Q4 2021 Albireo Pharma Inc Earnings Call
Yeah.
Good morning, and welcome to the Alberta Al Pharma, Inc. Fourth quarter and year end 2021 earnings call. At this time, all participants are in a listen only mode.
<unk> and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note that this conference is being recorded I'll now turn the call over to your host Paul Arndt managing director of lifestyle advisors. Thank you you may begin.
Thank you operator, and good morning, everyone. Thank you for joining today's call. This morning, Alberto issued a press release, highlighting its recent business accomplishments and reporting its financial results for the fourth quarter and year ended December 31 2021.
This press release is accessible by the company's website at Www Dot Albarino pharma Dot com.
Before proceeding we would like to take note that managements comments. Today may include forward looking statements regarding the company's plans and expectations.
These statements are being made under the private Securities Litigation Reform Act of 1995, and they are subject to various risks and uncertainties.
Actual results may differ materially due to various important factors, including those described in the risk factors section of our most recent Form 10-K , and our subsequent SEC filings. These.
These filings can be accessed from the media and investors section of our website at Albarino pharma Dot com.
Or on the SEC website.
Any forward looking statements represent our views as of today Tuesday March one 2022 and should not be relied upon as representing our views as of any subsequent dates we undertake no obligation to publicly update these statements.
Now it is my pleasure to turn the call over to Ron Cooper, <unk>, President and Chief Executive Officer Ron.
Thank you Paul and thank you everyone for joining us. This morning with me today are Simon Harford, our Chief Financial Officer, Pamela Stephenson and our Chief commercial Officer and Dr. Jan Madsen, Chief Scientific officer and head of R&D.
So when we step back and reflect on 2021. It was a historic year for all derail. It really was one for the record books, where our journey to bring a new first in class medicine to children and families managing the high burden of rare disease was realized with the approval of bill pay in both.
The U S and Europe .
Summer this approval transformed our company from a clinical stage company to one with an approved product that is building the integrated biopharmaceutical company.
<unk> is a company with a tremendous amount of growth potential across three different drivers of value.
First the global Bill be launch in Pizza.
Second the expanded use of Bill Baker in allergy will syndrome, and deloria trees, yet with our phase III assert and bold studies with the goal of adding two additional indications.
So it allow us to provide a new treatment option for the approximately 100000 coal static liver disease patients worldwide towards our ambition to make build a $1 billion product in the second half of the decade.
And third the rapidly emerging early stage products.
So let me begin by speaking about the <unk> launch.
To date, we are only going in one direction.
Okay.
Starting with delivering on our fast uptake as reported in our press release. This morning, we ended 2021, delivering $7 million and build a product revenue.
The original guidance for 2021 was $3 million to $4 million.
We updated this at the start of the year to $6 million to $7 million. So we're thrilled to deliver on the high end of the range.
Emily we will tell you a bit more about the drivers of performance, but the key to wait takeaway is the response from prescribers is terrific.
The hearing for both HCP and patient that Bill base, making the impact and we're seeing fast launch uptake.
Expect to continue to see growth.
From these initial patients is building as a chronic therapy with weight based dosing and as patients continue to grow they will increase their daily medication.
So you're on that base, we will continue to initiate new patient prescriptions netted against some discontinuation each quarter in the U S and Germany.
And then beyond those two opportunities for growth as the year progresses, we're planning for additional country launches in Europe as pricing and reimbursement is achieved.
Most recently in the UK.
So overall, our opportunity with bill they continues to grow with the potential for great impact on families who are cared for children cold static delivered cities to get into more detail on the launch I'll turn it over to Pamela to take you through key metrics and achievements.
Thanks, Ron I'm really pleased with the progress that we've made with Bill day. The response from health care providers and payers and the impact on patients has been outstanding.
The ongoing feedback from physicians is that they are relieved to have a drug option for their patients and payers are supporting the unmet need by recognizing the value of Bill day uncovering.
