremendous impacts of the bottom line for you guys.
Yes, I think well number one I think the the.
Abatement of COVID-19, such that we actually have pulmonologists.
Available.
And COPD patients, which obviously are fragile population to begin with.
To begin.
Seeking seeking improved therapy versus what they what they've previously been on that that is going to be a significant change because I think any external metric that you'd look at with regard to the number of either office visits or the or the number of per.
Pulmonology, new new starts by Pulmonologists outside of COVID-19, it's been almost nil, it's one of the most impacted specialties.
I think so number one getting getting out of COVID-19 and being able for our reps to go continue to detailed pulmonologists is free.
Frank said, we bid.
Very successful in continuing to rack up formulary approvals and those formulary approvals just need to roll through to the.
The two ordering which frank touched on and I'll, let him take it from there.
You know.
Rick you touched on a lot of the.
Things that really matter I mean, the primary driver of the results was really the surgeon infections, particularly in late 'twenty 'twenty and bleeding into 2021.
In many parts of the country. This was really a double edged sword for your power because of our target audience Pulmonologists, we're occupied treating patients with with respiratory problems also a lot of institutions and hospitals restricted access for our people.
And due to that quite frankly, both companies kept people home safely at home for us for quite some time during the late 'twenty 2020, and also 2021.
We did see sort of a rig re ignition toward the end of first quarter that we were very pleased with.
It coincided with other market factors that we thought were going to contribute to growth of the powering.
Just starting off with with April the early prescription data we've seen from April C.
Shows new to brand Rx is in total Rx us are growing nicely.
We've now had the chance to evaluate.
Excuse me all of our non personal promotion and digital assets that we put in place during the pandemic.
We've taken a look at those we refined made improvements in the investment portfolio of the weighting of each of those and the prioritization.
Since we have we know a lot more about the return on investment for those I would also add.
We have both companies full complement of sales representatives back in the field for face to face interactions and this is important for.
For obvious reasons, but it's also important because our promotional in fact of effectiveness.
Is significantly higher when were in person in front of the customer.
And we also know that our in person details as a percentage of total details continue doing increase on a weekly basis.
And I guess I would also add that we increased share throughout the pandemic in 2020. So we view all of this is as leverage points compared to the pandemic period, which allows us to feel pretty positive about the balance of 2021 and beyond.
I think just to close out mark the.
Yes.
We play out we've talked about it before but.
But we are we obviously.
That the patients with low peak inspiratory flow of specific.
A specific patient population with COPD that can benefit.
Disproportionally actually from you Pal re as evidenced by some earlier clinical work that we've done and.
And we will be getting a we'll be getting of club and other clinical studies underway.
This year with regard to.
Yeah.
The expectedly.
Expanding the market into more of low peak inspiratory flow of patients.
Okay, Great that's helpful and then.
Maybe this for more for Andrew for maybe Rick.
Just can you give some more granularity on the financial guidance and kind of how you expect some of the spending to evolve kind of in the back half of the year as.
Some of the faith Yankees later stage trials kind of start reading out.
I guess should we expect spending to kind of.
Dropped significantly as the Readouts happened or because of these rollover studies should we kind of be expecting as we head into 2022 to spend the R&D expenses to say the similar.
Go ahead Andrew.
Well I think we're not going to give more quantitative granularity mark beyond what we've just given and reaffirmed for the full year, but qualitatively, yes. Your points are well taken that the competition's spend.
Especially with some of the key studies.
And ample ochs of team items of note.
In metals of Nib.
Completing the at least the.
The the currently design portions of those development programs, yes, there will be lower spend going into the remainder of the year.
And those of the key drivers of the development spending because the the SG&A spend is going to remain pretty much.
Steady steady as it goes over the remainder of the year.
So how big of give some granularity.
The other important thing to keep in mind us that the cash flow generating parts of the business both for <unk> calorie and trilogy.
