Q2 2021 Kiniksa Pharmaceuticals Ltd Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to the Knessa Pharmaceutical Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by and welcome to the connects the Pharmaceuticals second quarter 2021 financial results conference call. At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. At that time, if you have a question, you will need to press star 1 on your telephone. If anyone should require assistance during the conference, please press star 0. I would now like to hand the conference over. To your host, Rachel Frank, please go ahead.

At that time, if you have a question you will need to press star 1 on your telephone keypad.

Any why shouldn't require assistance during the conference. Please press Star Zero I would now like the hand the conference over to your host Rachel Frank. Please go ahead.

Rachel Frank: Thank you, operator. Good morning, and thank you for joining Kinnicksa's call to discuss our second quarter 2021 financial results and our recent corporate and pipeline activities. A press release highlighting these results can be found on our website under the Investors and Media Section. As for the agenda, our CEO, Sange K Patel, will start with an introduction.

Thank you operator, good morning, and thank you for joining Codexis call to discuss our second quarter 2021 financial results and our recent corporate and pipeline of activity the.

The press release, highlighting these results can be found on our website under the investors and media section.

As for the agenda, our CEO John case, the count we will start with the introduction Ross note our head of commercial will detail our commercial launch John Paolini connected Chief Medical Officer will follow with the brief pipeline update including a review of additional data from our Maverick on in that phase 2 clinical trial in COVID-19 related.

Rachel Frank: Ross Mote, our head of commercials, will detail our commercial launch. John Pauolini, Connects as chief medical officer, will follow with a brief pipeline update, including a review of additional data from our maverlimamap phase two clinical trial in COVID-19-related ARVS. Mark Rogoza, our chief financial officer, will review our second quarter 2021 financial results. And finally, Sange will return for closing remarks and to kick off the Q&A sessions, during which Evan Tesari, our chief business officer, will also be on the line.

The <unk> marker goes on our Chief Financial Officer will review, our second quarter 2021 financial results and finally signs will return for closing remarks and to kick off the Q&A session of which <unk>, our chief business Officer will also be on the line.

Rachel Frank: Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide, as well as under the caption, risk factors affecting our SEC 5.

Before getting started please note that we will be making forward looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements a review of such statements and risk factors can be found on this slide as well as under the caption risk factors contained in our SEC filings.

Sanj K. Patel: These statements speak only as of the date of this presentation, and we undertake no obligation to update such statements except as required by law. Thanks, Rachel, and good morning, everyone. I'm incredibly excited to have the opportunity to discuss our second quarter 2021 results today, which include the first quarter of Arkley sales in recurrent pericarditis. We are very encouraged by our initial launch progress, and that is a direct result of focused execution by the Kynixir team. I'm excited to report that net revenue for Arklist for the second quarter of 2021 was $7.7 million.

Statements speak only as of the date of this presentation on the undertakes no obligations to update such statements, except as required by law with that I will turn it over to <unk>.

Thanks, Rachel and good morning, everyone I'm incredibly excited to have the opportunity to discuss our second quarter 'twenty 'twenty..1 results today, which include the first quarter of <unk> sales in recurrent pericarditis.

We are very encouraged by our initial launch progress and that is a direct result of focused execution by the connects the team.

I am excited to report the net revenue Buraq list for the second quarter of 2021 was $7.7 million.

Sanj K. Patel: While we are still in the early stages of the launch, the team continues to execute extremely well. The pre-launch work that they did to identify the patient population provided a clear call to action for physicians. And the team continues to identify patients and expand upon the prescribing base. All these efforts have facilitated the encouraging uptake that we've seen to date and position us for continued growth in the coming quarters and years.

While we are still in the early stages of the launch the team continues to execute extremely well the.

Pre launch work that they've done to identify the patient population provided a clear call to action for physicians to prescribe it.

On the team continues to identify patients and expand upon the prescribing base.

All of these efforts of facilitated the encouraging uptake that we've seen to date and positions us for continued growth in the coming quarters and years.

Sanj K. Patel: Ross will cover our commercial performance in a bit more detail, and as you'll hear, we are very pleased with the breadth of physician and patient adoption, as well as the viable reimbursement condition ahead of payers establishing coverage policies. Aside from our Clist, we're also focused on building maximum value across our entire portfolio.

Ross will cover our commercial performance in a bit more detail and as you'll hear we are very pleased with the breadth of physician and patient adoption as well as the viable reimbursement condition ahead of payers establishing coverage policy.

Aside from Ark list. We're also focused on building maximum value across our entire portfolio.

Sanj K. Patel: Over the last few months, we've continued to execute across our pipeline of clinical stage product candidates. In particular, in the past quarter, we were pleased to announce positive results for Mavlimamab in the Phase 2 trial in severe COVID-19 related ARDS, as well as positive final data from the Phase 1 trial of KPL 404, which is our CD40 program. John Paolini will provide a more detailed update on recent pipeline progress, but in essence, we believe we are well positioned for longer-term growth with Arkelis. And our pipeline assets, Mavillinam, Vixilomab, and KPL404, will also aid our growth. I'll now turn it over to Ross to discuss our commercial performance in more detail. Over to you, Ross.

Over the last few months, we've continued to execute across our pipeline of clinical stage product candidates.

In particular in the past quarter, we were pleased to announce positive results. The marvell in the map in the phase II trial in severe COVID-19 related <unk> as well as positive final data from the phase 1 trial of <unk> 4 of 4 which is our CD 40 program.

John Paolini, who will provide a more detailed update on the recent pipeline progress in S.

Since we believe we are well positioned for longer term growth with all quest on.

On a pipeline of assets Marvell in the Mab VIX of oil in KPN for a full but also ADR growth.

I'll now turn it over to Ross to discuss our commercial performance in more detail both of you Ross.

Ross Moat: Thank you, Sach, and good morning. We were thrilled to have launched Arkelist in Recuron Pericarditis in quarter two of 2021, marking a revolution for Kinica becoming a commercial stage company as well as establishing the third indication for Arkelist and underscoring the utility of this interleukin-1 alpha and beta mechanism in auto-inflammatory disease. We successfully assembled the team, readied the organization, and launched rapidly at the beginning of Q2, knowing that patients were in need of Archlist, and with Arklist, the first and only FDA-approved drug in recurrent peritade. We're delighted to share that our launch quarter ended in superb shape with a Q2 net revenue of $7.7 million.

