Q1 2022 Global Blood Therapeutics Inc Earnings Call
Greetings and welcome to the global Blood Therapeutics Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow prepared remarks, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded I would now like to turn the call over to Stephen M or got Tim or group.
Please go ahead.
Thank you and welcome to <unk> conference call to discuss the company's financial results for the first quarter 2022 and to provide a business update I'm Stephen ever got head of communications and Investor Relations with me today on the call are Dr. Ted Love, our President and CEO , Jeff Farrow, Chief Financial Officer, David Johnson our.
D J, Chief commercial officer, and Dr. Kim Smith, Wiley Executive Vice President and head of R&D.
During today's call and we'll give an update on our progress in Q1, Jeff will review our financial results.
Jay will give an update on the osprey to launch Ken will discuss our pipeline and then Tad will give a few closing remarks before we open the line for questions.
Earlier. This afternoon, we issued a press release announcing Gbt's financial results and business progress for the first quarter ended March 31, 2022.
Before we begin I'd like to remind you that certain statements. We make on this call that are not historical facts may be forward looking statements that are subject to risks and uncertainties.
Information concerning factors that could cause actual results to differ materially from those expressed or implied by such forward. Looking statements are contained in our SEC filings, including but not limited to our most recent quarterly report on Form 10-Q, as well as in today's press release copies.
Copies of our SEC filings and press releases can be obtained from the investors page of our company website at GBT dotcom.
Forward looking statements made on this call are only as of the time. They are made and you should not place undue reliance on such statements future events or simply the passage of time may cause our beliefs to change we disclaim any obligation to update any forward looking statements other than as required by law.
I'll now turn the call over to Ted.
Thank you Steven and good afternoon, everyone.
The first quarter was a notable start to the year for GBT highlighted by strong sequential growth in new prescriptions about Friday, including a promising start to our lunch in patients ages four to 11.
The early feedback and metrics on the pediatric launch have been encouraging.
For example, we've already secured coverage with many important payers for this expanded indication.
In patients ages 12 and older. We had our best result for new prescriptions in several quarters.
We are optimistic that this momentum will continue if our key growth drivers increased overall awareness and interest in ARX Friday as we expect.
In addition, we are hopeful that the COVID-19 environment, we will continue to improve given the significant headwinds it has cost for delivery of regular in person care for patients with F. C D.
With respect to Europe .
We continue to make exciting progress.
Following the marketing authorization trucks Friday.
The European Commission in February we completed regulatory activities to put us on track for a potential approval in great Britain by mid year.
We kicked off reimbursement discussions in Germany, France and England.
And continue to enroll patients in our early access program.
We also began educating HCP arnox Friday.
And have robust activities planned for launch in Germany, very soon and for the <unk> meeting in June .
During the quarter, we continued our efforts to aggressively advance our clinical programs, while exploring additional therapeutic targets N S. C D and other red blood cell disorders.
For G. B T 601, we plan to initiate a phase two three clinical trial by mid 2022 and later in the call Kim will provide an exciting update on the restart of our phase one.
Steady based on patient interest.
Altogether.
We are well positioned to continue delivering for patients with F. C D.
We have continued to build momentum with our spread out both in the U S and internationally.
And we are advancing what we believe is the most comprehensive pipeline in sickle cell disease.
Our dedication to supporting the S. T D community has never been stronger and our progress with these and other efforts are highlighted in our recently published 2021 ESG report.
With that I will turn the call over to Jeff to review the first quarter 2022 results.
Thank you Ted total net revenue from sales of Ox Friday was $55 2 million for the first quarter of 2022 in line with our guidance of $54 million to $56 million.
First quarter revenue increased by approximately $16 million or 41% year over year.
On a sequential basis first quarter revenue declined slightly from the fourth quarter.
This reflects the anticipated work down of inventory during the quarter following increased purchases by distributors at the end of the fourth quarter.
An incremental increase in gross to net and the impact of Omicron variant in the first part of the quarter.
These drivers were partially offset by the continued increase in the net number of patients on ox Friday.
Days of inventory on hand at the end of the first quarter was in line with historical levels.
Gross to net was 16, 3% for the quarter around a half percent increase from the fourth quarter, primarily related to increased patient co pay support as commercial insurance out of pocket deductibles reset for patients for the new year as well as higher $3 40, D and Medicaid accruals in the quarter.
Now turning to expenses.
Cost of sales for the quarter was $1 million compared with 600000 for the first quarter 2021.
Which represents a slight increase on a percentage of sales basis.
Cost of sales is anticipated to increase in 2022 as we begin to finished utilizing the remainder of our fully expensed inventory that was previously recorded as R&D expense.
R&D expense for the first quarter was $53 million compared with 51 million for the same period in 2021.
The increase in R&D expense was primarily due to an increase in external costs related to GBT six of one <unk>.
Partially offset by a decrease in external costs related docks Friday.
SG&A for the first quarter was $75 million compared with 59 million for the same period in 2021.
The increase in SG&A expense was primarily due to.
Increased professional and consulting services associated with our expanded commercial and medical affairs operations for ox brighter.
Including supporting the pediatric launch in the U S and launch readiness in geographies outside of the U S.
Increased employee related costs and operational growth.
Partially offset by a decrease in noncash stock compensation expense.
Both R&D and SG&A expenses were slightly below our expectations in the first quarter.
Primarily due to the timing of certain expenses that we now expect to be recognized later in 2022.