To date, the launch is going as planned and we are delivering on our global strategy with a fast launch uptake to reach the estimated 2500 <unk> patients who are available for treatment.
In Q3, we outlined our key metrics, we plan to report on a consistent basis. So let me go through these five metrics and provide a little bit of color for you.
Starting with the total net product revenue, we reported a total of $1 1 million in Q3 with 800000 in the U S and 300000 internationally.
We finished out the year at 7 million and total net product revenue with $5 3 million in the U S and $1 7 million in international.
Overall, our performance to date represents a solid penetration in the U S market and international sales beginning to be significant with Germany, leading our European launches.
The second metric is number of new prescriptions.
These are total new prescriptions generated in 2021.
As you May recall these are new prescriptions with some still going through the reimbursement process.
As we reported we had 28 new patient prescriptions in the Q3 than we saw prescriptions to continue to grow with 65 in Q4 totally we totaled 93, new prescriptions worldwide by the end of 2021.
This number of prescriptions generated this early in the launch period, clearly reflects the unmet need and the interest in the market.
Moving to the number of patients on Bill pay.
14 patients on reimbursed Bill day in the third quarter, meaning these are new prescriptions that have been approved by payers and product has shipped.
Through end of year, we were very pleased to see we added another 39 patients to arrive at a total of 53 patients with approved reimbursement and product shift for 2021.
This is a strong indicator that our alvarado assessed patient support team.
Is working as planned and that payers understand the clear value of Bill day.
The decision to have an in house patient services team is a significant advantage in gaining access and supporting each family to navigate the reimbursement process.
All of which have contributed to our success in driving prescriptions and getting patients on drug.
Physicians are already seeing the advantages of our Albarello sits program based on their first experiences and they recognize the value of this spring when interfacing with insurance companies and our three specialty pharmacies to evaluate a patient's insurance benefits and gain quick access to build a.
The next metric is the number of potential rollover patients on Bill day.
As a refresher this captures the number of patients who are currently on drug and available to transition to commercial sales in the future.
Patients included in this number are currently in the Petro two extension study, our EAP or our managed access program.
Q3, we reported 100 rollover patients.
At the end of the year, we had around 90 patients demonstrating our ability to transition patients quickly to commercial buildout in our reimbursed launch markets U S and Germany.
With time, we expect many more of these patients to rollover as we gained pricing and reimbursement in Europe and continue to transition these patients to commercial sales.
The last metric is unique prescribers in the U S. In the third quarter, we reported 19 prescribers and we more than doubled that in the fourth quarter to end the year with 51 unique prescribers, we are making great progress showing immediate breadth and building a solid base of physicians.
<unk>, who now have experience with Bill day.
We are penetrating a new market successfully by generating multiple prescriptions by prescribers and I'm really happy with our reach today and continued engagement with the remaining targets.
While we are pleased with the launch momentum we are even more excited about the prospects of a successful 2022.
Priorities are to deepen our penetration in the U S gain pricing or reimbursement in other countries and increased sales of build a as we launch around the world.
In the U S. The key to performance is execution and continuing to reach the physicians and centers that have not yet prescribed bill day, while also reaching patients and families to ensure awareness of buildup at the first drive option for the treatment with <unk> Tec.
We feel confident in our ability to grow prescriptions in the U S and obtained access for patients we.
We expect sales at.
Our patient our sales to increase as our patient base from 2021 increases in value as those patients continue to grow.
Then we add new patients less discontinuation unless you expected launch inventory that we will continue to work through and new country launches, which added together sets us up well for a successful year ahead.
As we look at global pricing and reimbursement our goal is to ensure patients have access to build a while achieving reimbursement at a price that reflects the value of Bill day.
In Europe , we are actively pursuing pricing and reimbursement with ongoing discussions in 13 countries.
Very recently, we announced that the National Institute Institute for Health and care excellence or nice issued guidance that recommended build they threw the HFC pathway.
