Q3 2021 Harmony Biosciences Holdings Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Harmony Biosciences.
Third quarter 2021 financial update call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.
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I would now like to turn the conference over to your Speaker for today Patti Bank you may begin.
Yes.
Thank you operator, good morning, everyone and thank you for joining US today as we review <unk> Biosciences third quarter 2000.
'twenty, one financial performance and provide a business update before we start I encourage everyone to go to the investors section of the harmony Biosciences website to find the press release and slides that accompany our discussion today, including a reconciliation of our GAAP to non-GAAP financial measures at this stage of our lifecycle we.
Believe non-GAAP financial results better represent the underlying economics of our business.
On today's call are John Jacobs, President and CEO, Dr. Jeffrey <unk> Chief Medical Officer.
<unk>, Chief commercial officer, and Sandeep <unk> CFO.
Moving on to slide two as a reminder, we will be making forward looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially I encourage you to consult the risk factors referenced in our SEC filings for additional details I would now like to.
Turn the call over to Harmony Biosciences, CEO, John Jacobs John.
Thank you Patty.
I would also like to extend my sincere thanks to all of the participants for joining our third quarter 2021 conference call today.
We are three quarters through the year and I am extremely pleased with the progress our team has made to date. Please.
Please allow me to elaborate on our achievements in the context of our three pillars growth strategy, which is shown on slide number three.
Pillar one is to optimize the commercial performance of <unk>.
Q3 represented our seventh quarter of consecutive growth for wafer <unk> and another strong quarter for harmony as we delivered almost $81 million of net sales our strongest quarter to date.
This significant growth nearly 77% versus Q3 2020 was driven by a continued increase in the average number of patients on <unk> and then the number of healthcare professionals prescribing the product.
We believe this reflects greater awareness of the unique mechanism of action of <unk> and a product profile that aligns well with the existing unmet needs of narcolepsy patients.
Moving on to pillar, two which is to expand the clinical utility of wake X beyond narcolepsy.
We continue to advance our clinical programs and product Willi syndrome or PWM.
And my Atonic dystrophy, or DM, two additional rare disease patient populations beyond narcolepsy, both of which have significant unmet medical need and where there are no or limited approved therapies.
We are also continuing to evaluate additional indications for <unk> and other rare neurological diseases, we intend to broaden our lifecycle management efforts for this unique product consistent with our strategy for long term growth.
And finally pillar III acquire new assets to expand our portfolio beyond <unk> are.
Our business development strategy is intended to transform harmony into a multi product company with a robust catalyst rich pipeline of innovative therapies at various stages of development with a potential for launch both during and after <unk> lifecycle.
We announced in August that we acquired <unk> 102, a melon and concentrating hormone receptor one antagonist, which is the first additional asset in our pipeline beyond <unk>.
This is the first example of how we intend to evolve harmonies pipeline into our portfolio of innovative therapies focused on rare neurological diseases.
HP is one or two maybe our first acquisition, but our intention is that it won't be our last.
An important aspect of this pillar is that we intend to focus on assets, where we can leverage our existing expertise and infrastructure, which should enable us to optimize development and launch while managing costs.
Importantly, the strategic financing collaboration with Blackstone that we announced last quarter provides us with additional access to capital, which should further enhance our ability to execute on this key pillar for future growth.
Finally, our dedicated business development team continues to assess opportunities that are aligned with our strategy and we look forward to sharing further progress in this area on future calls.
On that note I would like to turn the call over to Jeff <unk>, Our Chief commercial officer.
Thanks, John.
We saw another strong quarter performance for weeks in Q3 in line with our expectation as measured by the key performance metrics noted on slide four.
Net revenue for the third quarter was $80 7 million representing.
Representing a nine 3% increase from the second quarter 2021, and a 77% increase from the third quarter of 2020.
Despite the expected summer seasonality.
Ross the industry, there is a lower overall patient foot traffic to physician offices due to vacations and holidays, we continue to see strong organic growth for <unk> in Q3.
We observed an increase in topline prescription growth at the end of the quarter in September and we anticipate continued growth in Q4 to close out 2021.
Moving on to slide five.
The average number of patients on <unk> increased approximately 10% from what we reported in the second quarter to approximately 3500 patients.
The consistent growth in the average number of patients on <unk> quarter over quarter demonstrates continued strong demand for weaker and speaks to how the meaningfully differentiated product profile aligns well to the unmet needs of the narcolepsy market.
Our strong commercial performance continues to be driven by the following key factors.
First we saw continued access to health care professional offices for our field sales team.
We've seen consistent in person access to health care professional offices over the past few quarters with about two thirds of all field sales engagements with health care professionals in person, providing a more meaningful education exchange for branded products still in launch phase.
As noted earlier, despite the strong access to health care professional offices.
Did see patient foot traffic decrease from Q2 levels, which is reflective of the expected summer seasonality of increased vacations and holidays.
We are encouraged by the continued access to health care professional losses, coupled with increased patient foot traffic seen early in Q4.
Which we anticipate will lead to a corresponding increase and weakest topline prescription demand.
Second.
You're already strong market access for weekend.
To strengthen with an increased number of planned making additional positive formulary decision for narcolepsy patients with cataplexy.
Over 80% of all U S covered lives have favorable access the week X.
And within these managed care plans in Q3, we saw additional positive formulary decision for type one patients building on prior decisions since the cataplexy indication approval in October of 2020.
These decisions either reduce or eliminate generic step edits prior to week X for adult narcolepsy patients with cataplexy.
And these decisions helped to take friction out of the managed care workflow, helping to accelerated patients' ability to get access to <unk>.
Third we continue to see broad and meaningful clinical adoption of weekend.
We saw continued growth in the prescriber base of <unk> in Q3.
Of the more than 8000 health care professionals that treat the majority of the diagnosed narcolepsy patient population approximately 40% have prescribed <unk> since launch through the end of the third quarter.
We continue to see broad utilization of <unk> across the adult narcolepsy patient population.
About half of new prescriptions written for weakness being for type one narcolepsy patients and half for type two narcolepsy patients.
We continue to see wake is being prescribed as monotherapy as well as can commonly with all other narcolepsy treatment.
Which speaks to the effectiveness of <unk> for both eds, and cataplexy and the broad clinical utility of the product.
With our growing prescriber base for weekend.
We see the majority of prescribers have written prescriptions for two or more of their adult narcolepsy patients since launch.
Now for those trying to reconcile the average number of patients on <unk> against the number of unique prescribers, it's important to understand a few concepts.
First the average number of patients is the midpoint of each quarter metric and represents a measure of the active patients on product.
We believe this is the best patient metric as it takes into account a number of factors, including patient medication behavior, new patient starts compliance persistency and discontinuation.
Second unique prescribers as a measure of those healthcare professionals, who have written a prescription for weakness not necessarily who have the patient started we're currently on wafers.