Net loss for the first quarter was $81 million compared to 75 million for the same period in 2021.
Basic and diluted net loss per share for the first quarter was $1 26 per share.
Paired with a $1 21 per share for the same period in 2021.
We ended the first quarter with cash cash equivalents and marketable securities of $662 million compared with 735 million at the end of 2020 one.
Looking forward to the second quarter of 2022.
We anticipate revenues in the range of $63 million to $65 million.
Or sequential growth of 14% to 18%.
We expect this will be driven by new prescription growth.
Leading phasing in the first quarter, which was more backend weighted in terms of growth of new prescriptions.
And we expect this will be partially offset by an increase in gross to net.
And the timing of broad pediatric payer coverage.
In summary.
Our first quarter results were in line with our expectations and.
And we expect that revenue will grow over the remainder of the year.
In addition, we continued to be well positioned with a strong balance sheet, allowing us to continue to make key investments for future growth.
And with that I will now turn the call over to D. J.
Thank you, Jeff and good afternoon, everyone.
As I've done in the past I will provide an update on three key metrics that will give you further insight into our progress these metrics are.
New prescriptions for <unk> rider, which informs underlying patient demand.
The number of health care providers prescribing ox rider, which captures the progress we are making on adoption and payer coverage, which speaks to the access environment for ox Friday.
First new prescriptions.
We delivered more than 1200, new prescriptions during the quarter, our strongest demand quarter since Q1 of 2020.
This was driven by the pediatric launch and incremental growth from the 12 and older group.
Starting with the pediatric launch we got off to a strong start in the quarter.
We were able to leverage two years of ox rider education and awareness building from our original approval to quickly engage with health care providers on the pediatric label expansion and to train them on administering the new formulation in early January .
Our team did an excellent job building excitement, particularly among pediatric hematologist and caregivers and early feedback from this engagement has been overwhelmingly positive.
This is reflected in the high number of new prescriptions in the quarter.
Somewhat expected the uptake in the pediatric population was strongest in the early part of the quarter when many physicians and patients had been eagerly awaiting the opportunity to start off spread of therapy.
As a result, many existing prescribers had some of their younger patients ready to initiate therapy shortly after approval.
In terms of COVID-19, we did see some impact from omicron in January reflecting continued caution by SCD patients and caregivers.
However, demand and field team access dynamics did improve in February as infections declined.
Similarly, our market research shows that comfort levels for in person care bounce back quickly in February with most patients and caregivers brokering in person visits for routine care.
And in February H C piece, we surveyed indicated.
But the majority of their SPD appointments were conducted in person.
This is a good leading indicator that things are likely to start trending back to more normal healthcare engagement this year.
Feedback from our field teams supported what we heard from our market research anecdotally. Our teams saw patient volumes increase in February and March with ongoing headwinds Kobe, causing some adult patients to be cautious due to the increased risk to their health.
On the provider side, we continue to see office turnover and staff shortages.
And when we look at the claims data in Q1 S. A D patient visits to HCP offices remain below pre pandemic levels.
We believe the net effect of all these trends contributed to the sequential growth in new prescriptions for the 12 and older age group along with the momentum from our DTC and real World evidence that was presented at Ash last year and recently published in expert review of hematology.
We also believe the 12 and older segment benefited from HCP engagement around the pediatric launch given that the majority of our targets treat a range of age groups.
We also continue to see a broad range of patient characteristics for those prescribed docs brighter.
Such as baseline hemoglobin in D O C burden, suggesting that the prescribers are increasingly recognize the importance of addressing polymerization and long term health.
The Covid environment has remained relatively stable from mid Q1 through April though we are closely watching the recent uptick in cases.
Assuming COVID-19 impact is not escalate, we anticipate the new prescriptions in the second quarter will be roughly flat compared to the first quarter.
This reflects slightly lower pediatric new prescriptions. Following the strong start with patients that had been waiting for ox brighter offset by continued incremental improvement in the 12 and older group.
Looking ahead to the second half of the year. If the environment continues to improve we believe we have the potential to accelerate growth driven by our ongoing DTC campaign, new real world data that we continue to publish and the pediatric launch.
The key leading indicators that we see as predictive of a return to sustained quarter over quarter growth our improvements in the industry wide new to brand prescriptions and our patients health care visits returning to pre pandemic levels.
While we are hopeful this will occur we know SCD patients remain cautious for example, all the S. E. T focused community based organization meetings planned for the second half of the year are taking place virtually.
As we prepare for more SPD patients to potentially return to face to face interactions with their health care providers we.
We are working to raise overall ought to brighter awareness through our ongoing DTC campaign.
The metrics from the campaign around targeted audience reach continue to exceed our original goals in the first quarter.
This was aided by several new tactics, including updating the campaign to reflect the pediatric approval and an improved ability to target SCD patients, which we believe contributed to a higher frequency of monthly engagement.
In addition, we launched our branded and unbranded content on new channels, including Youtube Pandora and podcasts visits to ox brighter dot com and sickle cell speaks dot com reached an all time high in the first quarter.
We also are seeing encouraging growth in the number of SCD patients visiting their H C piece within one month of seeing our DTC advertisement.
As we think about recent trends the conversion rate for new prescriptions was consistent with prior quarters.
Similarly at Friday, adherence, which includes compliance and persistence for patients in the first year of therapy continued to be within the range of our prior quarters and analogs as.