Yeah.

Thank you Pat and good morning.

We were thrilled to have launched <unk> and recurrent pericarditis and quarter 2 of 2021 Malkin of revolution, but connects of becoming a commercial stage company as well as establishing the third indication the optimist and underscore the utility of this interleukin, 1 alpha and beta mechanism and <unk>.

Also of inflammatory diseases we.

We successfully assembled the team ready the organization and launched rapidly at the beginning of Q2 now in the patients who are in need of Barclays and with all of this is the first and only FDA approved drug and become part of it got Isis.

We are delighted to share the our launch quarter ended and superb shape with of Q2 net revenue of $7.7 million.

Ross Moat: The sources of revenue were relatively evenly split between recurrent pericaditis, the legacy caps and deerer indications, and the initial channel inventory built to supply all indications. We have seen a very strong start with recurrent pericaditis and are pleased that revenue has already caught up with and slightly surpassed the revenue of the legacy indication. This result was driven by a steady flow of new patients to Archelisk, as well as converting patients from the Rhapsody trial to commercial therapy.

The sources of revenue relatively evenly split between recurrent pericarditis, the legacy caps and Dara indications on the initial channel inventory build to supply all indications.

We have seen of very strong staff in recurrent pericarditis on I am pleased that revenue is already cohorts up ways and slightly support the revenue of the legacy indications.

This result was driven by a steady flow of new to <unk> patients as well as converting patients from the Rhapsody trial to commercial therapy.

Ross Moat: For the indications of Caps and Deera, I'm pleased to confirm that whilst there was some regenerant drug in the channel in the early week, those patients successfully transitioned to commercial Kinnixir supply throughout the quarter, and they now receive the full support from Kynixir 1 Connect, our patient services program. We ended the quarter with approximately $2.5 million of revenue from inventory revenue at the specialty pharmacy. This volume represents the one-off build in the launch quarter, which was required to meet the legacy caps and dearer demand, as well as keep up with the new growth from Recurran Pericat.

For the indications of caps and data I'm pleased to confirm the most of that was some regeneron drug in the channel in the early weeks the.

Those patients successfully transitioned to commercial connects the supply throughout the quarter and then now received the full support from connect zone, 1 connect a patient services program.

We ended the quarter with approximately $2.5 million of revenue of inventory revenue on the specialty pharmacies. This volume represents the 1 off payout in the launch quarter, which was required to meet the legacy caps and dammit demand as well as keeping up with the new growth can become pericarditis.

Yes.

Ross Moat: Following this strong launch quarter result, we would like to provide a forward look at Q3 revenue. Now that the conversion is complete in Caps and Deera, we believe this revenue is likely to remain stable moving forward. We do not expect the inventory bill to repeat in Q3.

Following the strong launch quarter resolved, we would like to provide a forward look to Q3 revenue.

Now that the conversion is complete and caps and deliver we believe this revenue is likely to remain stable moving forward we.

We do not expect the inventory build to repeat in Q3, whilst patient demand will increase the weeks on hand, and our specialty pharmacy network is likely to decrease from current levels is all pharmacies gets the better handle on the growth trajectory.

Ross Moat: Whilst patient demand will increase, the weeks on hand in our specialty pharmacy network are likely to decrease from current levels as our pharmacies get a better handle on the growth trajectory. Hence, we're likely to see zero or very marginal inventory. Therefore, recurrent pericarditis will be the major growth driver for Archelist in Q3. We expect that recurrent pericaditis demand will deliver a greater than two-fold increase from Q2 to Q3, and that this will more than account for the one-off inventory build that we saw in Q2. We expect that this growth will drive our total arcless revenue to between $9 to $10 million in QC.

Hence, we're likely to see zero or very marginal inventory price.

Therefore, we current pericarditis will be the major growth driver for <unk> in Q3, we expect the recurrent pericarditis demand will deliver greater than 2 fold increase from Q2 to Q3 and the this will more than accounts for the 1 off inventory build we saw in Q2.

We expect this growth will drive our total <unk> revenue to between $9 million to $10 million in Q3.

Yeah.

Ross Moat: On slide 9, I will dive into more detail on the drivers of the strong recurrent pericarditis performed. We're thrilled with the initial prescription volume we saw in Q2. This was delivered from both the Rhapsody clinical trial sites and much wider at practices without prior clinical experience. At the close of Q2, clinical trial sites accounted for around 35% of the total recurrent pericarditis prescriptions, showing continued prescribing in the commercial setting by those physicians who have substantial trials.

On slide 9 I will dive into more detail on the drivers of the strong we come of pericarditis performance.

We are thrilled with the initial prescription volume we saw in Q2. This was delivered from both the Rhapsody clinical trial sites and much boarder of practices without the prior clinical experience.

On the close of Q2 clinical trial sites accounted for around 35% of the total recurrent pericarditis prescriptions showing continued prescribing in the commercial setting by those physicians who have substantial trial experience.

Ross Moat: This also means that around 65% of the total prescribing came from physicians practicing outside of the 12 clinical trials, highlighting early, broad adoption and a willingness from physicians to prescribe and treat patients for the first time. At an individual prescriber level, we saw greater than 100 physicians who did not participate in the Rhapsody prescribe Archelist to at least one recurrence pneumonia patient.

This also means the around 65% of the total prescribing came from physicians practice in outside of the 12 clinical trials sites, highlighting an early broad adoption and a willingness from physicians to prescribe and treat patients for the first time.

That's an individual prescriber level, we saw greater than 100 physicians, who did not participate in the of Obsity describe arc list to at least 1 recurrent pericarditis patients. This highlights a very promising breadth of prescribing base straight out of the gates.

Ross Moat: This highlights a very promising breadth of prescribing base straight out of the gate. However, to ensure strong uptake into the 14,000 target patient population, we also need a depth of prescribers. Currently, a small but growing percentage of those prescribers have started to prescribe Archelist for multiple patients, and we expect this steady growth to continue. In addition to the new to therapy patients, a driver of Q2 demand has been the conversion of patients from the Rhapsody tribe.

To ensure strong uptake into the 14000 target patient population.