Across the pharmaceutical industry not all prescriptions written for our products end up in a new patient start or getting filled due to a number of reasons whether it be abandoned.
Patient or health care professional and changing their mind on the treatment choice or managed care approvals.
We're extremely pleased and the strong adoption of <unk> from the narcolepsy treating health care professional community and the different weeks is making in the lives of people living with narcolepsy.
We're even more optimistic about the future opportunity given the existing unmet needs and feedback from recent health care professional market research on their future interest in prescribing weakness as shown on slide six.
Recent market research commissioned by harmony with about 200 health care professionals, including physicians nurse practitioners and physician assistants, who see a minimum of five <unk> five narcolepsy patients each month.
Demonstrated that the vast majority of those surveyed expected to increase their prescribing of waiting for the treatment of both eds and cataplexy.
More than 60%.
Of the health care professionals, and 70% of the nurse practitioners and Tas steadied the plan to increase their prescribing of wake us in the future for both narcolepsy with cataplexy type, one narcolepsy and narcolepsy without cataplexy type to narcolepsy patients.
The top reasons cited for increases in future prescribing of wakes across physicians and the nurse practitioners and <unk> included wakes minimises the use of stimulus.
Weakness effectiveness for eds and cataplexy.
Weakness is not a controlled substance.
<unk> offers a novel mechanism of action.
I am extremely encouraged by the continued strong performance of <unk> in the narcolepsy market and excited about the future opportunity given the consistent access to health care professionals by our field sales team strong and improved market access for weekend.
And health care professional interest and increased prescribing of <unk> for adult patients living with narcolepsy.
I will now turn the presentation over to Dr. <unk> for an update on our clinical development program Jeff.
Thanks, Jess and good morning, everyone.
Before turning to an update on our clinical development programs I would first like to highlight some data and evidence that lend support to the commercial performance of <unk> that Jeff just spoke to.
Based on the overall benefit risk profile of <unk>, which supports its broad clinical utility for adults living with narcolepsy.
In September as highlighted on slide seven the American Academy of Sleep Medicine, published an updated clinical practice guideline, which includes wake X as a recommended treatment option for adults living with narcolepsy.
This new practice guideline was published in the journal of clinical sleep Medicine in a special article titled treatment of Central disorders of Hypersound and American Academy of Sleep Medicine clinical practice guideline and was accompanied by another article titled treatment of Central disorders of Hypersound lists and American.
Academy of Sleep Medicine systematic review meta analysis and great assessment together. These papers provide practice recommendations and the evidence base and supported those recommendations for the treatment of narcolepsy and other central disorders of Hypersound noise.
The new guideline updates and replaces the previous Aaas Sem guideline published in 2007.
And now includes wake X as a strong recommendation for the treatment of narcolepsy in adults based on data that showed clinically significant improvement in excessive daytime sleepiness and cataplexy in patients treated with wake effects.
Of all the currently approved treatment for adult patients with narcolepsy only two products receive a strong recommendation by the ASM based on clinically significant improvement for both eds, and cataplexy and <unk> is one of them.
A second point of evidence that I would like to highlight is from a poster that harmony presented at the annual sleep meeting in June entitled Assessment of the clinical impact of <unk> on excessive daytime sleepiness and cataplexy in adults with narcolepsy.
This poster included the results of a post hoc analysis of the efficacy data from the pivotal trials for <unk> utilizing effect size and number needed to treat for LNG as another way of assessing the efficacy of <unk> in a clinically relevant manner.
The effect size is a measure of the magnitude of difference between drug and placebo on a given outcome, sometimes referred to as therapeutic gain.
The larger the effect size the greater the efficacy of the drug with the following ranges being recognized in the literature.
0.2 represents a small effect size 0.5 is medium and 0.8 represents a large effect size.
As shown on slide eight the effect size of <unk> on the improvement in Eds was 0.61 from the Hanmi, one trial and 0.86 from the Harman http trial.
For the reduction in cataplexy from the Harmony TTP trial <unk> had an effect size of 0.86, which is considered a large effect size.
Number needed to treat or <unk> is a measure of the number of patients that need to be treated to achieve a specific outcome for one patient.
Lower <unk> indicate a more robust effect with <unk> less than 10 generally being considered to represent a clinically meaningful effect.
Slide nine includes the results from the poster demonstrating that.
Across multiple measures for improvement at eds and reduction in cataplexy.
<unk> for <unk> or in the range of three to five.
Specifically for reduction in cataplexy.
77, 8% of patients treated with <unk> had at least a 25% reduction in the weekly rate of cataplexy.
66, 7% had at least a 50% reduction.
And 42, 6% had at least a 75% reduction in cataplexy.
These results equate to entities of three three and four respectively.
The takeaway from these results utilizing effect size in NT is that the clinical data for <unk> and demonstrate robust efficacy for both improvement in Etfs and reduction in cataplexy.
And.
These results are derived from the data that served as the evidence for the strong recommendation for <unk> in the ASM clinical practice guidelines for the treatment of narcolepsy in adults that I spoke to previously.
Turning to our pipeline on slide 10, and our clinical development programs enrolled.
Enrollment continues in the phase II clinical trial in patients with <unk> Willi syndrome or PWM.
This proof of concept trial is evaluating the safety and efficacy of <unk> for the treatment of eds and other symptoms in patients with PWM us.
We have added a few additional clinical sites with all sites actively screening and enrolling patients.
We continue to monitor the potential impact from the trial due to COVID-19 related issues, both from the site perspective, as well as the impact of the pandemic on patients and families.
At this time, we continue to work towards top line data first half of next year and we'll provide updates as the trial progresses.
Moving on to the phase II clinical trial in adult patients with type one my atonic dystrophy or <unk>.
This proof of concept trial was initiated at the end of June and is designed to evaluate the safety and efficacy of <unk> for Etfs and other non muscular symptoms in adult patients with DM one.
The past few months have been busy with.
With trial site, Activations and initial screening and enrollment efforts.
Topline data are anticipated in the second half of next year.
Our new asset <unk> 102, a melamine concentrating hormone or <unk> receptor one antagonist represents a potential first in class molecule with a novel mechanism of action.
We continue to explore potential clinical targets for this early stage asset, which will inform our clinical development strategy going forward.
I will now turn the call over to our CFO Sandeep <unk> Sandeep.
Thank you, Jeff and good morning, everyone. This morning, we announced an issued our third quarter 2021 press release and filed our 10-Q, where you'll find the detail of our financial and operating results.
Unnamed Speaker: Quarter 2021 press release and file our 10Q, where you'll find the details of our financial and operating results. Our third quarter performance is shown on slides 12 and 13. We once again posted our highest quarterly net revenues to date with our third quarter results while continuing to effectively manage our investment and posting continued operating income growth. I'm pleased with the momentum we're seeing.
Our third quarter performance as shown on slide 12, and 13, we once again posted our highest quarterly net revenues to date with our third quarter results, while continuing to effectively manage our investment and posted continued operating income growth.