As we gain more data on adherence for year, two and beyond we are seeing lower adherence compared to year one <unk>.
As would be expected for any chronic medication, but we are encouraged that some patients in year, one and beyond have restarted ox Friday and that ox rider adherence continues to trend better than S. A D analogs.
In addition, we continue to proactively rollout new tactics aimed at improving overall adherence, including long term adherence.
This includes additional services through our patient hub GBT source solutions, which continues to be an important driver of patient engagement and adherence for.
For example.
Early feedback on the email newsletters and mobile messaging that we launched around the end of 'twenty 'twenty. One has been encouraging. These services are also available to patients via our specialty pharmacies and the data shows that patients engage with GBT source.
Or the similar services offered by these partners have better adherence rates than those that do not.
So we plan to continue investing.
And driving utilization of these programs.
Next my second metric health care provider penetration.
During the quarter total interactions with health care providers increased significantly compared to the fourth quarter, which was lower due to the holidays and lingering impact of the Delta variant.
And despite the impact of the Omicron variant in January in person visits continued to improve as they have for several quarters.
Ching around 50% of our sales force interactions with H C piece during the quarter.
Against this backdrop, we added about 120, new prescribers in the quarter. This includes several prescribers from the 200 new targets. We added for the pediatric launch. This group focuses almost entirely on patients that are 11 and younger.
Currently.
With the momentum from the pediatric launch on new prescribers and re engaging prior writers March was our highest month for the number of active prescribers in the last 12 months.
When we look at the breakdown of writers, we continue to see prescriptions being written by both specialists and non specialist, which we believe is a positive trend for the long term trajectory of the launch.
Turning to payer coverage, we continue to have broad payer coverage for the 12 and older patient population with more than 90% of covered lives having access in the United States.
And our focus is on making it easier for physicians to prescribe and patients to receive box brighter.
In terms of coverage for the four to 11 age group, we made substantial progress and we are well on our way to achieving our goal of broad coverage by mid 2022 faster than we did with the adolescent and adult population.
Before turning the call over to Kim I also want to provide a brief update on our commercial activities in Europe .
We are gaining experience with more than 100 patients participating in our early access programs across Germany, France, and the U K.
And following our European Commission approval in February we are working to launch on Friday in Germany in mid May.
We will have open pricing in Germany for the first year, while we negotiate future reimbursement.
There are around 3000, and sickle cell patients in Germany, and we anticipate adoption will be gradual.
Leading to minimal revenues for Europe in 2022.
Separately. Our team has also begun reimbursement negotiations in France and England.
We have begun educating physicians in Europe on ox brighter, including plans for a robust presence at the European Hematology Association or <unk> meeting in June .
At <unk>, we plan to promote ox brighter for the first time in Europe .
Engage with physicians, including our branded Booth and sponsored an educational program.
We also recently held a successful internal launch meeting in Europe , where it was clear that our employees are excited about bringing akamai to the patients and to helping GBT achieve our mission around the world.
And with that Kim will now talk about the developments in our pipeline.
Thank you D J and good afternoon, everyone on today's call I will provide an update on our efforts to further expand <unk> brightest clinical evidence and geographic reach and our progress advancing our pipeline.
Following on our regulatory approval in the European Union in February we submitted for marketing authorization in Great Britain and believe we are on track potential approval I'd midyear.
As a reminder, in the U K a spider was granted approval of early access medicine scheme, or <unk>, which provides two key advantages.
First patients that meet the eligibility criteria can gain early pre license access to apps right now.
We are pleased that UK patients have already started on Friday, there was a <unk> designation.
Second medicines under Ames that received marketing authorization by the M. H R E as well as a positive assessment by nice benefit from accelerated NHS, England commissioning.
In support of the pediatric launch this week at the American Society of pediatric hematology oncology or Astro conference.
We'll present results from the X Friday expanded access program for children with sickle cell disease age four to 11.
The EAP data reinforces the efficacy and safety of treatment with ARX <unk> in these patients.
As seen in the hope kids one study.
Those hope kids one results were first presented at <unk> last year and were published this April and pediatric bladder cancer.
Importantly, the majority of patients in the EAP had improved scores as measured by the patient and clinical global impressions of change scale, indicating that ox Friday treatment is positively impacting their lives.
Yeah.
I also want to flag that as 77 patient single Center real World experience study of ARX right up from Doctor Allen Anderson was published in late April in the European Journal of Hematology.
Doctor Anderson presented this data, which showed a mean hemoglobin increase of two grams per deciliter and substantial improvements in patient quality of life at several meetings in 2021.
At the annual <unk> meeting in June we plan to present, new occupied real world data and other studies that reflect our efforts to generate new data.
<unk> abstracts will be announced later this month and we are excited about our planned activities.
Now, let's turn to the pipeline.
Foreign Clacker map R. P. Selectin inhibitor, we are enrolling patients in our two phase III studies collectively named thrive.
One is evaluating the reduction of ESP over a 48 week treatment period based on a clock of maps potential quarterly dosing.
We believe this would be a meaningful improvement for patients compared to monthly dosing and aligns well with the typical sickle cell disease practice schedule a quarterly office visits.
The other phase III study is evaluating 90 day D. S. C. Readmission rates following an initial DSC hospitalization, let's tragically occurs and around 50% of patients who experience an initial DSC.
This study is enabled by an clackamas profile and aligned with best in class potential.
We are continuing to focus on enrolling rise as quickly as possible.