We see continued growth and project that to increase throughout the remainder of the year of those sorts of of cash. So this is why we referred to as sort of the changing financial complexion of our business.
Which is picking up speed in the in 2021, and we expect to continue going into next year and beyond.
Okay. Thank you.
Thank you. Our next question comes from Geoffrey Porges with SBB Leerink. Your line is now open.
Thank you very much.
First of all of the follow up on the cash question. It sounds as though you are.
Planning if not initiating.
For the trial in ulcerative colitis before.
You get the Crohns data and the J&J opt in is that of correct.
Rotation of of your comments or.
Is it that you won't stop the ulcerative colitis trial until the first part of next year. When you got the crunch data for.
First question no debt.
Yes, Jeff let me just take that quickly, though the the maintenance the may.
The phase III maintenance study has been ongoing since we initiated the phase II b portion of we.
We have negotiated with the regulators in both the us and Europe.
Given the nature of the <unk> data of the nature of the <unk> data of the in fact, rolling patients and getting a jumpstart effectively on the phase III program of rolling those <unk> patients.
Into of maintenance study and again, that's been ongoing since our since we started the start of the phase III program.
Okay Alright.
The maintenance study going to be sufficient for approval or do you need to do an additional pivotal trial in ulcerative colitis.
We'll need to add to the the number of patients on maintenance, which we will which will come from an additional induction phase III induction study that will start with the agreed upon dose.
With the regulators post the data Rick.
Yeah, and just a reminder to everybody. This is all rolled together in one seamless phase two b three protocol. So it's a very complicated protocol, but its got the to be portion of those patients roll into the maintenance study of that Rick is talking about and then at the end of two B. There's another phase III induction study that also rolls into that St.
Maintenance study. So this is all part of the same protocol okay.
So I just wanted to follow up so Dan will cost us go down in the.
The back half of the year or whereby the maintained for that program because of that transition.
Well the causal sorry, Andrew go ahead.
The they'll go down the total spending operating expense will go down from Q1 to Q2 into Q3, and Q4 were but we're not giving a quantitative guidance. There. That's just a directional spend but Jeff for the full year range. This does include the continued or do we assume that we will.
Due to income.
To execute the phase two b.
And the phase III portion the <unk>.
Maintenance portion of the eyes, instead of Nib UC program throughout the year and into next per protocol design.
Great and then just the question on <unk> the team.
Could you.
We're just struggling with the the revenue potential because.
Of the numbers you gave a very large patient numbers, but.
Then north of there are really tapped out at sort of roughly in the range of $350 million in revenue. So could you kind of help us understand whether that's the right benchmark for the commercial potential of and prolongs the team or if it's different in your view of without giving a number from you why might it would be significantly different from window for rich. Thanks.
Yes, I think the.
The the difference is sort of.
Three or four fold between the two products one of our R. R.
Our objective with the with ample occitane as a treatment for for <unk>.
The commercially and the effect that we plan to have on patients is greater than where north arrow.
I was at peak sales and the reason for that is one.
<unk> got of.
<unk> state of product once a day with very long half life that should be able to stabilize those norepinephrine levels and therefore.
Address designate us with efficacy of.
Debt is we.
The hope is better and certainly more durable.
The north there the <unk>.
For thorough program.
The therapeutic index that we're able to achieve with <unk>.
Patients with the NIH is in fact greater than what can be achieved with with north ore and there will be less stopping and starting of of north arrow because of both the efficacy and safety.
May know that north of there are.
Many patients titrated to effect, we believe that with the long half life of amphora locks of teen.
Debt that titration of obviously, we don't have the planned debt, it's a much simpler dosing regimen.
If the if the small phase two as an indicator and the.
<unk> now published the levels of norepinephrine increases that we that we see we should be able of our plan is to in fact see that see that efficacy come through in the phase III program and I'll, let Rick comment further because he's quite close to it.