I am pleased with the momentum we're seeing.
Unnamed Speaker: For the third quarter of 2021, we posted 80.7 million in net revenues for Waiq, that's compared to 45.6 million in the prior year quarter. This represents a growth of 77% versus the prior year quarter. This is also a 9.4% increase from Q21, where we had net revenues of 73.8 million. We're pleased to see the continued growth in average number of patients, especially during a quarter where we typically see seasonality with lower patient visits to physicians off.
For the third quarter of 2021, we posted $80 7 million of net revenues per week as compared to 45 6 million in the prior year quarter.
This represents a growth of 77% versus the prior year quarter.
This is also a nine 4% increase from Q2, 'twenty, one where we had net revenues of $73 8 million.
We're pleased to see the continued growth in average number of patients, especially during a quarter, where we typically see seasonality with lower patient visits to physician offices.
Unnamed Speaker: The third quarter 2021 gross profit was 66.1 million versus 37.7 million in the prior year quarter, and third quarter operating expenses were 45.1 million versus 27.3 million in the prior year quarter. The growth in operating expenses continues to be driven by our commercialization of Wakey and the advancement of our pipeline program. As a result, underlying operating profitability improved as well, and we posted third quarter 2021 operating income of $21.1 million, which compares favorably to operating income of $10.4 million in the prior year quarter.
The third quarter 2021, gross profit was $66 1 million versus $37 7 million in the prior year quarter.
Third quarter operating expenses were $45 1 million versus $27 3 million in the prior year quarter.
The growth in operating expenses continues to be driven by our commercialization of <unk> and the advancement of our pipeline programs.
As a result underlying operating profitability improved as well and we posted third quarter 2021 operating income of $21 1 million, which compares favorably to operating income of $10 4 million in the prior year quarter.
Unnamed Speaker: For the current quarter, we did incur a one-time $26.1 million loss on the extinguishment of our prior death facility with OrbyMed. This contributed to a net loss of 9.6 million for the third quarter. Non-gap adjusted net income for the third quarter was $0.34 million or 51 cents per diluted share versus $13.7 million or $0.25 per diluted share in the prior year quarter. Non-gap-adjusted net income excludes interest expense, amortization, depreciation, stock-based compensation, and other non-operating items. Non-Gap adjusted net income is a non-gap financial measure.
For the current quarter, we did incur a one time $26 1 million loss on extinguishment of our prior debt facility with RV, Matt This.
This contributed to a net loss of $9 6 million for the third quarter.
Non-GAAP adjusted net income for the third quarter were $34 million or <unk> 51 per diluted share versus $13 7 million or <unk> 25 per diluted share in the prior year quarter.
Non-GAAP adjusted net income excludes interest expense amortization depreciation stock based compensation and other non operating items.
Non-GAAP adjusted net income is a non-GAAP financial measure please.
Unnamed Speaker: Please see our press release for a reconciliation of this measure. We generated $30.4 million from cash from operations in the third quarter, and our cash position remains strong, with $189.7 million of cash-equivalents as of September 30th. As a reminder, during the third quarter, we also completed the strategic financing collaboration with Blackstone. This transaction was meaningful to Harmony as it provided us with 200 million of debt capital to pay off our prior loan facility at a considerably lower interest rate, which resulted in an annual interest saving of approximately 11 million. In addition, Blackstone will also provide us access to 100 million in incremental capital as we look to expand our pipeline. This financing also included a $30 million equity investor.
See our press release for a reconciliation of this measure.
We generated $30 4 million from cash from operations in the third quarter and our cash position remains strong.
With $189 7 million of cash cash equivalents as of September 30th.
As a reminder, during the third quarter. We also completed the strategic financing collaboration with Blackstone.
Transaction was meaningful to harmony as it provided us with $200 million of debt capital to pay off our prior loan facility.
Better considerably lower interest rate, which resulted in an annual interest savings of approximately $11 million.
In addition, Blackstone will also provide us access to $100 million incremental capital as we look to expand our pipeline.
This financing also included a $30 million equity investment.
Unnamed Speaker: So as we look forward, we expect to finish the year strong with continued revenue growth in Q4. We also anticipate increased investments in R&D and SGNA as we continue to successfully execute on our three-pillar growth strategy while maintaining profitability throughout the year. So, in conclusion, we continue to operate from a position of strength with a solid balance sheet, access to additional capital, growing revenues, and prudent expense control. We look forward to reinvesting that capital to fund our ongoing development program and acquire additional assets. So with that, I'd like to turn the call back to John for his closing remarks. Okay, John?
So as we look forward, we expect to finish the year strong with continued revenue growth in Q4.
We also anticipate increased investments in R&D and SG&A as we continued to successfully execute on our three pillar growth strategy, while maintaining profitability on the year.
So in conclusion, we have continued to operate from a position of strength with a solid balance sheet access to additional capital growing revenue and prudent expense control.
Look forward to reinvesting that capital to fund our ongoing development program and acquire additional assets.
So with that I'd like to turn the call back to John for his closing remarks John.
John: Thank you, Sundeep. I hope you can see that 2021 has been a successful and busy year so far for our company, with advancements being made on all three pillars of our growth strategy. In Q3, we delivered our seventh consecutive quarter of consecutive sales growth, which represented our best quarter yet in company history. We continue to advance our clinical programs to expand the utility of WACICS beyond narcolepsy, and we are working diligently to assess additional opportunities to expand our pipeline of rare neuroassets beyond WACS as we look to grow Harmony into a leading neurological disease company in the future.
Thank you Sandeep.
Hope you can see that 2021, and that's been a successful and busy year. So far for our company with advancements being made on all three pillars of our growth strategy.
In Q3, we delivered our seventh quarter in a row of consecutive sales growth, which represented our best quarter yet in company history.
Continue we continued to advance our clinical programs to expand the utility of wake X beyond narcolepsy.
And we are working diligently to assess additional opportunities to expand our pipeline of rare neuro assets beyond <unk> as we look to grow harmony into a leading neurological disease company in the future.
Unnamed Speaker: This concludes our planned remarks today. Thank you for joining our call, and I will now turn things back over to the operator to facilitate questions and answers. Operator, can we please open the call to questions?
This concludes our planned remarks today.
Thank you for joining our call and I will now turn things back over to the operator to facilitate questions and answer operator can we please open the call to questions.
Operator: Thank you. Ladies and gentlemen, as a reminder to ask the question, you will need to press the star key than one on your telephone. To withdraw your question, press the pound key.
Thank you, ladies and gentlemen, as a reminder to ask a question you will need to press Star then one on your telephone.
Draw your question press the pound key.
Operator: Again, that's star number one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Chris Howardton. Your line is open.
Again, Thats star one to ask a question please.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Chris Howerton. Your line is open.