We also need of depth of prescribing currently.

Our small but growing percentage of those prescribers have started to prescribe <unk> for multiple patients and we expect the steady growth to continue.

In addition to the new to therapy patients of driver of Q2 demand has been the conversion of patients from the Rhapsody trial.

Ross Moat: At the time of FDA approval, the long-term extension portion of our Phase 3 study came to an end in the US. The sites have now completed the end of treatment visits, and the patients had the opportunity to continue therapy in the commercial setting. Greater than 70% of these patients decided to continue therapy and have since initiated on commercial drugs, indicating satisfaction with therapy. On the payer side, we believe that early payer engagement prior to launch, which quickly ramped up in the early launch phase, has facilitated great access for patients under the medical exceptions process.

At the time of FDA approval of the long term extension portion of a phase III study came to an end in the U S. The science of now completed the end of treatment visits and the patients had the opportunity to continue therapy in the commercial setting and greater than 70% of these patients decided to continue Sir.

IP kind of since initiated onto commercial drug indicating satisfaction on therapy.

On the payer side, we believe the early part of engagement prior to launch which quickly ramped up in the early launch phase is facilitated greater access for patients under the medical exceptions processes.

Ross Moat: Currently, of the completed cases with a final payer decision, we've seen a greater than 90% approval rate, demonstrating positive early access for patients to initiate our program, and we continue to expect that the majority of payers will publish their arcless policies within six months. Additionally, while still too early to provide any meaningful updates on patient compliance and duration, we've started to see patients receive their initial refills on time and continue to expect compliance levels to be similar Turning to slide 10, I want to highlight some of the work that contributed to this excellent first launch quarter and how it sets the foundation for supply.

Currently of the completed cases with the final payer decision, we've seen a greater the 90% approval rate demonstrating positive early access for patients to initiate talk list and we continue to expect the majority of payers will publish the off lease policies within 6 months of launch.

Additionally, while it's still too early to provide any meaningful updates on patient compliance and duration. We've started to see patients received the initial refill is on time and continue to expect compliance levels to be similar to that of other comparable self injectables.

Turning to slide 10, I want to highlight some of the work the contributed to this excellent first launch quarter and how it sets the foundation for subsequent quarters.

Ross Moat: We're thrilled to have our experienced cardiovascular sales team in the future. They are highly targeted based on our pre-launch market's understanding of the institutions and the doctors seeing the highest throughput of recovery pericaditis patients. We previously outlined that we would start by being hyper-focused on around 45% of the recurrent pericaditis patients in the US at around 350 accounts before penetrating further to the 70% of patients concentrated at around 800. The field team has executed well on the launch plan and have met with over 70% of the initial targeted patients. The team is focused and diligent, and our robust clinical data enables them to have a clear call to action on exactly who and We are also pleased with the access the team has achieved, which indicates the willingness of physicians to engage with Recurran Pericada. Additionally, nearly 80% of all of our calls were conducted face to face.

With the way I want to have our experienced cardiovascular sales team in the field. They are highly targeted based on our prelaunch markets understanding of the institutions on the Doctor has seen the highest throughput of becoming pericarditis patients.

We previously outlined that we would stop by being hyper focused on around 45% of the recurrent pericarditis patients in the U S. It's around 350 accounts before penetrating further so the 70 percentage of patients concentrates at around 800 practices.

The field team of executed well on the launch plan and have met with over 70% of the initial targets accounts. The team are focused and diligent and all of a bust clinical data and enables them to have a clear call to action on exactly who and when to prescribe all finished.

While the COVID-19 pandemic has limited some in person sales interactions. The team has remained incredibly productive and focused utilizing our digital marketing assets.

We're also pleased with the access the team has achieved which indicates the willingness of physicians to engage on become of pericarditis.

Additionally, nearly 80% of all of our coals will conducted face to face and the states and institution start to reopen further we're looking forward to progressing even more with autologous accounts.

Ross Moat: And as states and institutions start to reopen further, we're looking forward to progressing even more with our target. To supplement the field team's efforts, we also held multiple patient and physician, local, and national webinars and speakers. These have been very well received and created awareness and education further than the field team alone would have been able to achieve. Additionally, we're very proud to continue to support the patient advocacy community, which includes patient support groups across all the approved indicators.

To supplement the field team's efforts, we also held multiple patient and physician local and national Webinars and speak of events the.

Use of being very well received and created awareness and education further than the 2 of the field team alone would have been able to achieve additionally.

Additionally, we're very proud to continue to support the patient advocacy community, which includes patient support groups across all of the approved indications.

Yeah.

Ross Moat: As I've mentioned previously, Kynixa One Connect, our patient support program, continues to be crucial to optimizing the experience with Archlist and Kynix. This service provides personalized one-to-one support for every Arklist patient through every step of treatment. The Kinnixa Patient Access Leads serve as the primary point of contact for healthcare providers and patients to help with determining insurance coverage, assisting with prior authorization and any appeals when required, providing injection training during the patient's initiation, and providing financial assistance that aims to ensure patient affordability for eligible patients.

As I've mentioned previously connects the 1 connects our patient support program continues to be crucial to optimizing the experience with <unk> and connects them.

This.

Provides personalized 1 to 1 supports for every off lease patients through every step of the treatment journey the.

<unk> patient access leads serve as the primary point of contact the health care providers and patients to help with determining insurance coverage and assist in the prior authorization and any appeals when required for <unk>.

<unk> injection training during the patients initiation and providing financial assistance the aims to ensure patient affordability the eligible patients.

Ross Moat: And before the call to John, I'd like to say that, having led many launches, I'm very proud of the dedicated and diligent Kynixir team, and I'm humbled by the patients that we've been working with. We are delighted and encouraged by the first launch quarter. This launch stage is about setting the commercial wheels in motion and laying the foundations for continued success in the coming years. We're just getting started, and we look forward to supporting more patients on their journey. John, it's over to you. Thank you, Ross.

Before handing the call to John I'd like to say, having led many launches I'm very proud of the dedicated and diligent connects the team and I'm humbled by the patients that we've interacted with it.

We are delighted and encouraged by the first launch quarter results.

This launch stage is about setting the commercial wheels in motion and laying the foundation for continued success in the coming quarters.

We're just getting started and we look forward to supporting more patients on their journey with analyst.