Well I'll just add one thing thats, the I think because of really important potential for differentiation.
Trucks the dope.
Is it the noradrenaline prodrug, so you're adding north north of an effort or noradrenaline straight into the body. Exogenously contrast that to ample ochs of team, which is a norepinephrine reuptake inhibitor. So what we're doing with ample oxazine us using the body's own nor up in there.
For us that's already there now when when patients with this condition stand up that's generally when norepinephrine levels are at their highest when they lay down that's one norepinephrine levels are at their lowest so again and the supine hypertension.
The concern with regard to black box warning, when you're adding endogenous noradrenaline into the system, there's a high likelihood for supine hypertension, when youre using the body's own norepinephrine, which is low at night, we believe theres, a very low risk for supine hypertension. So that's going to be one of our key differentiators.
Terrific. Thank you very much.
Yes.
Thank you for our next question comes from.
On the partner along with J P. Morgan Your line is now open.
Hey, guys. Thanks, so much for taking the question.
I was just wanting to follow up on the prior question, which is how much site overlap is there between the UC and Crohn's disease studies for items sitting neck, and what maybe you could expand on when you say youre going to devote more resources to the Crohn's disease study Inc.
What does that mean and maybe if you can provide some color on that thanks. So much.
Rick do you want to take the.
Sure. Yes, there is some overlap as you can imagine because in order to enroll this the.
The trial of 160, or so of patients you need you need 100, or so of sites because.
The number of patients that you get per site is relatively low. So there is some overlap, but it's not entirely on top of one another for UC and Crohn's and then just to clarify my point about more resources.
Really what what this require us to get over the finish line here is constant engagement with sites.
There's ah patients with Crohn's in order to.
The eligible for the trial they need to be in an active flare theres a lot of pre screening activity that goes into this and this is a labor intensive enrollment process for these clinical trial sites. So so what I mean by resources is just more people within the company actively engaging with our clinical trial sites of which we have a lot. So we're just staying on <unk>.
Top of that minute by minute hour by hour to get over the finish line.
Thanks for taking the question.
Yeah.
Thank you for your question kind of.
Our next question comes from Douglas Tsao with H C. Wainwright. Your line is now open.
Hi, good afternoon, thanks for taking the questions just.
In terms of your power really when we look at the sort of growth that we saw.
Started to see sort of net at the end of the first quarter.
And just curious is that coming from the existing sort of account base for those that already happened on formulary, where is it coming from the addition of new hospitals to the.
Sort of account base and I'm just curious I think you said that there have been about 719 hospitals that have ordered but just curious what the ultimate sort of and as far as the target universe of hospitals that you see as appropriate.
Sure Doug I'll take a couple of.
Make a couple of points and transitioned over to Frank I mean, I think we can we think we got it.
We get well over 1000 hospitals and obviously our hospitals are focused on those institutions that have disproportionate.
The treatment of of COPD patients. So it's a fairly targeted.
The targeted effort.
I think the.
What we've what we've seen particularly over the last.
Four of $5 six weeks is we've seen increasing increasing orders from the from hospitals that are in our in our universe, which we which we track on a weekly basis. So Frank do you want to yes.
Yes.
The answer is we're getting business from both were growing.
The base business.
As evidenced by the number of hospitals debt.
Already purchased <unk> salary purchasing.
Frequently and now periodically we also add to the number of accounts that purchased from salary on a weekly basis.
And the matter of fact of the last week for which we have data was the fourth highest the week since we launched the brand and the other three highest the week where.
Pre pandemic.
So we're getting business from the base of business and we're growing yet on the new accounts as I mentioned in the remarks, there is a lag time once the hospital puts it on formulary or us.
A lag time, while it gets into the electronic medical records system. So that physicians can access it from the more us and funds.
For the dots and things of that nature.
So quite frankly, it's going just in from the planned.
Okay, great. Thank you very much.
Thank you. Our next question comes from the ground.