Chris Howardton: Hi, good morning. Thank you so much for taking the questions and congratulations on the continued progress here. So I guess maybe for me, Yeah, absolutely.
Hi, good morning. Thank you so much for taking the questions and congratulations on the continued progress here.
So I guess maybe for me.
Unnamed Speaker: So maybe two quick questions for Jeff Dirks and then one for the other Jeff, Jeff Dano. For the commercial side, I guess, from a coverage perspective, Jeff, could you give us some color in terms of what percentage of plans that you've experienced thus far have either one or two step edits? Just a little more information there on some of the access that you're experiencing. The second question, also related to access, you know, when do you expect to get above that 80% of covered lives?
Yes, absolutely. So maybe two quick questions for Jeff and then one for the other Jeff Jeff Dino.
For the commercial side I guess from.
From a coverage perspective, Jeff could you give us some color in terms of what percentage of plans that you've experienced thus far have.
Either one or two step edits just a little more information there and some of the access that youre experiencing.
The second question also related to access.
When do you expect to kind of to get above that 80% of cover.
Covered lives.
You expect that to increase next year and kind of where would you like that to be and then the third one a quick one it should be for Geoff Dana which is.
Unnamed Speaker: You know, do you expect that to increase next year and kind of where would you like that to be? And then the third one, a quick one, should be for Jeff Dana, which is, pardon me, some questions about what the status and expectation would be for the pediatric narcolepsy trial, so just curious if you had any updates on that then. Thank you.
I know that there has been some pardon me some question about what the status and expectation would be for the pediatric narcolepsy trial. So just curious if you had any updates on that thank you. Thank.
Thank you Chris for your questions checked our 'twenty to take those first two questions sure.
Thanks, Chris So with respect to your question on the percentage of plans that have one or two generic step edits in place what I can speak to is the vast majority of plans for especially tight to narcolepsy patients have either a wake promoting agent and or a stimulant as a generic step edit prior to getting <unk> when youre looking at the <unk>.
Unnamed Speaker: Thank you, Chris, for your questions. Jeff Darks, when you take those first two questions. Sure.
One lives what we've seen since October of 2020 with the approval of the cataplexy indication those one or two generic step edits that existed for those patients have become less frequently so the vast majority of lives within the type one audience have either zero or one generic step edit.
Jeffrey Dierks: Thanks, Chris. So with respect to your question on the percentage of plans that have one or two generic step edits in place, what I can speak to is the vast majority of plans for, especially type 2 narcolepsy patients, have either a weight-promoting agent and or a stimulant as a generic step edit prior to getting wakeics. When you're looking at type 1 lives, what we've seen since October of 2020 with the approval of the cataplex indication, those one or two generic step edits that existed for those patients have become less frequent.
So hopefully that gives you a little bit of context, I would tell you its likely the vast majority and type to have one or two generic step edits and then the vast majority in type one have zero or one generic step edits ahead of them.
Your second question on covered lives. So we do have in reported about 80% of all U S insured lives have.
Documented formulary access for <unk> across commercial Medicare part D and Medicaid and when I talk about 80% covered lives. Those are plans that have documented published policies that I can point to in the public domain that you can see the actual formulary position of <unk> the other 20% of plans.
Jeffrey Dierks: So the vast majority of lives within the type 1 audience have either zero or one generic step edit. So hopefully, that gives you a little bit of context. I would tell you it's likely the vast majority in type 2 have one or two generic step edits, and then the vast majority in type 1 have 0 or 1. Generic step betters ahead of them.
That don't have a documented or published policy still have a path forward to getting wakes approved through letters of medical necessity or medical exception. So in essence, almost all patients adult patients living with narcolepsy have access for <unk>.
The 20% of plans that do not have a public policy.
It's hard to determine if and when they may actually ever publish a policy, but I think the important thing and the takeaway for you Chris is that almost all the vast majority if not all adult patients living with narcolepsy have access to <unk>, whether it's a published or a nonpublic formulary policy. So hopefully that helps.
Jeffrey Dierks: Your second question on covered lives. So, we do have and have reported that about 80% of all U.S. insured lives have documented formulary access for Wakex across commercial, Medicare Part D, and Medicaid. And when I talk about 80% covered lives, Chris, those are plans that have documented published policies that I can point to in the public domain so that you can see the actual formulary position of Wakex. The other 20% of plans that don't have any documented or public policies.
Jeff that's not that is helpful.
That's not unique to wake ex that type of payer pattern you may want to just comment on that.
Sure that's a good point John so the other thing Thats important Chris is our goal was always to achieve 80% of published formulary coverage and we achieved that very quickly our market access team has done an amazing job and secure early favorable market access, but that 80% threshold has always been the target that we achieved.
To John's point that stereotypic in a target across the industry that most brands seek to achieve.
Jeffrey Dierks: published policy still have a path forward to getting WACIX approved through letters of medical necessity or medical exception. So, in essence, almost all patients, adult patients living with narcolepsy, have access to WACX. For the 20% of plans that do not have a published policy, it's hard to determine if and when they may actually ever publish a policy. But I think the important thing and the takeaway for you, Chris, is that almost all, the vast majority, if not all, adult patients living with narcolepsy have access to WACACs, whether it's a published or a nonpublished formulary policy. So hopefully, that's it.
Thank you, Jeff and Jeff Daniels, Chris was a third question that pediatric narcolepsy, yes sure. Yes. Good morning, Chris So with regards to pediatric narcolepsy. Our partner <unk> has been conducting a phase III trial in pediatric patients with narcolepsy and as they work to complete that trial that data readout will be important to sort of in.
Form our overall strategy of how to proceed and optimize our program in pediatric narcolepsy.
That's what's been happening with pediatric narcolepsy, we'll keep everyone updated as <unk> progresses that trial.
Okay, Alright, well. Thank you very much for taking the questions and again congratulations on the progress everybody. Thank.
Thank you Chris.
Thank you.
Our next question comes from the line of Amy Your.
Your line is open.
John: And Jeff, that's not unique to Wakex, that type of pay or pattern. You may want to just comment on that person. Sure, but no.
Hi, good morning Congrats.
Congrats again on the call today.
I had a couple of quick questions.
Firstly.
Could you talk about based on how you've seen that.
John: Sure, no, that's a good point, John. So the other thing that's important, Chris, is our goal was always to achieve 80% of published formulary coverage, and we achieved that very quickly. Our market access team did an amazing job and secured early favorable market access, but that 80% threshold has always been the target that we achieved, and to John's point, that's stereotypic and a target across the industry that most brands seek to achieve.
The launch progress.
What is your latest thinking with regard to the number of quarterly patient.
That you expect to see in the coming quarters.
And then related to that.
I think you mentioned that the number of prescriptions per physician that you quote.
Is really the new prescription so could you talk about.
A little bit about kind of where the growth is coming from and what is the total number of prescriptions.