John over to you.

Thank you Ross and good morning, everyone.

John F. Paolini: And good morning, everyone. I will provide a brief overview of where we stand with our three clinical stage program. We are encouraged by the potential broad utility of maverliminab, which has demonstrated positive clinical data across multiple indications, including COVID-19 related ARDS and giant cell arthritis. Our recent interactions with the FDA resulted in defined paths for phase three development of maverlimamab in these diseases with significant unmet need.

I will provide a brief overview on where we shared with our 3 clinical stage programs. We are encouraged by the potential broad utility of macro 1 of the App, which.

Which has demonstrated positive clinical data across multiple indications, including COVID-19 related Rds and giant cell arteritis. Our recent interactions with the FDA resulted in defined paths for phase III development of mass of aluminum out the needs diseases with significant unmet need.

John F. Paolini: Currently, we're focused on completing our phase three trial of maverliminab in COVID-19 related ARDS and generating data in the first quarter of 2022. For Vixiralimab, last year, we reported that our Phase 2A study in Paragonodularis achieved its primary efficacy endpoint with a statistically significant 50.6% reduction in weekly average Worsuch NRS from baseline at week 8. There was also a disease benefit shown.

Currently we're focused on completing our phase III trial of matter for women of AB and COVID-19 related to the already yes, and generating data in the first quarter of 2022.

On fixed the role of Mab last year, we reported that our phase Iia study in Prurigo <unk> achieved its primary efficacy endpoint with a statistically significant 56% reduction in weekly average worst itch on our rest from baseline at week 8.

There was also a disease benefits shown on.

John F. Paolini: Almost a third of Vixerellamad recipients achieved a Paragonodularis Investigator's Global Assessment, or PNIGA score, of zero or one, which is clear or almost clear at week eight compared to only 7.7% of placebo recipients. Moving forward, building on those data, we are currently enrolling a global, randomized, placebo-controlled phase 2b dose ranging trial in Paragonodularis testing three different once-month The primary efficacy endpoint is change in Worstitch NRS score at week 16.

Almost a third of VIX of all of them out of the recipients achieved a per I go nausea, Larish investigator's global assessment or P. On Iga score of.

Zero, or 1 which is clear or almost clear at week 8 compared to only 7.7% of placebo recipients.

Moving forward building on those data we are currently enrolling a global randomized placebo controlled phase <unk> dose ranging trial in Prurigo nodular is testing 3 different once monthly dose regiments. The primary efficacy endpoint is change in worst itch on our S. At week 16.

John F. Paolini: Finally, for KPL 404, in May of this year, we announced final data from our phase one trial in healthy volunteers, showing not only that KPL404 was well tolerated with dose-related pharmacokinetics, but also that target engagement and pharmacodynamic data were supportive of further development in patients, with optionality for chronic subcutaneous as well as intravenous administration. We plan to initiate a Phase 2 proof of concept trial in the fourth quarter of 20 This 12-week trial in rheumatoid arthritis patients is designed to provide not only pharmacokinetic characterization and early signal of efficacy with chronic administration in a well-described patient population, but also optionality to evaluate the therapeutic potential of KPL 404 across a range of autoimmune diseases with pathologies believed to be mediated by CD40 signals.

Finally for K P O 4 O 4 in May of this year, we announced final data from our phase 1 trial in healthy volunteers showing not only the QTL 4 O 4 was well tolerated, which dose related pharmacokinetics, but also the target engagement and Pharmacodynamic data were supportive of further development in <unk>.

<unk> with Optionality for chronic subcutaneous as well as intravenous administration.

We plan to initiate a phase 2 proof of concept trial in the fourth quarter of 2021.

This 12 week trial in rheumatoid arthritis patients is designed to provide not only pharmacokinetic characterization and early signal of efficacy of chronic administration in a well described patient population.

But also optionality to evaluate the therapeutic potential of <unk> 4 of 4 across a range of autoimmune diseases with pathologies believed to be mediated by <unk> 40 signal.

Okay.

On slide 14.

John F. Paolini: I want to return to maverliminab for a moment to highlight some new data that we announced today from the phase two portion of the phase two three trial of maverliminab in patients with severe COVID-19 pneumonia. For context, you will recall that in April, we reported data from the phase two portion of the study showing that at day 29, Mavralimab reduced the risk of mechanical ventilation or death by 65% in hospitalized non-mechanically ventilated patients versus placebo. Here are the data for overall survival in the same non-mechanically ventilated cohort of patients now carried out to day 90.

I want to return to not for women of that for a moment to highlight some new data that we announced today from the phase 2 portion of the phase 2.3 trial of novel women of out of in patients with severe COVID-19, the ammonia.

For context, you will remember that in April we reported data from the phase 2 portion of the study showing that at day 29, now for Illumina have reduced the risk of mechanical ventilation or death by 65% and hospitalized non mechanically ventilated patients versus placebo.

Shown here are the data for overall survival in the same non mechanically penalty the cohort of patients now turned out to day 90.

John F. Paolini: The results demonstrate persistence of the substantial mortality reduction over time, thus confirming and extending the previously reported day 29 data. This prolonged outcomes effect is also consistent with the prolonged pharmacokinetics of the single administration of maverliminab, which had been given on day one, in the phase two cohort of mechanically ventilated patients, not shown here on this slide. The data did not show a reduction in mortality at day 29, due in part to the competing complications of mechanical ventilation.

The results demonstrate persistence of the substantial mortality reduction over time, thus confirming and extending the previously reported day 29 data.

This prolonged outcomes effect is also consistent with the prolonged pharmacokinetics of the single administration of math of women out which had been given on day 1.

In the phase 2 cohort of mechanically ventilated patients not shown here on the slide the data did not show a reduction in mortality at day 29 due in parts of the competing complications for mechanical ventilation.

John F. Paolini: Kinnixa has discontinued enrollment in the mechanically ventilated cohort in the phase three trial, and we are focusing our resources on non-mechanically ventilated patients, given that the recent cohort one data demonstrate that this is the group most likely to benefit from upstream blockade of the maladaptive and fricatory cascade triggered by COVID-19. Based on the phase two data, Kynixa, in consultation with the FDA, has expanded the sample size of the phase three portion of the trial to enroll approximately 600 non-mechanically venalistic patients in total.