Turning to GBP 601, our next generation hemoglobin polymerization inhibitor that we believe has the potential to be a best in class therapy.
At <unk>, we aim to share more data on GBP 601, including sickle cell disease patient Epo levels from the phase one study.
Separately, we aim to publish new preclinical data for GBP six one in a peer reviewed journal later this year.
Based on the impressive data we reported at Ash in December we are working to aggressively advance gbt's, except one.
Our plan is to initiate a phase two three clinical trial with the goal of submitting for a full regulatory approval with FDA.
We expect the phase three design will allow us to advance more quickly into the pivotal phase III portion and are working towards our goal of initiating the phase II portion I made 2022.
The purpose of the phase II portion is to identify the optimal dose to advance into phase III.
As we explore higher doses, we believe they will lead to higher average occupancy and hemoglobin increases and importantly consistently improve the red blood cell health a patient to resemble that of a sickle cell trained individuals.
We are also exploring a 150 milligram dose of DVT six O one with patients from our phase one study.
We are very excited that all six patients reach out to the clinical trial site wanting to restart therapy, providing us the opportunity to restart the study and explore a higher dose.
In my experience. This is the first time I have seen the restart of the sickle cell study due to patient demand.
Patients will receive a 150 milligram daily maintenance dose for six weeks.
We anticipate data from this portion of the study will be available by the end of the year and include the same T. M claim as the data we reported at Ash in December .
I am proud of the progress we are making with GBT six cell line over a short time frame, while also continuing to drive enrollment in our <unk> <unk> studies and advancing our ox brightest studies.
I firmly believe GBT has the leading clinical and pipeline programs in sickle cell disease.
I'll now turn it back over to Ted.
Thank you Kim Inc.
In closing we are off to a strong start in 2022.
Given our progress we are increasingly confident in the outlook for ox Friday, and our pipeline, which provide multiple new growth opportunities in the coming quarters and years.
Crocs bright at new prescriptions are improving.
And we believe we have additional upside with the anticipated increase in in person patient visits.
And as we raise awareness through our many ongoing efforts, including our DTC campaign.
Our compelling clinical data.
And our pediatric launch.
We also continue to invest in the near term opportunities in Germany.
France, and the U K afforded by our recent European Commission approval with the goal of potential broader expansion over time to add another layer to occupy this growth potential.
In terms of innovation, we believe GBT is well positioned with what we view as the most comprehensive pipeline in sickle cell disease and.
And over the next several years our goal is to have at least five medicines approved or in the clinic.
This R&D go is matched by our commitment to provide broader support to the SCD community.
On that note I want to provide a brief update on potential federal legislation. We are supporting that will provide new funding for our multidisciplinary care teams across the lifespan of individuals living with sickle cell disease.
This legislation is modeled after the federally funded hemophilia treatment centers a network of 130 clinics.
That offer coordinated care to Americans living with hemophilia.
The total package of $535 million would help the S. C D community in several ways, including a dramatic increase in the funding for S. C D treatment centers.
Currently this funding is about 9 million per year.
Just far below federal funding, but other orphan diseases.
The legislation would also fund 110 community based organizations that support patients.
Families and communities facing S T D.
If signed into law.
This would be the most comprehensive piece of legislation for sickle cell in 50 years.
In summary, we are well positioned to be the leader in sickle cell disease with multiple opportunities to positively impact the lives of the patients we serve.
With that we'll open the call for questions.
Operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
You May press star two if he would 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 sarkis.
One moment, please while we poll for questions.
Thank you. Our first question is from Ritu burrow with Cowen. Please proceed with your question.
Good afternoon, guys. Thanks for taking the question I wanted to drill down a little bit more into the distribution and our excess sort of across the quarter, maybe any color on what you're seeing in April .
Can you just confirm that there was sort of a net increase.
And our X numbers over the quarter, I guess I'm trying to figure out if the.
The pediatric bolus is over but that growth is continuing into April .
And then I have a follow up.
Hi, Richard with Texas, Alaska DJ to answer that.
Yes, Thank you ritu.
Yeah. So we have seen an increase in net patients on.
Arnox Friday in Q1 over Q4, just like we've seen every quarter that the pool of patients on Ox Friday has increased and of course as you would expect because we have the new indication in Q1, we did see some healthy growth not only in top line.
Enrollments in Q1 at 12 over 1200.
New enrollments, but the total pool of patients also went up.
Consistent with that.
So we haven't you know we're.
We're not here to talk about Q2 results I don't have a lot to talk about that but but we're certainly pleased with the overall performance in Q1.
It is our strongest quarter from a pure demand perspective.
Since the first quarter of approval two years ago.
And in the pediatric bolus is it's pretty much over at that.
You guys are in critical from Treasury.
And what I tried to convey in my prepared comments was that we did see the strongest enrollments in the early part of Q1, so signifying that all of that work we've done for two years preparing the market educating ox rider and.
And of course, many of the in fact, two thirds of the prescribers in the pediatric.
Pool of Treaters are ones that we're already calling on for two years because they also have had 12 and older patients. So yeah. They they had patients ready to go right. When we got approval and so that's why that would made since that was the strongest.
Months for us so.
So yeah, we think we've kind of gotten past that now where we're moving on to more of a consistent number of enrollments expected from the pediatric group going forward.
Got it and then just a quick follow up.
What doses will you be investigated.
T Rowe, but that's sort of a range of doses and will you be.
Pursuing a loading dose strategy again thanks.