This was the fastest HST evaluation ever and we believe that ultimately the recommendation came as a result of the high unmet medical need the work that we've done to create a compelling data package and the high degree of expertise and execution by our team who have been preparing for pricing and reimbursement.
For many years.
This is the first country in Europe that has assessed bill day from both a clinical and economic perspective, and we are confident that this will have a positive impact across other countries that are in the assessment period.
In France, <unk> has received an SLR important.
And ASMR III from the Haas Transparency Committee.
Which is exceptional and encouraging as we now have multiple independent health technology assessment organizations that have recognized the gold standard clinical program and data for Bill bag.
While we remain confident in our ability to gain pricing or reimbursement in major countries, such as France, and Italy, we do not know when we will gain final approval for reimbursement and what the net price will be.
As the year progresses, our intent is to continue to launch in additional European countries and this will be an important driver of growth for 2022 with the majority of the approximate 90 rollover patients residing in Europe .
Given the very solid start are key actions to penetrate this estimated 2500 global perfect patient opportunity are focused on HCP outreach and education, moving prescriptions through to reimbursement gaining market access in new countries and expanding our geographic footprint so with that.
Let me turn it over to Ron.
Super Thanks, Pamela and congratulations to you and our entire Alberto team for an excellent launch.
Overall, it's clear, there's a significant unmet need and build a is making a difference as we advance our plans to make built a billion dollar product the key for us to take build a from a P pick drug to a leading pediatric cholesteric liver disease drug.
So how do we achieve that.
First we will continue to penetrate new building.
Building on our base quarter by quarter, depending on your net pricing assumptions. We're looking at an acquisition about three to 4000 patients of the 100000 pediatric cholesteric liver patients in the world to deliver $1 billion in sales expansion.
Expansion beyond <unk> is the second goal as we continue to be confident the high level of translate ability of our gold standard.
<unk> III study into other diseases and pipeline programs matched with our ability to commercialize the drug.
Therefore, we are looking forward to an important phase III readout. This year with the pivotal of search studied algae oil syndrome remaining on track to deliver top line data by the end of the year assert is a gold standard double blind randomized placebo controlled study that both the FDA and the EMA have agree would be sufficient for approval.
Well with a positive outcome.
So on track is our gold standard and the only phase III double blind randomized placebo controlled study in Billary atresia called bowls.
We know the affiliate trees, the largest pediatric cholesteric liver disease, and we have great potential to be able to deliver another first drug treatment option to this patient group and meet all of the study of 200 patients randomized to build buy or a placebo studied over a two year timeframe.
A number of unknowns executing the first.
Fees first global Phase III trial in biliary atresia with an iPad given that this is a trial for patients who are babies that have not been borne as yet.
So we're really proud of our ability to execute and effectively enroll more than 50% of the patients by the end of 2021 and expect to complete enrollment this year reiterating our guidance for top line data readout in 2024.
Third driver of value for our organization as our rapidly emerging early assets. We have two unique one of the kinds of products with a three nine to seven to eight.
<unk> 907 is the world's first and only <unk>.
Hi, systemic bio available <unk> inhibitor in clinical development.
What does that mean in our preclinical models <unk> hundred 97 removed us from the body not only by the stools being tested like other I bet inhibitors, but in the year and through the kidney.
Rfps one study, we were able to demonstrate excellent systemic exposure and good tolerability.
The next question is if we can replicate systemic effects in humans with disease and we plan to demonstrate this in the phase II study, which we anticipate starting by the end of this year.
You also have 80 to $3 42, which is the world's first and only oral Mtc P inhibitor.
Today, our subcutaneous peptide and TCP inhibitors currently available in the EU and its an effective drug which you have to inject yourself every single day.
We look at the development of <unk> three <unk> is tracking completely like the sub Q and TCP inhibitor in that the potencies.
At TCP and the effect.
On markers are targeting engagement are similar however, the major differences is at <unk> 342 is a small molecule and has excellent systemic exposure after oral dosing in preclinical models.