<unk> has just continued enrollment in the mechanically ventilated cohort in the phase III trial, and we are focusing our resources on non mechanically ventilated patients given that the recent cohort 1 data demonstrate that this is the group most likely the benefit from upstream blockade of the Val adopter of inflammatory cask.

Triggered by COVID-19.

Based on the phase 2 data connections and consultation with the FDA has expanded the sample size of the phase III portion of the trial to enroll approximately 600 non mechanically but on only 2 patients in total the <unk>.

John F. Paolini: The primary efficacy endpoint remains the proportion of patients alive and free of mechanical ventilation at day 29. The trial is approximately 75% enrolled, and data are expected in the first quarter of 2022. One final note on the data. We and others have observed the emergence of variants that are allowing the virus to potentially evade the protective effects of some vaccines and virus neutralizing antibody cocktails.

Primary efficacy endpoint remains as the proportion of patients alive and free of mechanical ventilation at day 29.

The trial is approximately over 75% of volt and data are expected in the first quarter of charging too much of too.

1 final note on the data.

We and others have observed the emergence of variants that are allowing the virus to potentially made the protective effects of some vaccines and virus neutralizing antibody cocktails.

Mark Ragosa: Pinixir believes the way maverlimamab blocks the body's counterproductive inflammatory reaction is agnostic to coronavirus variance. I'll now turn the call over to Mark to review our financial results. Thank you. Thanks, John. Good morning, everyone.

<unk> believes the weighted matter for a limit of our blocks the body's counterproductive inflammatory reaction is agnostic to coronavirus.

I'll now turn the call over to Marc to review our financial results. Thank you.

Thanks, John Good morning, everyone today.

Mark Ragosa: Today I'm going to walk through our financial performance for the second quarter of 2021 and review our guidance. You can find our detailed financial information in today's press release, and I'd like to call your attention to a few items. First, ARCLAIS revenue is recognized upon sale to our distribution network of specialty pharmacies.

Today, I'm going to walk through our financial performance for the second quarter of 2021 and review our guidance you can find our detailed financial information in today's press release and I'd like to call your attention to a few items.

First arcalis revenue is recognized upon sale to our distribution network of specialty pharmacies.

Mark Ragosa: And in the second quarter, revenue was $7.7 million, driven primarily by the commercial launch of Archelisk and recurrent paracaditis, as well as continued legacy cap sales and Darra sales upon transition to Kynixia inventory during the quarter. Second, based upon the strong uptake and recurrent paragraditis, driven by patient demand, broad physician adoption, and a notable medical exception approval rate, we expect total third-quarter 2021 arcless net revenue of between 9 million and 10 million, assuming stable caps in dearer revenue and minimal, if any, revenue contribution from inventory changes.

And in the second quarter revenue was $7.7 million driven primarily by the commercial launch of arc list in recurrent pericarditis as well as continued legacy caps and Dara D Euro sales upon transition to connect the inventory during the quarter.

Second based upon the strong uptake in recurrent pericarditis driven by the patient demand broad physician adoption and of notable medical exception approval rate. We expect total third quarter of 2021, harkless net revenue of between $9 million and $10 million.

Assuming stable caps enduro revenue and minimal if any revenue contribution from inventory changes, we believe recurrent pericarditis sales in the third quarter could represent a greater than 2 fold increase over second quarter recurrent pericarditis sales.

Mark Ragosa: We believe recurrent pericotitis sales in the third quarter could represent a greater than twofold increase over second quarter recurrent pericarditis sales. Given the variables that remain at this early stage of launch, such as continued physician adoption, patient compliance, duration of therapy, and final payer coverage policies, we are not providing longer-term ARCless revenue guidance at, Third, as a reminder, with the FDA approval of ARCLIS for recurrent paracoditis, we are responsible for the sales and distribution of all approved indications in the U.S., including Caps and Dira, and evenly split profits on sales with regenerative.

Given the variables that remain at this early stage of launch such as continued physician adoption patient.

Patient compliance duration of therapy and final payer coverage policies, we are not providing longer term arcalis revenue guidance at this point.

Third as a reminder, with the FDA approval of arc list for recurrent pericarditis, we are responsible for the sales and distribution of all approved indications in the U S, including caps into Europe, and evenly split profits on sales with regeneron.

Mark Ragosa: When profitable, collaboration profit sharing will be reflected as a separate line item within our operating. In the second quarter of 2021, we do not make any collaboration profit sharing. Lastly, our net loss for the second quarter of 2021 was 41.6 million compared to 37.5 million for the same period last year.

When profitable collaboration profit sharing will be reflected as a separate line item within our operating expenses and.

In the second quarter of 2021, we do not make a collaboration profit sharing payment.

Lastly, net loss for the second quarter of 2021 was $41.6 million compared to $37.5 million for the same period last year.

Sanj K. Patel: And we ended the second quarter of 2021 with cash reserves of approximately $226 million, which we continue to expect to fund our operating plan into 2025. As you've heard from the team, we are executing on our ARCLA commercial strategy, and combined with the continued advancement of our clinical stage assets, MAVRI, VIX, and KPL 404, we are well positioned to continue to help patients and to drive future growth. And with that, I'll turn the call back to Sange for her closing remarks. Thanks, Mark.

And we ended the second quarter of 2021 with cash reserves of approximately $226 million, which we continue to expect to fund our operating plan into 2023.

As you've heard from the team we are executing on our Arcalis commercial strategy. The combined with the continued advancement of our clinical stage assets Maverick Victor and keep you all 4 of core we are well positioned to continue to help patients and to drive future growth.

And with that I'll turn the call back to <unk> for closing remarks.

Thanks, Marc we are very focused on building the maximum value across our portfolio on building a company directly positively impact the lives of patients.

Sanj K. Patel: At Kinxper, we are very focused on building the maximum value across our portfolio and building a company that directly and positively impacts the lives of patients. And the fact that we have multiple programs gives us a tremendous amount of optionality to allocate capital relative to our opportunities. It's clearly a very exciting time for Kynica.

And the fact that we have multiple programs gives us tremendous amount of optionality to allocate capital relative to other opportunities.

It's clearly a very exciting time for <unk>, we're off to a jolly strong start with the launch of <unk> in recurrent pericarditis the pud.