I agree to its Ken yes, we are going to be pursuing a loading dose them similar to what we did with the phase one I'm Mad one and that two things is and then we will be using a daily maintenance dose of 150 milligrams.
In the phase III, great. Thanks for taking all the questions.
And so that's to clarify retail I'm, sorry that was for the follow up for the phase one we have not disclosed it goes for the phase two because as you know we are using phase two for the dose finding portion. So that's just what's going to be going on with the additional.
Phase one restart.
Okay, and so the range of doses that you're going to use them that that's to be determined.
So we are going to explore of course, the doses that we looked at at least in our feeds one.
And consider doses based on 100, and 150 milligram before we decide whether or not we will explore against us about that.
Thank you. Our next question comes from Jason <unk> with Bank of America. Please proceed with your question.
Hi, This is Perry on the line for Jason Thanks for taking the question.
I just wanted to get.
Some additional detail on be initiating the phase one trial for 601 first.
When could we expect to get an update on on one patients will start getting dosed and then I know that she spoke about the six patients but is there a potential for a higher number of patients in the phase one.
And then I just have one other question.
We are anticipating to restart the six participants I'm hopefully all six I'm about.
But we are not planning on adding new participants to the phase one portion.
Okay. Thank you and then just one more on the and Rx number are you able to give a breakdown on.
Adults versus is peds and <unk> for an Rx and then I'm curious in terms of the states that have gained coverage or any of these.
States from the key geographies I know that you've discussed 17 states with its high concentration of sickle cell disease patients any any detail would be helpful. Thank you.
Yeah regarding the interact says we're not breaking out interacts by age group our goal is to drive overall adoption.
With sickle cell patients and in foreign above the pricing is the same and we know that these patients will matriculate into.
Into the 12 and older category over time anyway.
So another important dynamic to keep in mind is just that the 12 and older population is still going to be the largest driver of growth going forward. If it's by far the largest group of patients.
So we think just reporting on overall demand.
Overall enrollments every quarter gives you the best idea of how how we're driving demand. So that's where we're at at that time and I forget the second piece.
The second question is related to specific states.
If you're able to provide any detail on key geographies states.
Yeah, we're getting prescriptions across the 17 states that make up 85% of our sickle cell patients as you would imagine that's where we're also the bulk of the pediatric patients nears that same geographies and and we are getting prescriptions across the states you would expect.
Thank you. Our next question comes from Gregory <unk> with RBC. Please proceed with your question.
Hi, this is hanging around for Greg. Thanks for taking our question and I was wondering if you could provide some more color on your expectation around the cross training of adult population going forward.
It depends on the can pack is gradually stabilize what's your latest thinking around providing more long term sales guidance.
Probably breaking down the revenues by age group.
So Jeff you want to take that because you speak to the issue about revenue guidance and long term I think we have.
I can now as you know are focused on giving quarterly guidance and our plan has been to move to longer term guidance, but we really want to make sure that we are somewhat beyond the pandemic and we're not really sure. If we're there yet.
We're hopeful but not really convinced that we're completely there yet with some of the variance there.
They appear to be popular but.
So that's.
That's exactly right that I think the biggest unknown that we have is what's going to happen with potential additional variants popping up and the impact it might have to Ah patients visiting their physicians, which is a big driver of new Rx is so and.
And I believe that the part of your question two is what our expectations on the 12 and above we do you anticipate that growing over time, we do expect to get back to sort of the level that we saw prior to the pandemic happening it's going to take some time one of the things that we've.
Referenced before in the past given the fact that these patients haven't gotten into is it their positions previously that the first visit might be one of those health check ins like how are you doing let's talk you know generally what what's going on and then maybe the second visit is where we talk about hey, there's a couple of new medications out there for sickle cell will get lucky here a little bit about.
That so that's why we're anticipating it to be sort of a step.
Step wise growth as opposed to a light switch in terms of growth then.
Thank you. Our next question comes from a cost Tomorrow with Jefferies. Please proceed with your question.
Okay.
Hi, This is the name of our cash.
You had indicated that I felt.
Previously we know what is the cause.
This estimate that followed 280 quite established for this.
This year and based on my math, that's exactly the implied about putting 100 prescriptions a quarter for the rest of the year do you think that's a original goal for this year and in addition.
Sorry, that's the immersion Gotta go to reaching 15 billion market cap.
We believe that such as a wrong. So it took a little bit on product sales, but that's some kicking those you saw major public out into reaching banks Hopkins and kind of tied to five thank you.
Jeff you may want to take part of that but I'll start out with the 2025 go so and building a company you do want to set some aspirational goals for how you want to build a business.
We want them to be realistic, though as well and one of the things that we did is we looked at companies, which had actually move from where we are today to a market cap of.
Beyond $15 billion or in that range and if you look at those companies those companies tend to have multiple products.
Either approves or looking very likely that they will be approved shortly and we certainly think we're well positioned with that with ox brighter already approved with an clacker mab in phase III.
And with Pixar, one being a program that we think we can move.
Very very very aggressively with and obviously thats the more opportunities we do have things going on in research when they have the capacity to do deals. So we think the five.
Is achievable.
We also know that companies that hit these numbers tend to have significant revenue and obviously, we think our proprietor has long term potential of generating revenue, we're obviously growing our revenue quarter over quarter.
And over the next couple of years, we think that the revenue could look like a company that has a position to be in that market cap. So theres nothing mathematical I don't think there's a there.