Jeffrey Dierks: Thank you, Jeff. And then Jeff Daneau, Chris is the third question on pediatric narcolepsy. Yeah, sure, yeah. Good morning, Chris.
Physician that Youre seeing.
Then if you have a data point around the mix of new prescriptions total prescriptions that was helpful.
Jeffrey Dierks: So with regard to pediatric narcolepsy, you know, our partner, Bioproje, has been conducting a phase three trial in pediatric patients with narcolepsy. And as they, you know, work to complete that trial, that data readout will be important to sort of inform our overall strategy, you know, how to proceed and optimize a program for pediatric narcolepsy. So, you know, that's what's been happening with pediatric narcolepsy. Markoepsy will keep everyone updated as BioPerset progresses with that trial.
Thank you Amit well why don't we take your first question here and obviously, we're not providing forward looking projections, but I think if you understand our launch at Eharmony. One thing we've experienced as a leadership team and the patient community that we're supporting as Thats. The vast majority of our launch timeframe has been during COVID-19.
And I think over that time, you've seen a very consistent pattern of patient ads quarter on quarter. In fact, seven quarters of consecutive growth. We've now experienced in this last quarter was our most successful quarter to date in company history, It's hard to project what might happen as Covid starts to lift. So we don't have a crystal ball there, but we are diligently working to not let.
Anyone down, especially those patients who are counting on us I can let Jeff berkes add some additional color and context to that and then perhaps we can clarify your second question to make sure we answer that accurately go ahead Jeff.
Thanks for the question and not much to add to John's response, I think it was spot on that were extremely pleased with our continued commercial performance.
As John shared seven consecutive quarters of growth in the average number of patients and that growth has been consistent quarter.
Chris Howardton: Okay, all right. Well, thank you very much for taking the questions, and again, congratulations on the progress, everybody. Thank you.
Quarter over quarter as John shared through the pandemic and although we're not providing guidance. We are encouraged by the continued strong underlying organic prescription demand that we're seeing and it gives us a lot of confidence in continued growth moving forward and the average number of patients in quarter over quarter.
Operator: Thank you. Our next question comes from the line of Amy Fadillo. Your line is open.
Your second question on <unk>.
Prescriptions could you clarify exactly what it is youre looking for Ami. So he can provide you maybe a better response.
Sure.
Ami Fadia: Hi, good morning. Congratulations again on the progress. I had a couple of quick questions. Firstly, could you talk about, you know, just based on how you've seen the launch progress? What is your latest thinking with regard to the number of quarterly patient AMBs that you expect to see in the coming quarters?
Maybe you could just restate that.
You will see growth.
Coming from in terms of new patient adds.
And if you could tell us whether it's from new physicians prescribing product for the first time or is it.
Physician expanding the number of patients that he's prescribing the drug to and if you could also comment on persistency.
Ami Fadia: And then related to that, I think you mentioned that the number of prescriptions per physician that you quote is really new prescriptions. So could you talk about, you know, a little bit about kind of where the growth is coming from and what is the total number of prescriptions per physician that you're seeing? And if you have a data point around the mix of new prescriptions to total prescriptions, that would be helpful. Okay.
Patients on drug.
And Jeff Berkes will handle that question and we do have some market research and the and the slides that were provided today, indicating that physicians, who have experience with <unk>. The vast majority are indicating that they intend to continue prescribing <unk> prescribed more weighted so we are getting very positive feedback and we're seeing a lot of press.
As client behavior, but also as <unk> seen each quarter, we're adding new prescriptions for the first time as we continue to penetrate the markets from an educational standpoint, I'll, let Jeff Berkes add additional color on contact center sure and let me. Thank you for rephrasing in clarifying so.
Unnamed Speaker: Thank you, Ami. Well, why don't we take your first question here, and obviously, we're not providing forward-looking projections. But I think if you understand our launch at Harmony, you know, one thing we've experienced as a leadership team and the patient community that we're supporting is that the vast majority of our launch time frame has been during COVID. And I think over that time, you've seen a very consistent pattern of patient ads, quarter on quarter. In fact, we have now experienced seven quarters of consecutive growth, and this last quarter was our most successful quarter to date. in company history.
To answer your first question about where the growth of new patient adds are coming from so we are sourcing across the broad adult narcolepsy patient population. So we are seeing newly diagnosed patients. We are seeing patients coming from all existing current treatments weight because its being added on concomitantly to wake promoting agents.
Stimulates some oxygen patients.
And we're also sourcing for both type one and type two patients we are seeing patients coming from new prescribers. So we have consistently been adding a.
A couple of hundred new prescribers every single quarter and that continues we've reported about 40% of the prescribing universe is already prescribed the product. We're also seeing that the majority of those patients when they write a new prescription are quickly, becoming a repeat writer, meaning they're starting a second or third or fourth patient. So the organic growth we're seeing has come.
<unk> from existing prescribers as well as new writers.
John: It's hard to project what might happen as COVID starts to lift, so we don't have a crystal ball there, but we're diligently working to not let anyone down, especially those patients who are counting on us. I can let Jeff Dirks add some additional color and context to that, and then perhaps we can clarify your second question to make sure we answer that accurately. Go ahead, Jeff.
When youre looking at patient medication behavior. So your third question about persistency.
So two elements of just patient medication behavior, one related to persistency or discontinuation.
As we've shared some of the public data suggest that compliance or the persistency or discontinuation rates of the.
Drugs in the narcolepsy category range between about 30% to 50% at the end of the first year. So set a different way about 30% to 50% of patients who started medicine.
Jeffrey Dierks: Thanks for the question. And not much to add to John's response. I think it was spot on that we're extremely pleased with our continued commercial performance. As John shared, seven consecutive quarters of growth in the average number of patients, and that growth has been consistent. Quarter over quarter, as John shared through the pandemic, and, you know, although we're not providing guidance, we are encouraged by the continued strong underlying organic prescription demand that we're seeing. And it gives us a lot of confidence in continued growth moving forward in the average number of patients, quarter over quarter.
In this category tend to stop or by the end of 12 months and what we've seen with <unk> is that the data has been very consistent with other oral narcolepsy treatments in this category. So the discontinuation persistency that we're seeing is consistent.
We have heard from health care professionals that they do believe that COVID-19 is likely having an additional impact on this behavior.
Patients are skipping doses, there temporarily stopping medicines they may be hoarding medications, just due to the economic uncertainties that it's caused a number of individuals'.
But what we're hearing though from the physician community is that they believe that wakes discontinuation persistency rate is consistent with other products and their perception is that it's actually even better than the other products within this category when we talk to health care to patients and the patient community. There is a high level of compliance meeting.
Ami Fadia: Your second question on prescriptions: could you clarify exactly what it is you're looking for from me so I can provide you maybe a better response?
Patients are taking the medicines as prescribed by their health care professional.