Need to demonstrate similar tolerability and safety profile as the sub Q HCP inhibitor, allowing us to advance <unk> <unk> into a phase one study by the end of the year with the intent of improving proving.
Proving to be a unique component of a combination treatment for hepatitis D.
Drive this plan.
We also have great strength of our leadership in full organization spent their careers launching products in growing commercial biopharmaceutical companies in order to maximize the potential process. One way, we're leveraging our capabilities and experience is with our recent creation of the chief business officer role and the appointment of Constantine.
<unk>, who joined us in December .
Prior to joining our organization teams with Boston Pharmaceuticals, where he completed over 20 licensing transactions and before that with Sanofi Genzyme Constantine in partnership with our enterprise team of key leaders in the organization will be evaluating new opportunities to accelerate our plans for expansion as an integrated.
Biopharmaceutical company.
Overall, we have a tremendous opportunity with our three growth drivers first with built in <unk>.
With the expansion to build that into other cold static liver diseases. There are two additional phase III clinical programs and the third driver being our early assets in adult liver disease.
It's exciting to be part of <unk> is a company with a first in class and first to market product for near term for near term growth with strong candidates in the pipeline as we plan for the future.
With that it's now my pleasure to turn the call over to Simon for a financial update Simon.
Thanks, Rob Let me summarize our financial results for Q4, and the full year 2021 build that product revenue was $7 million for the year ended December 31st 2021.
At the top end of our guidance range of $6 million to $7 million for the full year due to build a patient sales with some inventory stocking at all three U S specialty pharmacies.
<unk> revenue was $5 3 million and international revenue was one separately for.
For the full year.
Fourth quarter build a product revenue was $5 9 million.
With U S revenue of four and a half million and international revenue of $1 4 million.
Yes.
Royalty revenue was $18 6 million for the year ended December 31, 2021, compared with $8 3 million for 2020, an increase of $10 3 million.
Royalty revenue was 11 6 million for the fourth quarter of 2021.
Pad with $2 7 million in the same periods of 2020, an increase of $8 9 million.
The increase for both the quarter and full year relates to higher estimated royalty revenue and achievement of an $8 $6 million milestone receipt from EA pharma for <unk> for the treatment of chronic constipation, which is passed onto healthcare royalty partners.
License revenue was $15 million for 2021 due to cash received in Q4 related to the upfront fee from the recently announced deal with jadeite.
The licensing rights to build in Japan.
There was no license revenue for the year ended December 31st 2020.
Cost of product revenue was $1 4 million for the full year and <unk> 9 million for the fourth quarter.
Boeing build a approval certain manufacturing and quality head count costs are now included in cost of product revenue.
There were no material costs is materials related to current product sold were expensed prior to approval given Bill day was only approved in the summer of 2021, there was no cost product revenue in 2020.
R&D expenses were $82 5 million for the year ended December 31, 2021, compared with $76 8 million for 2020, an increase of $5 7 million.
The increase in R&D expenses for the full year 2021 period were primarily due to the build a pivotal phase III studies capillary atresia and <unk> syndrome.
As well as a <unk> 907.
Offset by pre clinical expenses and then the previous year completion of the <unk>. One study EMEA Olympics about phase two study in Nash.
Q4, 2021, R&D expenses were $20 6 million compared with $20 1 million in the same period of 2020, an increase of approximately $1.
SG&A expenses were $69 6 million for the year ended December 31, 2021, compared with $42 4 million for the previous year, an increase of $27 1 million SG&A was $19 7 million for Q4 2021 compared with <unk>.
$10 2 million for the fourth quarter of 2020, an increase of $5 6 million SG&A expenses were primarily made up of commercial expenses related to sales and marketing as well as the necessary support functions as we increased commercialization activities related to.
Pill Bill pay the increases for both the full year and fourth quarter of 2021 were mainly attributable to a ramp up in head count in our U S and European commercial operations.
The increases were also due to the need to put in place appropriate people and systems to ensure efficient operations for the long term and appropriate governance as we evolve to a commercial stage biotech on a global basis.