It's a program that goes you got to get to a market cap of $15 billion, but their ingredients and we think we've got the fundamental ingredients to make it happen here.
Yeah.
In reference to the patient numbers were really not in a position to speak to it because it does go hand in hand with revenue guidance that said I think what we've previously said still holds true that we expect growth in the back half of this year.
A couple of things that are going to be driving that is our hope that the pandemic will subside and we'll start seeing more in office visits which will drive more than <unk> and then just a reminder, that we still have to go through the payer process on the pediatric side and so we expect to have broader coverage by the middle of this year, which of course will help revenues in my wallet in as well.
Yeah.
Thank you very much very helpful.
Thank you. Our next question comes from your non Jew with Wells Fargo Securities. Please proceed with your question.
Hi, Thanks for taking my questions and congrats on the progress and the pizza the fluffy 11 age group launch.
Two two questions, perhaps the one on the guidance and the prescription numbers.
Is that you know.
From this quarter was 55.
Many into the guidance the guidance for the next quarter or so.
At the middle point of $64 million revenue, how much of that is driven by.
The the pediatric patients are transitioning I mean, four to 11 age group transitioning to insurance coverage and how much is that driven by increased demand. The demand. So that's my first question. Thanks.
Hi, Jan and thanks for the question.
We're not really in a position I think the to bifurcate those out but I think your point is a good one.
As I mentioned on the previous question that we are still seeking broad payer coverage on the pediatric side. So obviously those patients that maybe werent covered in the first quarter, becoming covered it in Q2 will help us on that aspect of it but we also do anticipate growth overall.
In the new prescription somewhat.
Incremental growth.
But we do also expect some growth on the 12 and above it as well so.
Generally I think with DJ had said was that we expect a somewhat of a decrease on the on the pediatric side. The four to 11, just given the early access what happened there but.
But we do anticipate growth on the 12 and above side of prescriptions.
Which we saw in this quarter as well yeah.
Right, because I have Jeff I thought I heard you say.
When you were making the guidance there is a phasing in.
Part of it.
Consideration of that kind of a dynamic basically that says in a second back half for the first quarter the demand is higher.
So.
So that's my understanding that's correct that is correct, yes, particularly in the adults.
Right right, yes, given that there's a bolus.
When the pediatrics.
Proof, which is I think mid February so it sounds like there has to be a adult growth.
Half of the quarter.
For that for you to consider a phasing into next quarter correct Yep.
Thanks for explaining that and my next question is on the.
The 150 milligram dose them so.
So could you talk about you know obviously, if you have to choose a dose you know this is the dose that you have chosen a higher dose what's hemoglobin occupancy.
That you think you'll get based on your modeling.
And is there a possibility that you would do something similar to what you did before that is having a like a second part.
You know a higher dose.
These are six patients. Thank you.
Okay.
Yes.
We anticipate with the modeling that obviously there could be adjusted because our original modeling based on six participants.
But when you look at those six participants he said with a 150 milligram does get occupancies above 40%.
So we are comfortable using those.
Going into a phase two but understand that will get much more data to support a model of <unk>.
Find a dose out of the phase two study.
And I think one thing that's important to point out is that we look and showed you all a fair amount of lock the data and we showed that many of the parameters on these patients are beginning to approach normality.
We would love to have been actually arrived at mimicking the blood from a sickle trait individuals rather than time, one from a sickle cell patient. So that's the rationale for going higher to see if we can recapitulate.
That state that looks like sickle cell trait and no longer sickle cell disease.
Thank you. Our next question comes from your teams sooner Okay with Guggenheim Partners. Please proceed with your question.
Hey, guys.
Two questions first I just want to confirm the guidance of 63 to 65 for Q2 correct.
Correct Okay.
Okay. So if we look at the mid point your guidance is actually implying about a $9 million of additional growth into Q, which is exactly what you did in second quarter of 2021.
And this is the guidance that you're providing despite having an expanded label limited COVID-19 headwinds a lot more increasing in her life that youre seeing so I'm just trying to understand why revenues are not growing at a higher rate. When you have all these dynamic in your favor.
And then also maybe comment I will they accelerated in Q3, just help us understand that dynamic.
Sure yacht and it's a great question and it is something that we wanted to make sure. It was understood. The biggest issue and you know there's a delta between the N Rx growth and the revenue guidance that we're providing the biggest issues are really three folders. One we still don't have broad payer coverage on the pediatric side, so while we might be shipping bottle.
Rules are having requests come in we can't recognize revenues on that so that's going to inhibit the revenue growth.
Other aspect to a lesser extent is our increase in gross to net.
And then finally, we have a dynamic in Q2 similar to what we had in Q1, where the quarter ends on a Thursday and what we have seen as one of our customers, especially distributor tends to buy on that date.
But that shipment is not received until the following quarter. So the results a fairly large purchase that does not get recognized in the second quarter. So that's part of the rationale as well for the lower growth.
The guidance.
Got it and then maybe just one more on the pediatric side. So the 16000 patients that you're targeting can you just talk about realistically how many can be reached with Oxford.
About 50%, 30% or higher just just give us some number if you can and in the longer term. Thank you.
Okay.
Yeah. This is D. J I don't think we've ever given a market share.
The estimate for our sickle cell patients, including the adult patients for that matter.