Sanj K. Patel: We're off to a jolly, strong start with the launch of Archlist in Recurrent Paracaditis. The positive feedback we continue to receive from physicians and patients validates the unmet need for patients with recurrent paracarditis. And with this launch, we have started as we mean to go on. And, as I mentioned previously, we continue to be energized by our progress across our entire portfolio. And we believe that we're well positioned to execute throughout this year and beyond, and we are encouraged by the broad utility of mavelinamab seen today in GCA and COVID, VIX, and Pryga Nogelaris, and KPL's 404's potential in a range of autoimmune diseases.

Of the feedback we continue to receive from physicians and patients validates the unmet need for patients with recurrent pericarditis and with this launch we started as we mean to go on and.

And as I mentioned previously we continue to be energized by our progress across our entire portfolio.

And we believe that we're well positioned to execute out throughout this year and beyond.

We're encouraged by the broad utility of Marvell and <unk> seen to date in GTA and Covid.

Victor and protecting the giraffes and KPMG for force potential in a range of autoimmune diseases.

Sanj K. Patel: Importantly, as Mark said, we're well capitalized, and we have cash reserves that are expected to fund our current operating plan into 2023. So with that, thanks very much, thanks for joining the call, and I'll turn it back over to the operator for Q&A. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound or hash key.

Importantly, as Mark said, we're well capitalized and we of cash reserves are expected to fund our current operating plan into 2023.

So with that thanks, very much sense of joined the call and I'll turn it back over to the operator for Q&A.

As a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster. Your first question comes from the line of Nupam Rama with J.P. Morgan. Your line is open. Hey guys, thanks so much for taking the questions and congratulations on the quarter. Just a quick one from me.

Your first question comes from the line of <unk>.

<unk> Rama with J P. Morgan your line is open.

Hey, guys. Thanks, so much for taking the question and congrats on the quarter.

Just a quick 1 for me.

Anupam Rama: Of the 100-plus physicians who prescribe Archelisk that were not in phase three, were these physicians largely from the academic setting or community setting, or was it a mix? And the doubling of growth that you're expecting in recurrent pericarditis going from 2Q to 3Q, does that assume scripts from existing prescribers, or does it assume new prescribers as well? Thanks so much. Ross, do you want to take this? Yeah, I'm very happy too, Sanch. Hi Anand, thanks very much for the question.

Of the 100, plus physicians, who prescribe arcalis that we're not in the phase III. What are these positions largely from the academic setting or community setting or wasn't of mix and the doubling of growth that youre expecting.

Recurrent pericarditis going from <unk> to <unk> does that assume scripts from existing prescribers or or does it assume.

New prescribers as well thanks, so much.

Russ do you want to take that.

Very happy to just on Cheyenne.

Thanks, very much of it for the question.

Ross Moat: So maybe to your first point, whether it's from academic or other centers, I think really the answer is that it is a mixed approach that we've seen. We were delighted to see the continued uptake amongst those centers that have trial experience and the really broad experience that we started to see since launch outside of that. Our focused, targeted strategy is really, you know, based on market research and claims data where we see the highest throughput of recurrent pericarditis, and that's really agnostic to whether they're, you know, an academic center or otherwise.

So it may be true Youll first points, whether it's from academic all other centers I think really of the answer is that it is a mixed approach that we've seen the.

Delighted to see the continued uptake in amongst the census, the half trial experience on the really broad experience that when we started to see since launch outside of the badge.

I'll focus the targeted strategy is really based from market research and claims data of why we see the highest throughput of recurrent pericarditis and thats really agnostic to whether they are on.

Academic center at all of otherwise so.

Ross Moat: So, you know, we're very focused on those 350 target accounts and happy to see a really broad prescribing base come out of that. And then, maybe to your point, around the next quarter, whether it's existing or new prescribers, again, we expect to see a mixture. We have more than 100 prescribers, as we said, outside of the VASTIs now as well. We expect that to continue to grow in terms of breadth but also hope to start to make some more penetration into the depth of prescribing as well. And I mentioned in the presentation that we've started to see, you know, a small but growing number of physicians repeat prescribing, and we think that's a steady increase.

We're very focused on that 350.

Targets accounts and I'm happy to say, a very broad prescriber base come out of thoughts.

And then maybe to your point around the next quarter of whether it's existing on new prescribers of <unk> again, we expect to see a mixture of we have more than 100 prescribers as we said outside of the of Obsity.

Now as well, where you expect that to continue to grow in terms of of the breadth the OCI.

Oh, sorry.

To start to make some more penetration into the depth of prescribing as well on and I mentioned in the the.

The presentation that we started to see.

Our small but growing number of physicians with people Scribing and we think the steady increase we'll continue as we move forward.

Unknown Attendee: Thanks so much for taking our questions.

Thanks, so much for taking our question.

Paul Choi: Your next question comes from the line of Paul Choi with Goldman Sachs. Your line is open. Good morning. This is Corin Jenkins on behalf of Paul. Can you just talk about how that set of 100 works?

10 of them.

Your next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Good morning. This is Corinne Jenkins on for Paul can you just talk about.

Paul Choi: Can you just talk about how that set of 100 physicians compares to the initial target of accounts you had identified, are these mostly from those targeted accounts, and how the pace compares to what you expected?

How that side of the 100 physicians compares to the initial target of accounts. You had identified are these mostly from the start of the accounts and how does the pace compare to what you expected.

Ross Moat: Yeah, so this is Ross again. I'm happy to answer that. Thank you for the question. So, yeah, as we said, we're pleased with the 100 prescribers. You know, many of those come from within the target accounts that we set out and have really focused on. But also, you know, whilst the field team is very heavily focused on those 350 accounts, we've also been busy on the digital marketing side and also through webinars and speaker meetings and other means as well, but I'm making sure that we get a greater breadth of coverage to increase awareness.

Yes. This is Ross again happy to answer that thank you for the question. So yes, as we said.

Pleased with the 100 prescribers many of those come from within the targets accounts that we that we set out and of really focused on but it will say, what's the field team of very heavily focused on those 350 accounts. We've also been busy on the digital marketing side, and also sort of webinars and speak of meetings and other means as well on making sure.