Net loss for the year ended December 31, 2021 was $34 million or a loss of $1 77 per share compared to a loss of $107 6 million or a loss of $6 73 per share for the previous year net loss for the fourth quarter.
2021 was $11 million or <unk> 57 per share compared to $24 $8 million or a loss of $1 30 per share in the prior period.
As of December 31st 2021, the company had cash and cash equivalents of at least $248 1 million. In fact, we did have exactly $248 1 million.
Versus $262 6 million assets at the end of September 2021, we are reiterating our guidance that current cash is sufficient to last into 2024 based upon our current revenue and expense projections.
For the first quarter of 2022, we anticipate build a product revenue to be between $5 $6 million at the appropriate time during the year. We will look to provide full year <unk> revenue guidance. Once we have better visibility on the timing of launches in European markets.
However, when you think about the outlook for Bill pay revenue in 2022, we expect a hockey stick with higher revenue in the second half of the as we gain reimbursement and launch in a number of international markets and continue to roll patients over to commercial sales.
Some end of 2021 inventory will potentially reduce in Q1 2022 at the three U S specialty pharmacies in the U S.
Price per patient.
It's likely to change based on weight gain but total net price could be lower with more European launches beyond the current three pricing in Germany.
And we expect a high persistency rate however, there will inevitably be some discontinuation.
We will continue to monitor the early launch metrics and are anticipating a very strong year.
With that let me turn the call back over to Ron for closing remarks.
Hey, Simon and before I turn it over to Q&A, Let me summarize what we expect for 2022.
Plan to fulfill our commitments and deliver on quarter over quarter build rate growth as we add patients and launch in additional countries.
We plan to announce the full enrollment of both the assert and bold phase III studies as we remain on track with our development timelines.
We expect that important phase III readout of assert by the end of the year. We also expect to advance <unk> <unk> into a phase two proof of concept study and a 2342 into humans for the first time by the end of the year.
I am very proud of our organization's ability to deliver and execute as planned and thank each and every one of our employees for their commitment drive in innovation.
Thank everybody for joining us and are pleased to open the called out for Q&A operator.
Thank you if you'd like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
First question comes from the line of Union with Jefferies. Please proceed with your question.
Thank you.
Can you comment on what was the inventory level at the end of last.
Sure.
Are you and this is Simon we did have some inventory for launch uptake as I mentioned at the three U S specialty pharmacies in Q4.
As we actually recognize revenue when we ship to those pharmacies that inventory is likely to watch out for the most part during the first quarter of this year and there was no inventory of any relevance in the international markets. So I think what Youre asking is how do you use a base.
Slide into multiple going forward so in terms of trying to.
<unk> 2022 revenue.
The 53 patients who are on drug who are reimbursed at the end of 2021 using average net prices is probably a good baseline of which to project further growth.
Rejections that inventory will fluctuate up and down by quarter.
So we're not kind of getting to every detail quarter by quarter, but.
That's the situation.
Okay, and then you mentioned that.
Yeah are going to increase rapidly in the second half of this year.
When you launch in additional countries and reimbursement coming on but that said.
Current consensus is about 48 million bill they sales for 2022.
Can you comment on how do you feel about the consensus number.
Honestly at this stage it would be premature as we've said to provide.
<unk> guidance, given the uncertainty around the timing of launches in international markets due to pricing and reimbursement I mean, the good news is clearly that we think we're making really good progress.
With pricing and reimbursement and I think thats. The nice recommendation was a really strong endorsement of both the innovative nature of the product Cara Bud and information as well as.
Management capabilities in that area. So we feel good about that the question is timing.
And timing can swing things depend.
Depending on when it happens and the and that's why we say yes.
We'll give further guidance at a point for the full year, when we have more visibility, but clearly you would anticipate to see more of that being on the back end just given the nature of windows.
Launches are likely to come and I think the other factor to think about users theres two swings in this right assignments indicated when those launches occur and we will have better visibility on that as the year goes on and those discussions are going very well like <unk> syndicated with nice perspective, but also one of the other metrics we report as the.