You know I think if you look at some of the analogues in the marketplace that should give you an idea of what we can likely achieve and exceed I mean, if you look at Hydroxyurea consistently is in the 30% of patients in any given year are on therapy, there's a lot of patients cycle on and off therapy, but consistently about 30% of patients are on therapy.
In a given year.
So that would be if you assume around 100000 patient that's about a 30% I guess patient share.
With ox Friday, being a broad indication and now going down to four years old It does open up the market too.
Hundred thousand sickle cell patients that are now qualified frocks brighter.
With with really no restrictions to speak of in terms of hemoglobin levels or.
Other conditions that would you know it's a very broad indication. So so we would expect to do at least as good as that over time, it's going to take time, we do need to fully come out of the pandemic. He talked about some of the headwinds still being paid.
Patient visits to health care providers still lower than we needed to be but we are expecting that to improve this year.
So yes, so I think all pediatric patients in the photo 11 are really candidates for us and we're going to work very hard to get them access talks bright as quickly as possible.
Great. Thank you very much.
Thank you. Our next question is from Ben Burnett with Stifel. Please proceed with your question.
Hi, Good afternoon, this is totally naive and Exxon.
<unk> been putting that thank you for taking our questions expanding up on a previous question.
What do you expect to show in terms of follow up time for the six patients that they're going to be recycled.
And in the six O one Hyatt <unk> six of one study and that would be part of the bad days.
Yeah, you're talking about the follow up patient that were starting on therapy from phase one.
Correct, Yeah, we've kind of said that towards the end of the year.
Typically ashwin, we try to prevent.
Major news, depending upon when the patients we start we would present all the data that we have so it could be multiple months of treatment at that time.
Okay.
And I'm not quick.
I think one follow up question sorry for pediatric patients.
Thanks for that you haven't seen this patient population.
It's a little early to have any adherence data, we only have a couple of months and in some cases. Some patients are still awaiting the to receive their first bottles and that sort of thing. So we don't have enough data yet, although we can look at our 12 and older population and we know for example that are 12 to 18 year.
Our oleds are in that in that group are actually the highest adherence and so we think the younger the patient and especially when the caregivers. The parents are involved we have the potential with the Florida 11 year olds to have some of the best adherence yet. So we're excited to look at that and we should be able to talk about that more later in the year.
Got it thank you.
Thank you. Our next question comes from Raju Prasad with William Blair. Please proceed with your question.
Thanks for taking the questions DJ you just.
As mentioned this kind of on the compliance rate and some of the younger patient population.
And do you guys have any data that supports kind of.
From the early launch metrics.
That you're getting kind of repeat prescriptions from the younger patient population.
And.
If we're thinking about kind of.
Pull through revenue and then the next quarter.
How much recurring revenue, we can expect from kind of a bolus of new patients you brought in.
In the first quarter I had another one thanks.
Yeah, Yeah, I would just say that from the pediatric group in particular, we don't have enough data because they're really just getting going so.
You know you need to look at that over time, it's really anecdotal from the clinicians that treat.
Four to 11 year olds in the trials in the early access programs et cetera, and they would tell you that with the parents involved the kids tend to do better on adherence and and we've seen in our own data that that the younger patients the.
The teenagers and our 12 and older category do in fact that better.
Parents than the adult so we think everything is pointing towards better adherence I would say that but yeah over time, what we've always said is that we want to be at least in the same category as the analogs, 50% to 70% adherence at the end of the first year of therapy. We remain there right now with our therapies and we're going to watch it over time, we're putting a.
A lot of resources towards supporting patients and we're hopeful that this year, we'll be able to actually.
Increase adherence in some groups over time.
Great and then can you remind me the the gross to net that you said in your prepared remarks, and then maybe just give me a directional.
Directionality on on the gross to net in the pediatric cohort.
Yeah.
Hey, Raj, it's Jeff So we had a gross to net this quarter was about 16.3, and we do expect that to go up incrementally quarter over quarter.
It's sort of a steady state of about 25% probably by mid year I think it's better to look at it in aggregate because that's how we think about it.
Particularly since pricing flat between the two indications.
But you are right there are more patients in the four to 11 age group that are on Medicaid as opposed to potentially being dual eligible and Medicaid and Medicare. So it is slightly higher gross to net in those patients but in the aggregate.
We do expect it to get to that 25% by middle of next year.
Yeah.
Great and then maybe just one last one on 601.
You mentioned that it was kind of inbound interest from the patient to get.
Get back on drug and study 150, I'm, just kind of curious to know.
I.
Would that I mean is there any thoughts about expanding.
The SCD cohorts add more patients or just bringing those six patients back in.
They were washed out of drug and getting them back on drug to look at occupancy before the phase two.
And then just kind of as is.
Part B to that question.
Is there a chance that you might studies two dose cohorts in the phase II trial. After this data.
Yeah, so just to be clear.
The plan was to do a proper phase II study with dose ranging and we're doing that.
What happened with the fixed patients.
Is it they called back and said they'd like to get back on drug and.
And we're opportunistic so we thought that was fantastic news and an opportunity to.
Oblige those patients and get more information, but that's not a substitute for our phase II study. So we're starting our phase III phase II study, that's where we're going to get the proper dose range and we're going to get more data from the six patients, but but again to be clear, it's not a phase II study.
Got it. Thanks, Brent would you have to file amendment to increase the dose level in the phase two or to 150 or is that already included in more the design.
The plan is to expose the six patients starting at $1 50, I think Kim had that in her prepared remarks.