The way, we get to a greater breadth of coverage to increase the awareness of the disease on the Balkan list as well so that along with I think the patients of mobilized.

Ross Moat: of the disease and of Arkelist as well. So that, along with, I think, you know, patients that have mobilized and gone to their physicians, so I want to hear about Arklists as well, has all kind of helped impact on the uptake, got on in the first quarter. It's helpful. And then can you just talk about any impact from the Delta variant on the pace of enrollment in the phase three study for COVID related arts? John, do you want to take that?

So that physicians once they hear about our place as well as all kind of helped an impact on the on the uptake.

On how we got started in the first quarter.

That's helpful. And then can you just talk about any impact from the Delta variant on the pace of enrollment in the phase III study for Covid related Arts.

John Good morning. This is absolutely. Thank you John.

John F. Paolini: This is absolutely fantastic. Thank you, Sam. So, yes, good morning. Thank you for the question. Yeah, undoubtedly, as you know, the Delta variant has resulted in a recent upsurge in cases across the world. As you also know, the phase two trial is a global trial that is running in the United States, Brazil, South Africa, Chile, and Peru. And so in that sense, the phase three trial continues on pace. And as I mentioned, it is greater than 75% enrolled at this time with a target population that we discussed with the FDA of approximately 600. Great, thank you. Your next question comes from the line David Niren Garnton with Wedbush. Your line is open.

So good morning, and thank you for the question, yes, undoubtedly as you know the Delta variant has resulted in a recent upsurge in the pieces across the world. As you also know the phase III trials of global trial, which is running in the United States of Brazil, South Africa, Chile, and Peru, and so in that sense.

The phase III trial continues on pace and as I mentioned it is greater than 75% enrolled at this time with the target population that we discussed with the FDA of approximately 600 patients.

Great. Thank you.

Your next question comes from the line of David Neeleman Garten with Wedbush. Your line is open.

David Matthew Nierengarten: Hi, thanks for taking a couple questions here. First off, I was wondering what the kind of disposition of patients who got prescriptions this quarter were where they were in, you know, have been treated, you know, long term for return paracoditis, where they were relatively new, you know, diagnoses, maybe, you know, three or six month history or whatever. I'm just a little bit curious as to how quickly they might be treated with Ril Anasept over time after diagnosis and then on VIXA after recruitment in the Turoigo and Aguilera study. Just you know, is there any additional guidance on when and when you could present data from that, thank you.

Alright, Thanks for taking a couple of questions here first off I was wondering what the kind of what the disposition of patients are who got prescriptions this quarter, where the patients are in.

<unk> been treated the long term for recurrent pericarditis are they relatively new diagnoses, maybe 3 or 6 months history or whatever on just a little bit curious as to how quickly.

It might be treated with real on a stepped over time.

After diagnosis and then on.

Victor on.

On the recruitment and the I'm sure I go to the modular of studies.

Is there any additional guidance.

On when when you could please update us on that thank you.

Ross Moat: Ross, do you want to start and then I'm sure John will jump in? Yeah, absolutely, Sanch.

We're also doing the start on that and I'm sure John will jump in.

Ross Moat: Hi David, thank you very much for the question around patient disposition and where they're coming from. So, I mean, really, what we've seen in this early stage, albeit at the end, is relatively low in a first launch quarter, but we really see a mixture of patients that have started Arklist at the moment. Broadly speaking, you know, we've had patients that have come from other treatments, hence they've had the current pericaditis for some time and have been cycling through treatments, so whether that's corticosteroids, and we know many patients there are stuck on corticosteroids and suffering the toxicity effects of that, as well as elongating the actual disease and making it difficult to come off.

Yes absent of any sand side, David Thank you very much for the question.

Around the patient disposition and why that coming from I mean really what we what we've seen in the Saturday stage Io, albeit the.

<unk> is relatively low in the first launch quarter out, but we really see a mixture of patients that have started off list at the moment broadly speaking we've had patients the <unk>.

Come from other treatments and safety data at all.

The current private kind of Ics for some time and had been cycling through.

Treatments of whether that corticosteroids and we know how many patients out of stock on corticosteroids and suffering the toxicity effects of that as 1 of us.

On gating, the actual disease, and making it difficult to come off so we've seen some of those patients transition across to other places..1 is of course those patients coming from clinical trial uplift. So each of commercial cases as well so that's been a sell.

Ross Moat: So we've seen some of those patients transition across to Arklist, as well as, of course, those patients coming from clinical trial to commercial Arklist as well. So that's been a certain amount, but I think the majority really are coming from those kind of multiple relapsing or refractory type of buckets, which are really new to our And then, David, good morning. Nice to speak with you.

It's on amounts, but I think the majority of radio coming from those kind of multiple relapses in <unk>.

All of our factory.

The buckets, which of the is really the and the new to 2 Atlas patients.

And then David Good morning, Nice to speak with you. This is John.

John F. Paolini: This is John regarding your question about Vixorellumab and the Pirologularus Phase 2B study. Yes, so we did announce at the end of last year that we had started enrolling and dosing patients in this trial, which is testing three different monthly subcutaneous dose regimens of Vixorellumab in 180 patients with moderate T. Vyra paragonodularis. At this point in time, we haven't disclosed any particular timelines and aren't providing guidance on enrollment at this time. But we are excited about this study because of the fact that it does provide, and it's designed to provide this important dose-ranging information. especially with a longer time frame over a 16-week period.

Regarding your question about VIX irrelevant on the program naturally this phase <unk> study.

Yes, so we did announce at the end of last year that we had started enrolling and dosing patients in this trial, which is of testing 3 different monthly subcutaneous dose regiments of VIX Sorel them up to 180 patients with moderate to severe prego nodular us at this point in time, we haven't disclosed any particular timelines and arent providing guidance on enrollment.

On this time, but we are excited about the study because of the fact that it does provide its designed to provide this important dose ranging information, especially with a longer timeframe over 16 weeks.

John F. Paolini: So that's where we are at this point. Got it, thank you. Your next question comes from a line called Jeff Meacham with Bank of America. Your line is open.

That's where we are at this point.

Got it thank you.

Your next question comes from the line of Geoff Meacham with Bank of America. Your line is open.