One of Morgan Stanley. Your line is now open.
Great. Thanks for taking my question I wanted to go back to <unk> and.
Just wanted to see if you could talk a little bit about what you think would be.
The clinically relevant outcome from the readout expected in the third quarter, and then I'll talk a little bit about how we should think about.
Pricing potential given the different kinds of commercial dynamics that could be at play.
If <unk> is successful that eventually approved.
Sure I think the you know the FDA has said that that of one point of difference is the cleanup clinically meaningful difference in the.
Just say one.
Measurements.
So that's that's clinically meaningful we were able to see a little bit we were able to see higher than that in the phase II study.
But the Rick.
Yes, that's exactly right of one point change in Oh HSA. One. So this is the question on the flow HSA.
HSA questionnaire that talks about are you feeling dizzy or you're feeling lightheaded or do you feel like youre going to blackout or pass out.
But in addition, with US well designed program, we're going to be looking at a lot of other quality of life instruments too. So we've got something that's called the orthostatic hypotension daily activity scale, a patient global impression scale. There are scales that are specific to MSA patients scales that are specific to parkinsons patients.
In fact, we even have a wearable device and the study to monitor the patient activity of mobility. So in addition to our HSA one with regard to the approvable endpoint, we're going into the you look at a whole host of things theyre going to really get at the quality of life of these patients.
And I think from the commercial side.
Clearly you've got a spectrum of patients.
For multiple systems atrophy.
Two two of Parkinson's disease patients for a specific segment of those that the.
That in fact suffer from.
Suffer from N of weight, so youre going to have an overlap of between commercial some commercial pay some Medicare Medicare pay we haven't gotten too deeply into.
Into the talking about the pricing strategy, but that work currently is ongoing at the company as US as is the the segmentation of the of the market and where where we need to go to get what patients out of other Frank wants to add anything to that or not.
No I was going to add I mean, we do view ample locks of team as potentially of highly differentiated product given the suite of products that are available today.
We are working and quite frankly have been working for quite some time on the medical strategy. The access strategy and will have health economic and outcomes research data available.
When this thing potentially launches so we plan to be very aggressive and just qualitatively speaking we plan to price the product commensurate with how we see the differentiation.
Okay got it thank you.
Thank you. Our next question comes from Brian Kearney with Baird. Your line is now open.
Hey, good afternoon, everyone. Thank you for taking the question.
Maybe for Richard on just some thoughts around the trial design for the quiet and Redwood I know in the phase two there was a pretty substantial drop out rate over the first four weeks of treatment and then and then more through week 20. So I was just wondering if you kind of review anything in the protocol definitely between.
Two and the phase III studies to sort of try to manage that drop out rate and also of per the protocol design. How is the ITT analysis of accounting for Dropbox and each of these studies.
Particularly on the 16 week lead in and the withdrawal phase in Redwood, how do you kind of account for dropouts, they're going into.
And then the subsequent my formal withdrawal. Thanks, yeah. Thanks, Brian for the question.
The questions come up a lot with regard to the phase two study and the number of patients that we started with versus where we ended with where we're in the process of writing up of manuscripts for that phase II study, so that will be coming out very soon and there will be more details to come that study. However was originally designed really just look at the presser effect of ambarella.
For the team. So it was a three part study and part a was really just designed to look at blood pressure. We then moved into.
A randomized section that we called part B and the real meat of that study was part C, which was a 20 week study now there were patients in that phase II study that we're coming to Dysautonomia Center in New York, where it was being assessed from all of all parts of the United States and even one patient outside the United States.
So of patients with MSA over 20 weeks traveling to one center, that's going to be very difficult to maintain those on the study. So we see that is very different than the way that we've designed our phase III program.
Can comment that with regard to discontinuation rate. We're pleased with Sequoia study of the four week study, it's around 5% and then for Redwood our discontinuation rate of spend around 33% as you might remember we've also decentralized this trial around the world to make it more patient centric. So these patients now really don't.