Patients that are a potential rollover patients and theres about 90 of those individuals the majority of those R&D in those international markets right and so as we get pricing and reimbursement that will roll into commercial that will have a pretty significant impact on our revenue.
Okay. My one last question, so Ah patients, who got them been very commercially how many of those have a discontinued thank you.
Thank you.
Yes, hi, we have seen a handful of discontinuation. Yes. This is very much in line with expectations. There's no real pattern that has emerged as a bit of a dynamic measure and in fact, some of the patients that have discontinued or considering restarting.
Thank you.
Thank you. Our next question comes from the line of Ritu <unk> with Cowen and company. Please proceed with your question.
Hi, guys. Thanks for taking the question have you started seeing now that we're a handful of months out have you started seeing any trends in time to fill as we look at the difference between anorexia interacts with chip.
And also are you seeing some new trends unexpected trends expected trends in those interactions not just in <unk>, but in.
The first quarter of 2022 things like you mentioned.
On our previous call.
Community based prescription young adults versus children et cetera. Thanks.
So let me answer your first question on the average time to fail and we are having great success in getting patients through the system and onto reimbursed Bill day, we continue to see a wide range of cases coming through and we're able to pull some prescriptions through very quickly and others take a few weeks to go through the <unk>.
That's right the prior authorization appeals in some cases and it's exactly as we expected and we're really pleased that we've been able to get the 53 patients onto reimbursed Bill day.
And then I think the second part of what you are asking ritu is sort of the trend that the patients.
Our prescribers right and I think what you see is just the license first of all to almost more than double the number of prescribers and so.
Suggest that we're really starting to penetrate deeply in the U S. We're seeing that same trend where the majority of the patients are RF those tertiary centers, but we are seeing some folks in some places.
Our secondary place sets of centers in Kansas or in North Carolina, where we're seeing really good prescription uptake as well.
Then you had to characterize the patient has pretty much gone as we as we.
We've expected right the majority of the patients or <unk> patients, we get a wide range of patients.
Range of ages and weights as well, but we're really pleased that give back we're getting really good penetration from physician base and that the early response with the patients have been initiated has been really terrific.
Got it thanks.
Thank you Ritu.
Thank you. Our next question comes from the line of Brian <unk> with Baird. Please proceed with your question.
Hey, good morning, everyone. Thank you for your question.
I was hoping to maybe get you guys to get some granularity on the <unk> 22 guide of $5 6 million and just kind of the assumptions that are underpinning that I mean, I hear the inventory build.
Maybe a bit of a headwind for <unk>, but even if I kind of assume like a three or four weeks.
Building inventory.
Last quarter.
Normalizing interactions in the U S. Just kind of seems like that should offset so I'm just trying to understand are there other sort of headwinds beyond inventory that you were guiding for a flat to down quarter.
<unk>.
So.
Hi, Brian This is Simon I think it's fair to say that.
Beyond some of it is sort of fluctuations in inventory really does not.
Anything more really say about Q1, because I think what is highly relevant here is at 53 patients initiated on drug as a baseline at year end.
Sure.
And I think as you think about the year going forward.
You need to sort of think about those patients set up to the average net price and then some growth off of that but there's nothing beyond the sort of the normal inventory fluctuations that I would have to say about Q1 is $5 million to $6 million.
Okay, and then maybe if I could just add one question on the <unk> opportunity how should we be thinking about differences in weight between ALG S&P attack patients and given that assertive testing just the 120 microgram.
<unk> dose how should we be thinking about that eventual pricing dynamic as it would seem like there's a potential for average price and ALG has to be substantially higher than that in pizza.
Yeah.
Yeah. Thanks for both of your questions Brian .
Right now if you look at the baseline weight of the eligible patients it's pretty similar to the PC patients. We are using the 120 microgram dose and that.