Ami Fadia: Sure, maybe to just rephrase that, you know, where do you see growth coming from in terms of new patient acquisition, and could you tell us whether it's from new physicians prescribing a product for the first time, or is it a physician expanding the number of patients that he's prescribing the drug to? And it could also comment on persistency of patients on drugs.
Stereotypic compliance rates range between about 80% to 90%, meaning 80% to 90% of patients take the medicine as prescribed by their doctor and what we're seeing within the data for weeks that we've observed is that <unk> is on the higher end of that.
Closer to the 90% range for compliance rates.
Hopefully that helps a little bit about source of business as well as some of the patient medication behavior dynamics. Thank you Jeff Army does that answer your question clearly.
Yes, Doug Thanks.
Ami Fadia: Thanks.
John: Tommy and Jeff Dirk will handle that question, and we do have some market research in the slides that we're providing today indicating that physicians who have experience with Wakex, the vast majority are indicating that they intend to continue prescribing Wakex or prescribe more. So we're getting very positive feedback, and we're seeing a lot of repeat prescribing behavior. But also, as you've seen each quarter, we're adding new subscriptions for the first time as we continue to penetrate the market from an educational standpoint. I'll let Jeff Dirk add additional color and context there. Thank you.
How much. Thank you amie good to hear from you.
Thank you.
Our next question comes from the line of David <unk> Your.
Your line is open.
Hey, Thanks, So just a few so in your comments suggest continued quarter over quarter sequential growth.
Going forward and particularly in <unk>.
Is that going to be.
A function not only of.
Patient growth growth in new starts, but also improvement in gross to nets, just wanted to get a sense of.
How much of the growth you expect to come from starts versus gross to net improvement.
Jeffrey Dierks: Sure, and Ami, thank you for clarifying. So to answer your first question about where the growth of new patient ads is coming from, so we are sourcing across the broad adult narcolepsy patient population, so we are seeing newly diagnosed patients, and we are seeing patients coming from all existing current treatments. Wake is being added concomitantly to wake-promoting agents, and it stimulates some oxibate patients, and we're also sourcing for both type 1 and type 2 patients.
Then thinking beyond 2021 can you just talk overall regarding the directionality of gross to net.
And as we move out of the pandemic do you expect some.
Improvement.
Relative to what we've seen in the past I know you've alluded to.
Some heavy out of pocket sub.
Subsidization does that ease to some extent as we move into next year.
Jeffrey Dierks: We are seeing patients coming from new prescribers, so we have consistently been adding a couple hundred new prescribers every single quarter, and that continues. We reported that about 40% of the prescribing universe has already prescribed the product. We're also seeing that the majority of those patients, when they write a new prescription, are quickly becoming repeat writers, meaning they start a second, a third, a fourth patient. So the organic growth we're seeing is coming from existing prescribers as well as new writers.
And then the last question.
I know you get this a lot, but I figure I'd ask it anyway is just any thoughts on idiopathic hypersomnia and when you might make a decision on whether to move forward.
In that setting for <unk>. Thanks.
David Thank you for your questions and look as we've said before it as Youre well aware, we don't provide forward looking guidance, but obviously your questions are very helpful. In providing some context and color on how we might be thinking about the future from a different perspective. So thank you for that and as we've said before we.
We continue to expect strong organic demand for our products and really for the vast majority of the life time of our launch it's been in a COVID-19 depressed environment at a few months of non Covid as we launched our drug and then we're facing as everyone else all of our colleagues in the industry all of the patients all of us and our families. We're facing.
Jeffrey Dierks: When you're looking at patient medication behavior, so your third question is about persistency, so two elements of just patient medication behavior, one related to persistency or discontinuation. As we've shared, you know, some of the public data suggests that compliance or persistency or discontinuation rates. The drugs in the narcolepsy category range between about 30 to 50% at the end of the first year. Put another way, about 30 to 50% of patients who start a medicine in this category tend to stop it by the end of 12 months. And what we've seen with WakeX is that the data has been very consistent with other oral narcolepsy treatments in this category. So the discontinuation persistency that we're seeing is consistent.
The teeth of this global pandemic hitting us so we really don't know what might happen in the future as it starts to lift but we've seen this consistent strong organic demand quarter over quarter, even in a COVID-19 depressed environment and I believe Jeff Dark stated in his opening statements that about two thirds, Jeff of our calls with sales reps have been face to face now with physician and.
We've seen Chris <unk>, Chris Howerton analysis on foot traffic of patients going into offices, starting to increase a bit starting in Q2. So.
There are positive signs for us and we expect that continued strong organic demand it's hard to say how that may pivot as we go into next year.
Jeffrey Dierks: We have heard from healthcare professionals that they do believe that COVID-19 is likely having an additional impact on this behavior. You know, patients are skipping doses, they're temporarily stopping medicines, they may be hoarding medications just due to the economic uncertainties that it has caused for a number of individuals. But, you know, what we're hearing, though, from the physician community is that they believe that Wake's discontinuation persistency rate is consistent with other products, and their perception is that it's actually even better than the other products within this category.
The other portion of your question related to gross to nets, and what proportion maybe we would see benefit there versus that I'll, let sandy <unk> our CFO.
Try to address that from a gross to net perspective.
Thanks, John.
Generally overall as you know.
From a gross to net perspective Q1 tends to be the one where there is higher gross to net.
Medicare resets in Cochin copayments.
The other obligations, but for the balance of the year it tends to be fairly stable. So we would expect growth to that at least in quarter four to be relatively stable to what we've seen.
Jeffrey Dierks: When we talk to healthcare professionals or to patients and the patient community, there is a high level of compliance, meaning patients are taking the medicines as prescribed by their health care professional. Stereotypical compliance rates range between about 80 to 90%, meaning 80 to 90% of patients take the medicine as prescribed by their doctor. And what we're seeing within the data for WakeX that we've observed is that WakeX is on the higher end of that, closer to the 90% range for compliance. So hopefully, that helps a little bit about the source of business as well as some of the patient medication behavior dynamics.
In current quarters.
And generally.
Overall, we expect.
As John mentioned strong.
Quarterly growth going into the fourth quarter.
Thank you and then I believe David Your last question was idiopathic Hypersomnia. We've stated before that that is one of the additional indications. We're currently contemplating.
For potential exploration with <unk>, and obviously <unk> is not just a sleep drug or in narcolepsy drug it's a histamine modulator and we believe.
Portfolio when a product opportunity. So we continue to explore how to expand beyond narcolepsy with a product IH is one of the indications, we're considering and as we finalize our thought process internally, we will communicate that appropriately to the external audience.
Unnamed Speaker: Thank you, Jeff. Ami, does that answer your question clearly?
Alright. Thanks.
Ami Fadia: Yes, it does. Thanks so much. Thank you, Ami. Good to hear from you.
Thank you David and good to hear from you.
Thank you.
Our next question comes from the line of Danielle Brill Your line is open.
Operator: Thank you, Ami. It's good to hear from you.