Need to go into the clinic, except for their very first screening visit where they have their total table assessment. So we have been in effect taken the clinical trials of the patients' home.
With regard to the ITT analysis, we have completed our statistical analysis plan with share that with the FDA, we've come to an agreement with the FDA. So I won't comment on the specifics of that but we do have an SAP in place.
Thank you. Our next question comes from Joseph Stringer with Needham and company. Your line is now open.
Hi, everyone. Thanks for taking the questions that's kind of a quick one on the.
I think the J&J option here.
Is my understanding of it.
J&J has the option up to 90 days after the combined phase two.
Are you seeing in crowns.
So as that as debt.
But has anything changed out of it.
Crown just now late late 'twenty, one early 'twenty two it would it still be up the 90 days essentially after the phase II crowds readout.
Yes, the agree but it is not has not changed so that's.
We will our plans are to deliver the the data package on ulcerative colitis, obviously as soon as we can to <unk>.
Hansen.
And then also be in a position to deliver that Crohn's day to packages suite as we can so.
We had planned for those two data sets to come together and now it looks like theyre going to be separated.
But well will likely still deliver.
The the UC as soon as we can and then the Crohn's day to package as soon as we can that's a little bit of a little bit of a misnomer, but the.
In terms of delivery because the answer is extremely.
We're of exactly where we are with this program in fact has worked with us to.
To put together not only the designs of the studies, but but also the the analysis plan and the package so.
All of Us us.
The very transparent between the two companies they understand where we are and what our plans are with regard to delivery, but under the terms of the agreement. It's 90 days after the complete package, which includes crows that also required us.
Okay. Thanks for taking my question.
Yes, Rick did you want to add anything to that.
No nothing to add Rick.
Thank you. Our next question comes from Cristina <unk> with Bank of America. Your line is now open.
Hi, good afternoon. Thanks, so much for taking my question.
Is it net or any of your JAK inhibitor and have you had any interactions with the agency that would indicate any kind of heightened concern and that's been obviously because the agency does.
Has in recent months been increasing your queries around the safety of the JAK class in General just wanted to get your thoughts of any of your interactions with the <unk> changed and then secondly, as it relates to the.
Commercial.
The opportunity for you Pauli.
How much of the COVID-19 kind of clouding, what the true market opportunity could be here and when would you expect to see a recovery.
Yes.
Yeah, I'll take the I'll.
Take the.
The.
The.
COVID-19 in <unk>, and the and then kick it over to Rick to comment on the agency interactions.
We've had so.
I think Frank mentioned that the what.
Sort of two issues, one pulmonologists had been quite busy, particularly in specific parts of the country dealing with COVID-19, but they're one of our key target customers for your Perl right.
So there are access has been.
It's been a challenge however, we've still been able to add.
Formularies throughout the AD to formularies throughout the pandemic second point as Frank mentioned is that we have.
Because of COVID-19.
We've had.
Access had delays in the access into hospitals and offices for all of the right reasons of our own employee safety as well as our customers' safety.
We expect and in fact of seen that change already for both sales forces both of the intra sales force as well as the terror events Biopharma sales force through the through the months of March is as different geographies of opened up so I'll, let Frank add to that answer and then we'll go to Rick for for.
For the JAK inhibitor of discussions.
That's essentially it Rick I mean, you can see what happened to our business and is highly correlated to surges in infections in certain parts of the country.
Hospitals and institutions restricting access pulmonologists and other pulmonary health care providers being preoccupied appropriately with treating COVID-19 patients and as we've come out of that towards the back half of the first quarter, you've seen the business respond very positively we've seen that continue into the.
The into the month of April and some of the other things that I've I've.
I've mentioned with respect to measuring our investments re prioritizing those we know a lot more about our non personal promotion in our digital assets that we were we had to put in place. We now know that we have our sales force and be interested sales force back out.