And I think let's let's wait and see so we get the results, let's let's wait and see what the market looks like a bad, but what kind of sort out from a dosing and pricing perspective at that time.
Thanks for your questions Brian .
Great. Thank you.
Thank you. Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your question.
Thanks for taking the question and going back to the Q1 expectation does that $5 million to $6 million assumed.
Any European I guess reimbursement decision over the next month.
If one does come through I guess.
We changed that and.
Maybe on the pipeline can you just maybe comment.
The bold study.
You came to decide using the proportion of patients undergoing liver transplant as your primary endpoint versus.
Darren bilirubin level.
So I'll take the first question Hi, Tim.
In terms of Q1, it does not assume any additional launches beyond Germany, because in fact with the recent recommendation from nice.
The UK, obviously will be the next one in the Q and that takes roughly up to 90 days before we actually get on the market set the recently included.
Yeah. So in regards to in regards to bolt look we're pretty excited that we've made a lot of progress with bold. We're now over 50% enrolled by the end of last year and so we're right on right on track.
Your question about.
Endpoints is pretty simple right, we've had a discussion with both the FDA and the EMEA, we've sent to them, we'd like to get approval for this product we talked to them about multiple scenarios multiple different endpoints, but they've said to us that they wanted an unequivocal endpoints the proportion of patients that.
At our LIBOR or have their native liver at the end of two years and we're doing what those regulatory agencies want so we're pretty excited about the potential.
For the treatment of Devilry atresia patient sale with Bill pay and we're looking forward to announcing full enrollment of the bold trial sometime this year.
Alright, thank you.
Thanks, Tim.
Thank you. Our next question comes from the line of Ed Arce with H C. Wainwright. Please proceed with your question.
Great. Thanks for taking my questions just a few from me firstly.
Just wondering how you're thinking about and projecting.
Any any ongoing impacts from the Covid pandemic through 2022.
Well I think.
It is just part of our lives some part of our business right. So we've had this in the background.
As we've tried to prepare for launch we've had this in the background as our representatives have been reaching out to physicians. We've had this in the background as we try and bring up sites for asserted in bold and as we as we try to enroll patients in that and I think what you've seen from this team is that we just deal with that right and we focus on.
On executing we focus on delivering as planned and if you look at the history of this organization, we've been able to do that a requirement in the future as well.
Right right of course.
I guess, what I'm getting too wrong.
Okay.
If in fact as many people hope.
Perhaps expect sometime later this year.
Significant Dominion nation.
Of restrictions.
And everything else from the pandemic would you necessarily expect any sort of.
<unk> increase and say prescriptions or ultimately sales any sort of.
Step up.
That could be pointing to.
From that change.
No and we don't expect any change it would be sort of business as usual.
Okay.
Alright, and then.
Wondering how to think about.
Cogs through this year I know you mentioned earlier that.
I think Simon did inventory is likely to wash out sometime this quarter.
But.
When.
Would you expect.
The cogs to sort of normalize.
As you feel from newly manufactured product.
Is the 90% gross margin reasonable assumption.
So.
I'd say the following if you think about what our cost of product revenue.
Cogs.
He's made a pause currently it's made up of really.
Two key components.
One is certain manufacturing and quality head count costs.
And obviously those individuals.
Sort of a stable number of people so a relatively fixed allocation to cogs. The remainder would be made up of product material costs and product material cost at this stage.
Zero and the reason for that is because we expensed the material that we are currently using.
<unk> to approval in the future with new laws.
That material will get allocated to Cogs, but that's a ways down the road at this point in time. So that's not something you really need to worry about for 2022.
But clearly by definition, given with giving an allocation of head count or manufacturing cost as Youll revenue goes up you would expect that that allocation as a percentage of revenue too.
Two four over time and to your longer term question, we haven't given explicit guidance, but suffice it to say in rare disease.
Relative to price.
Office slate this CSA.
Sally attractive lodging.
Product.
Right, Okay fair enough.
And then just final question on the royalty revenue.
Of course, you're you're.