Hey, guys. Good morning, and thanks, so much for the question. So I have a few.
David A. Amsellem: Our next question comes from the line of David Amselam. Your line is open.
I guess first just kind of following up on David's question there but.
David A. Amsellem: Hey, thanks. So just a few. So in your comments suggesting continued quarter-over-quarter sequential growth going forward, and particularly in 4Q, is that going to be a function not only of patient growth, growth in new starts, but also improvement in growth to net? I just wanted to get a sense of, you know, how much of the growth you expect to come from starts versus gross to net improvements. Then, thinking beyond 2021, can you just talk overall regarding the directionality of gross to net?
With the seasonal impacts I, specifically wanted to ask you about new patient starts.
Do you think like new patient adds will be stronger in <unk> than in 2022 than they were in <unk>.
And then they were this past quarter and then I also wanted to know if you could elaborate on some of.
The other metrics that might drive growth like time to sell an average dose or are you seeing.
Tend to sell times come down in average doses to go up.
David A. Amsellem: And as we move out of the pandemic, do you expect some improvement relative to what we've seen in the past? I know you've alluded to some serious. out-of-pocket subsidization. Does that ease, to some extent, as we move into next year? And then the last question, I know you get this a lot, but I figure I'd ask it anyway, is just any thoughts on idiopathic hypersomnia and when you might make a decision on whether to move forward in that setting with Potolocent. Thanks. David, thank you for your question.
Thank you good questions Danielle so one on seasonality and then the other on some of the other metrics and factors that might impact our market penetration and adoption Sandeep did you want to comment on seasonality and that we can have Jeff berkes, maybe add some additional context, yes, sure I mean generally.
<unk>.
You mentioned seasonality over the summer is a lower patient visits we saw strong momentum as we go into Q4.
I don't have specifics in terms of how we would see we would expect some acceleration in.
In Q4, just coming out of.
The summer months so.
So we can provide in terms of our thoughts are thinking and then maybe Jeff is there anything from a market insights perspective.
Unnamed Speaker: David, thank you for your questions. And look, as we've said before, as you're well aware, we don't provide forward-looking guidance. But obviously, your questions are very helpful in providing some context and color on how we might be thinking about the future from a different perspective. So thank you.
Thanks for the question Danielle and to build on Sandy's comments I think what we've seen in Q1 and Q3. There are some headwinds you've got the payer dynamics in the first quarter with insurance resets Americans changing insurances co payments out of pockets. So you tend to see a higher sort of <unk>.
Unnamed Speaker: And as we said before, you know, we continue to expect strong organic demand for our product. And really, for the vast majority of the lifetime of our launch, it's been in a COVID-depressed environment. We had a few months of non-COVID as we launched our drug, and then we're facing, as everyone else, all of our colleagues in the industry, all of the patients, all of us and our families, we're facing, you know, the teeth of this global pandemic hitting us.
<unk> with respect to new patient starts there we've just come through the summer seasonality, where you have got more planned and taken vacations more holidays, you tend to have some headwind with respect to new patient starts there.
And then the second and the fourth quarter, you see a little bit of growth in new patient adds and I would anticipate that that to be the traditional rhythm for most branded specialty products and I would expect that to likely mirror itself in 2022.
Unnamed Speaker: So we really don't know what might happen in the future as this starts to live, but we've seen this consistent, strong, organic demand, quarter over quarter, even in a COVID-depressed environment. And I believe Jeff Dirk stated in his opening statements that about two-thirds, Jeff, of our calls with sales reps have been face-to-face now with physicians.
And I think that helps a follow up question, Jeff was about some other factors like persistence compliance those types of factors, yes. So the other questions with respect to metrics for growth growth in terms of strength mix in time to fill.
We've seen Daniel it's been a relatively consistent rate, we reported net sales growth of nine 4%. The average number of patient growth was nine 4%. So they are highly correlated which tells you that most other underlying elements of the forecast remained relatively consistent so the dose mix, we've had consistent with the second quarter.
Sandeep: And we've seen Chris Howardson's analysis of foot traffic of patients going into offices starting to increase a bit, starting in Q2. So those are positive signs for us, and we expect that continued strong organic demand. It's hard to say how that may pivot as we go into next year. The other portion of your question related to gross to net and what proportion may we see benefit there versus Adelaide, Sande, Cepadia, our CFO, try to address that from a gross to net perspective, Sundee.
A little more than two thirds of patients refilling their medicines at the highest dose of $35 six.
Time to fill has been increasing in terms of decreasing the amount of time, but again, it's been relatively stable. We're extremely pleased with the operational efficiencies that we've seen in our model. That's a function of improved market access as well as other operational efficiencies, but I would anticipate those to be remain.
Sandeep: Thank you, St. And yeah, generally, overall, as you know, from a gross to net perspective, Q1 tends to be the one where there's higher growth than net. There are, you know, Medicare resets and caution co-payments and other obligations. But for the balance of the year, it tends to be fairly stable.
Relatively consistent in our growth to be driven by new patient adds and our ability to continue to grow the average number of patients on <unk> quarter over quarter.
Okay. So just to clarify so that Rx growth that you were seeing in September.
It's primarily driven by new adds not not just like patient.
Refilling after taking summer months off.
Sandeep: So we would expect growth in that in quarter four to be relatively stable to what we've seen, you know, in current quarters. And generally, we'll, you know, so overall, we expect, as John mentioned, strong quarterly growth going into the fourth quarter.
Correct, so that the growth the early indicators that we saw at the end of the third quarter and into the fourth quarter is contingent on new patient starts new prescriptions exactly right Daniel.
Okay, great. Thank you so much for clarifying.
Unnamed Speaker: And then I believe, David, your last question was about idiopathic hypersomnia. We've stated before that that is one of the additional indications we're currently contemplating for potential exploration with Wakex. And obviously, Wakex is not just a sleep drug or a narcolepsy drug. It's a histamine modulator, and we believe it represents a portfolio and a product opportunity. So we continue to explore how to expand beyond narcolepsy with the product. IH is one of the indications we're considering, and as we finalize our thought process internally, we will communicate that appropriately to the external audience. All right, thanks. Thank you, David. It's good to hear from you.
Thank you Danielle.
Thank you.
I'm showing no further questions in the queue I will now turn the call back over to John <unk> for closing remarks.
Thank you so much and just one more moment to go back to David <unk> earlier question about gross to net impact David I want to make sure. We heard you clearly I think you might have also referenced perhaps our patient assistance program. There in the past we have mentioned that just want to make sure we circle back and answer that fully for your patient assistance, we did see an increase in demand for our patient assistance.
Graham at the height of the pandemic I believe we communicated in prior quarters that we havent, yet seen that start to mitigate Jeff berkes, any thoughts or color or context for David on that component of perhaps our gross to net.
Sure so with respect to utilization of our patient assistance program, David its been relatively consistent dating back to last year and that elevated level of demand has remained into the third quarter importantly, the patient assistance program is not a gross to net deduction.