Into the field and we know that our promotional effectiveness is much higher during in person customer visits so.
Hopefully.
The most of the pandemic effect is behind us and we're looking forward to.
Getting back in high gear as the year unfolds.
Okay, Frank Thanks for the clearance of quicker.
Clarify.
One of the reopening from accelerates should we expect to see us.
Deep uptake of <unk>.
The patients would you tolerate or would that be more gradual and just trying to figure out how much of this.
Is the limitation of directly from COVID-19 Christopher Doctor at the meeting for for P&C came from.
Yes.
Honestly I think that's a very good question and the company's besides Beatrice and <unk> Biopharma are really trying to figure out the extent of the answer to that question as I said, we're very encouraged by what we we've seen I will remind you we grew share through the pandemic.
And we're looking forward to executing flawlessly in the back half of this year.
Yeah.
So Rick you want to take the setting up of nasal setting the.
Yeah sure I'm happy to do that and we have not had any specific outreach from FTA or any health authorities related to island sitting of ore nozzle sitting there with regard to some of the emerging information on systemic JAK inhibitors and in fact.
Back in 2014, and this is exactly why we decided to develop the gut selective JAK inhibitor in the first place maximize efficacy minimize systemic immunosuppression. So this is there are a couple of slides from the tech that we included today slides 11, and 12 really the highlight that we have generated and published of compelling body of work.
So far the demonstrates the gut selectivity of Eisen said net.
Low dose efficacy in animal models are very high safety margins and toxicology studies low systemic exposure in healthy volunteers and patients with ulcerative colitis, no impact on lipids or other known JAK safety liabilities today, and low oral bioavailability of only 2% when we give an IV dose compared to an all day so.
At this point again, nothing specific from health authorities and were happy with the position we're in.
And we believe it's time to seize upon that opportunity to get the safer therapy to patients with IBD.
Okay. Thanks very much.
Thank you. Our next question comes from Geoffrey Porges with SBB Leerink. Your line is now open thank.
Thank you very much for letting me jump of them with another question I Couldnt, let the cologuard by without talking about zero of non tier three.
I hesitate to say that the lack of other questions is consistent with low expectations for the trial.
But could you remind us.
What what's really needed to show clinically meaningful effectiveness do you have to show a mortality benefit for a hospital day benefit I know the variety of endpoints, but what's kind of determine whether this is really an important breakthrough for trading the danske.
The other patients.
Sure Rick do you want to touch on that.
Yeah. So.
Such an evolving field over over the past 12, plus months, but but what has become pretty clear the endpoints around these trials are relatively standardized now so in part two of our phase II study. The primary endpoint is pretty simple, it's the number of respiratory free days from randomization through day 28.
So respiratory this us respiratory failure free days and that's defined as of day that the subject is alive and not requiring the use of invasive mechanical ventilation noninvasive positive pressure ventilation, our high flow oxygen device, so relatively straightforward endpoint.
Obviously, Jeff I mean, the mortality is the mortality.
Mortality is important but I think.
And I think the the agencies.
Around the world are looking at mortality.
As well, but there are also at the.
More data that comes out clearly morbidity of the morbidity due to this disease is going taking the ever more.
The important.
Sort of segment of thought and I think that's what one of the aspects of my day.
The three that we're quite excited about us theres not simply having an effect on mortality, but being able to have an effect on the morbidity of the disease by some of the data that the Rick actually presented.
On the slides today.
Okay. Thank you very much.
Thank you.
We have no further questions on the phone I'd now like to turn the conference back over to Mr. Winningham. Please go ahead Sir.
Thanks, everyone for joining us today.
Got a very exciting the remainder of 2021.
In front of the company, we look forward to executing and bring you up to date on the exciting events that we have in store for the rest of the year. Thanks for your time.
This concludes today's conference call. We thank you for your participation you may now disconnect.
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