Quarterly royalty revenue.
Turns over to EA pharma, but I believe the $8 6 million dollar milestone.
Is retained by <unk> is that correct.
No thats not correct that gets passed on to <unk>.
Healthcare royalty partners.
Okay, great. Thanks, so much.
Thank you Ed.
Thank you. Our next question comes from the line of Andreas <unk> with Wedbush Securities. Please proceed with your question.
Good morning, and thanks for taking our question.
So it looks like you added 29.
New patients those well, let me rephrase that patients that were not on our rolled over from the 100 that you've already you originally identified as rollovers how.
How are you thinking about the 90 patients.
Going onto a drug for the remainder of the year.
And so we have.
As you mentioned approximately 90 and rollover patients worldwide and these are mainly international patients.
Already moved most of the U S patient onto commercial dry right because they are rolling off the Patrick to clinical trial. So this is this is a large number of patients who are.
On commercial on product too would be ready to roll over to commercial drug as we get the reimbursement.
In each of the upcoming countries.
So we're excited about that number.
And and are working very hard on the reimbursement negotiations has mentioned.
Okay. So just a follow up.
Can't provide any any guy.
Guidance is too.
Our pace.
These patients on or is that.
Is it 10 patients.
Per quarter, a fair assumption or how are you guys guiding or are estimating.
Well it sort of connects to the comment that assignment made earlier Andreas.
We really need to get pricing and reimbursement in those countries right.
So if we were to get pricing and reimbursement in a large country.
Say for example, the middle of the summer versus the fall.
Patients in that country that are part of the 90 would roll over relatively quickly.
If it was in the summer versus the fall that would be quite a difference right. So until we have line of sight on pricing and reimbursement, which by the way as panelists indicated is going very well, we expect that to occur until we have line of sight of that's really hard for us to predict how those how and when those patients rollover.
Okay, and then just another follow up do you.
Part of your.
Year end forecast this uptick in the second half of the year are you anticipating.
Does it come from.
Those those rollover patients coming on are you looking at that.
The population outside of the rollover.
Well all three drivers right. So the first driver of value for us the patients that we exit the year on those low 53 patients are going to grow over time. The second thing that's going to occur as we'll continue to deepen our penetration in the U S and Germany, where we have excess.
So that will that will grow over time and the third drivers, we've just been talking about pricing and reimbursement in other countries and the roll over of those 90 patients into commercial.
Alright, thanks for that I'll jump back into the queue.
Thanks Andres.
Thank you. Our next question is a follow up from the line of Union with Jefferies. Please proceed with your question.
Thank you I have two follow up questions. So phase three data.
I'll, let Jason Drummond, you expect by end of this year.
What's the kind of current expectations for a prolonged timeline and do you expect some off label usage before approval in 2023 and then.
Second question is more clarification so.
Sure, they're all 53 patients onto drug.
Does that exclude the number of patients who discontinued or does that represent.
The number of patients who initiated the track thank you.
Perfect.
Why don't you take that second question, and then I'll talk a little bit about our search yes I'll take the second question. You asked was the 53 patients that is inclusive.
The patients who have discontinued and as I as I mentioned earlier. It is a it is a handful and it's a bit of a dynamic metric in that some of these patients are considering restarting.
Then as it relates to assert we're pretty excited that we're almost going very well, we expect data by the end of the year.
The assert filing with the <unk> filing in the U S will be a supplementary in the variation.
Europe , So relatively quick time line.
As you know as you would expect we do not promote anything off label at Alba rail, but we've already received a number of off label prescriptions generated by physicians.
Thanks for the question soon thank you.
Thank you.
Ladies and gentlemen, this concludes our question and answer session I'll turn the floor back to Mr. Cooper for any final comments.
Thank you operator, and thank you all for attending today's conference call. We will keep you updated on our three value drivers as we continue to advance <unk> mission to provide hope to families.
Patients with liver disease, and the entire liver community. Thank you all for your continued support and have a great day.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.