Danielle Catherine Brill Bongero: Our next question comes from the line of Danielle Brill. Your line is open.
Danielle Catherine Brill Bongero: Thank you guys, good morning, and thanks so much for the questions. I have a few.
Danielle Catherine Brill Bongero: I guess first, just kind of following up on David's question there, but with the seasonal impacts, I specifically wanted to ask you about new patient starts. Do you think, like, new patient ads will be stronger in 4Q and in 2022 than they were in three, than they were this past quarter? And then I also wanted to know if you could elaborate on some of the other metrics that might drive growth, like time to fill an average dose. Are you seeing time to fill times come down, and average doses go up?
Where are you looking at gross to net that is more co pay and co insurance for eligible commercially insured patients, but that elevated demand for patient assistance is not a gross to net implication.
So where you see gross to nets are more of the statutory rebates with Medicare Medicaid and commercial contracts, we have return reserves, but.
But I just wanted to clarify that the free goods program. Our patient assistance program is not an element of our gross to net.
And despite that elevated demand for our free goods program, we continue to grow strong underlying organic demand. So we're extremely pleased with our ability to help patients both through prescriptions as well as our patient assistance program and over time, we'd expect that free goods program that demand to be mitigated as the pandemic starts to lift it won't be overnight and it will be gradual as people get.
Unnamed Speaker: Thank you. Good question, Danielle. So one on seasonality and then the other on some of the other metrics and factors that might impact market penetration and adoption. Sunveep, did you want to comment on seasonality, and then we could have Jeff Dirks maybe add some additional context? Yeah, sure.
Unemployed and get new insurance et cetera, and we're staying with patients importantly, which is part of our our ethos of harmony. So with that I would just thank you Jeff. Thanks for that clarification importantly to David's prior question and I think we can we can end the call at this time. Thank you. So much for all of your participation and sharing your time and energy with US today. We appreciate it we'll keep working.
Sandeep: I mean, you know, generally, we mentioned seasonality over the summer as they're less patient in business. We saw strong momentum as we go into Q4. You know, we don't have specifics in terms of how we would be. We would expect some acceleration, you know, in Q4. Just coming out of, you know, the summer months. So that's the best we can, you know, at least provide in terms of our thoughts or our thinking. And then maybe, Jeff, is there anything from a market insight perspective that's left to ask?
Hard at harmony to not let any of you down and not let the patients down that are counting on us everyday. Thank you everybody.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
Yes.
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Jeffrey Dierks: Thanks for the question, Danielle. And to build on Sandeep's comments, I think what we've seen in Q1 and Q3 there are some headwinds. You've got the payer dynamics in the first quarter with insurance resets, Americans changing insurances, co-payments, and out-of-pocket. So you tend to see a higher sort of headwind with respect to new patient starts there. We've just come through the summer seasonality where you've got more planned and taken vacations, more holidays.
Sure.
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Jeffrey Dierks: You tend to have some headwind with a new patient respect to new patient starts there. And in the second and the fourth quarter, you see a little bit of growth in new patient ads. And I would anticipate that that's going to be the traditional rhythm for most branded specialty products, and I would expect that to likely mirror itself in 2022.
Okay.
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Jeffrey Dierks: And I think Daniels' follow question, Jeff, was about some other factors, like persistence, compliance, those types of factors. Yeah, so.
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Jeffrey Dierks: Yeah, so the other questions with respect to metrics for growth in terms of, you know, strength mix and time to fill. What we've seen, Daniel, it's been relatively consistent, right? We reported net sales growth of 9.4%. The average number of patient growth was 9.4%. So they're highly correlative, which tells you that most other underlying elements of the forecast remain relatively consistent. So the dose mix we had consistent with the second quarter, a little more than two-thirds of patients filling their medicines at the highest dose, 35.6.
Jeffrey Dierks: Time to fill has been increasing in terms of decreasing the amount of time. But again, it's been relatively stable. We're extremely pleased with the operational efficiencies that we've seen in our model. That's a function of improved market access as well as other operational efficiencies. But I would anticipate those to be remaining relatively consistent, and our growth to be driven by new patient ads and our ability to continue to grow the average number of patients on Wake Exquard.
Jeffrey Dierks: Okay, so just to clarify, so that RX growth that you were seeing in September, it's primarily driven by new ads, not just like patients, you know, refilling after taking the summer months off.
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Jeffrey Dierks: Correct. Some of the growth and the early indicators that we saw at the end of the third quarter and in the fourth quarter are contingent on new patient starts and new prescriptions.
Okay.
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Jeffrey Dierks: Exactly right, then. Okay, great. Thank you so much for it.
Danielle Catherine Brill Bongero: Okay, great. Thank you so much for clarifying.
John Jacobs: I'm showing no further questions in the queue. I would now turn the call back over to John Jacobs for closing remarks.
John Jacobs: Thank you so much. And just one more moment to go back to David Amsselam's earlier question about Gross to Net Impact. David, I want to make sure we heard you clearly. I think you might have also referenced our patient assistance program there. In the past, we have mentioned that we just want to make sure we circle back and answer that fully for you. Patient assistance. We did see an increase in demand for our patient assistance program at the height of the pandemic. I believe we communicated in prior quarters that we hadn't yet seen that start to mitigate. Jeff Dirks, any thoughts in color? context for David on that component of perhaps our gross tenet.
Jeffrey Dierks: Sure, so with respect to utilization of our patient assistance program, David, it's been relatively consistent, you know, dating back to last year, and that elevated level of demand has remained in the third quarter. Importantly, though, the patient assistance program is not a gross-to-net deduction. So, you know, when you're looking at gross-to-net, that is more co-pay and co-insurance for eligible commercially insured patients, but that elevated demand for patient assistance is not a gross-to-net implication.
Jeffrey Dierks: So where you see gross-to-net, it is more of the statutory rebates with Medicare, Medicaid, any commercial contracts we have, and return reserves. But I just wanted to clarify that the free goods program or our patient assistance program is not an element of our gross-to-net. And despite that elevated demand for our free service, we're not a cost of our cost-net. Goods program, and we continue to grow. So we're extremely pleased with our ability to help patients, both through prescriptions as well as our patient assistance program. And over time, we've
Jeffrey Dierks: And over time, we'd expect that free goods program, that demand to be mitigated as the pandemic starts to live. It won't be overnight; it'll be gradual as people get reemployed and get new insurance, et cetera.
John Jacobs: And we're staying with patients, importantly, which is part of our ethos at Harmony. So with that, I would just thank you, Jeff Dirks, for that clarification to David's prior question. And I think we can end the call at this time.
John Jacobs: Thank you so much for all of your participation and sharing your time and energy with us today. We appreciate it. We'll keep working hard at Harmony to not let any of you down and not let the patients down that are counting on us every day. Thank you, everybody.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
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