Geoffrey Christopher Meacham: Good morning, this is Jason on behalf of Jeff. Thanks so much for taking our call and congratulations on the quarter. I just wanted to maybe do a gut check on the launch thus far, you know, as you compare what has happened.

Good morning. This is Jason on for Jeff. Thanks, So much for taking our call and congratulations on the quarter.

I just wanted to maybe do a gut check thus far of the launch as you compare what has happened.

Unknown Attendee: to your expectations, what has gone well, maybe what hasn't gone as well, and in terms of thinking about the trajectory of the launch and uptake and, you know, maybe an overall

To your expectations.

What has gone well, maybe what hasnt gone as well and in terms of thinking about the trajectory of the launch and uptake and maybe an overall inflection.

Unknown Attendee: you know, maybe an overall inflection, you know, where does that stand at this point? Thanks. Thanks, Jason. Yeah, so this is Sanchez.

Where does that stand at this point thanks.

Sanj K. Patel: Thanks, Jason. Yeah, so this is Sanj. Obviously, we feel very good about the launch and we're really pleased with the second quarter results. Maybe I'll hand over to Ross.

Thanks, Jason Yeah. So the <unk>, obviously, we feel very good about the launch and we're really pleased with the second quarter results, maybe I'll hand over to Ross I, certainly cant think of what hasn't gone so well other than that.

Sanj K. Patel: I certainly can't think of what hasn't gone so well, other than the fact that obviously the COVID virus being out there has impeded some sort of face-to-face visits, but that has been increasing steadily, and thanks to a digital format, we've been able to have the actual number of interactions with physicians, you know, severely improve over time, including face-to-face visits, but maybe Ross if you want to Yeah, I'm very happy to, thanks. Thank you. Hi Jason.

That then obviously the.

The COVID-19 there.

Virus being out of that is has impeded some sort of face to face visits but has been increasing steadily and thanks to the digital formats, we've been able to have the actual number of interactions with physicians.

Severely improve overtime, including face to face of it is but maybe you Ross if you want to comment on on some of the Jason's points.

Yeah happy to sign just thinking of hi, Jason Thanks for the question.

Ross Moat: Thanks for the question. So, yeah, I think we really kind of read it on the team. We've got a great experience team in place in the field of cardiovascular disease. That's really helped us to open the doors and meet with physicians as well, of course, as the compelling data for wanting to get out there. So I think, you know, it was a big lift as an organization moving towards a commercial launch for the first time as a company, but really very successfully done.

So, yes, I think we really kind of ready the team we've got a great experience.

Same in place.

In the field of cardiovascular experience has really helped us to open the doors and meet with the physicians in spite of courses of the compelling data of wanting to get out of that so I think it was a big lift as an organization of moving towards a commercial launch for the first time as a company, but really very successfully done and delighted with the launch quarter.

Ross Moat: delighted with the large quarter results. Maybe a little bit to your question around kind of expectations, maybe more forward-looking, if I just clarify one or two things on the forward-looking statement going into Q3, which we said the guidance is $9 to $10 million as we move forward. Of course, when we look at Q2, it was 7.7. That was fairly evenly split between the three different areas of RP, Capson, Dera, and the inventory build that we see at the beginning of a launch.

Results may be on the intimate to you your question around <unk>.

Kind of expectations, maybe more forward looking if I if I just clarify 1 of 2 things on the the forward looking statement guiding to Q Q3, which we said the the guidance is 9% to 10.

<unk> million dollars as we move forward of course, when you look at Q2. It was 7.7 that was fairly evenly split between the 3 different areas of all P caps on DRAM and the inventory build that we use.

It seemed at the beginning of the launch.

Ross Moat: In Q3, we expect the CAPS and DER to really remain very similar to in Q2. We expect marginal with any inventory growth from that side. So really, everything is down to recurrent pericarditis growth moving forward. So if you take the Q3 midpoint of $9.5 million and deduct the expected caps revenue, you'll see that around seven.

In Q3, we expect the caps and damage of really remain very similar to in Q2, we expect margin of with any inventory growth.

Income from that side, so really everything is down to recurrent pericarditis growth move.

Moving forward. So if you take the like the Q3 midpoint of 9 on a half million dollars deduct the expected caps revenue, you'll see that around 7 million moving forward it needs to come from recurrent pericarditis.

Ross Moat: Million moving forward needs to come from recurrent paracaritis. So we've got, you know, a significant growth, greater than two-fold growth moving forward. So we feel, you know, good about that. We feel like it's certainly very, very ambitious on the growth trajectory. But given the nature of the disease, and it's a flaring disease as well as a rare disease, that it's going to be, you know, a steady build up through to the peak.

We've got significant growth greater than 2 fold growth moving forward.

So we feel good about that we feel of that.

On the very very ambitious.

On the growth trajectory, but given the nature of the disease and as of flaring disease is when is the rare disease.

He's going to be a steady build.

Through each of the peak plus we know in Q3 that the the bolus of patients that we had in Q2 is no longer there with the LTE. The long term extension patients that have already transitioned to cost. So really excited about why we are so far I haven't had the great a great launch quarter excited about looking forward is going to continue to be.

Ross Moat: Plus, we know in Q3 that the bolus of patients that we had in Q2 is no longer there with the LTE, the long-term extension patients that have already transitioned across. So really excited about where we are so far. I haven't had a great launch quarter.

Sanj K. Patel: Excited about looking forward; it's going to continue to be a steady build through our people. Great, thanks for the color. Thanks, Jason. I will now like to turn the call back over to Sanj Patel for closing remarks, operator. So, obviously, just to end, thank everybody for joining in. We're obviously very pleased with the performance to date, and we're exceedingly focused now on our future execution. This is what we do. So let's get back to work, and we'll be in touch soon. Thank you. Thanks, everybody. This concludes today's conference call. Thank you for participating. You may now disconnect.

A steady build to each of our patients.

Great. Thanks for the color.

Thanks, Jason.

I would now like to turn the call back over to Sanjay Patel for closing remarks.

Thanks, operator, so obviously just to and thanks, everybody for joining and we're obviously very pleased with the performance of the data and went exceedingly focused now on our future execution. Some of what we do so let's get back to work on them will be in touch soon thank you. Thanks everybody.

This concludes today's conference call. Thank you for participating you may now disconnect.

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