And in the proper phase II study will look at a variety of branches. We Aviv shown you data on 100 milligrams, we solve it that produce about 32% modification, we filed the lock the data look very exciting but.
But the patients didn't get perfect weighted sickle cell disease. So obviously, we're going to go higher and we're gonna go longer and we're going to get the data in.
You know decisions based on the data so it's a little bit hard to tell you what the dose is going to be until we actually do the study.
Yeah.
Thank you. Our next question comes from Joon Lee with Truth Securities. Please proceed with your question.
Hi, Thanks for taking my questions and congrats on the quarter.
Just following up on the previous question.
Practically you are able to restart the trial the phase one trial for 601.
Due to patient demand. It's also highly unusual was there any particular clinical benefit that they missed and complained of that drove them to restart and you.
Does this require any level of dialogue with the FDA to get this study. Thank you.
We were really pleased to see that participants in the phase one we're interested in restarting on 600 <unk>.
One I think that what where I'm pleased with and the development of 601 is we have data from ox brighter.
To go on and as you know in our hope trials, we had a global impression.
Health overall that showed that individuals felt better on when they were receiving ox brighter so it it's not inconsistent.
To think that individual's felt better than that.
That was one of the reasons that they were interested in restarting. However, we did not query specifically why they were interested I'm glad I think that just from milling Iraq's Friday experience I would and suggest that they may have felt better biologics outline.
And it did.
Did we start required.
The consent from DSD or in or in any way.
Well the I think that one of the things that is very interesting about this approach is that using interpretation or intra participant.
Dose escalation is kind of standard within our drug development. So I don't think that that's really required an additional discussion with FDA I think that what we did was pretty conservative we looked at two doses then we looked at our safety tolerability profile and analyze the data.
Before we offered a an increase in dose by the participants restarting.
Great.
I mean of course I was gonna Nevertheless, wirth, our protocols and things are filed with the FDA. So theres nothing FDA is not aware of and our safety data from phase one has.
Been shared widely as well so we feel good about the profile and you know I would just add I mean, while we didn't do formal.
Testing of the patients for how they felt my suspicion is that they came back and said they wanted to go back on drug.
They must have had something desirable.
But we did not formally collect anything.
Right.
Because when I think.
We get our checks they said that the patients felt better.
It's just such a big descriptor. So I just wanted to understand what aspect of this clinically proven then they were localizing.
You said that that was a curiosity, but I mean, its good but yeah.
Yeah.
So I mean, many of these patients with.
You know 123.
Gram increase in hemoglobin, they feel they feel more like they can get their normal activities done.
I mean, if you were anemic, but the hemoglobin you wouldn't feel normal and if it increased to 10, you would definitely tell better. So I think a lot of it is that.
Some patients have also complained that they have kind of daily pain.
That gets better when they have fewer sickle cells.
Presumably on treatment, but again, we didn't do anything formal so we don't want to.
Projected is if we did something formal.
Or just being clear that the patients did come back and say.
We want to go back on therapy.
Thank you. Our next question comes from Tessa Romero with Jpmorgan. Please proceed with your question.
Hey, guys. Thanks, so much for taking my question.
First one is can you provide a little bit more color on what you are seeing with respect to in office health care professionals visits with sickle cell disease patient by age group and are there any differences that are noteworthy and then I had one follow up on the 601.
Yeah.
Okay.
Yeah, I'd be happy to share some of the some of the information. We every quarter, we take a look at the claims data for sickle cell patients and it still is below pre pandemic levels in terms of health care visits across the board. When you look at it for 12 and older versus photo 11th affordable 11th or actually even farther below baseline and the reason for that.
That is because recall that the vaccinations.
For the younger kids.
It has been slower and haven't gotten into all of them. Yet. So so parents are very cautious about getting their kids are in and around the health care system and out and about.
When they have sickle cell disease and could potentially contract COVID-19. So that's why those health care visits are down it has everything to do with COVID-19 risk in our patients being at risk for poor outcomes. If they catch it so they're just being cautious they're being smart and and the kids are being especially.
Conservative so that's that that's still the case today, although as I also said in my prepared remarks, our market research suggests that physicians and patients are feeling more optimistic about getting back in person our reps are getting back in person at higher levels. Now. So we think this is all a good sign and a leading indicator that we're going to get there.
Thank you. Our next question is from Paul Choi with Goldman Sachs. Please proceed with your question.
Hi, Thank you good afternoon, and thank you for taking our questions.
My first question is commercial and just going back to perhaps do Jay's earlier comments with regard to that.
Potential portion of the growth coming from the pediatric population.
Maybe just to understand a little better as to why the.
12, and older population growth here seems to be relatively flat.
Is it just in terms of understanding.
Slower and Rx dynamics or is it hasnt been a sort of issues with regard to adherence broadly over the population as to why this portion of the revenue mix has been relatively flat over the past few quarters and then I had a follow up question.
Yeah, just to be clear out one vijay to answer, but just to be clear there wasn't flat.
There was obviously new patients coming.
In the four to 11, because that was just approved.
But there was growth in the webinar I think I won't make make sure we want to be clear about that.
Yeah, that's exactly right Ted we've seen growth across the board of course are substantial.
Substantial growth in the port of 11, and given that it's new.
But we do see growth also in the adults being re initiated now as we've gotten this approval. There's it makes a lot of sense as well many of the.
Physicians that are now treating the port to 11 year olds also have patients in the 12 and older and as they as we got approval in a broader set of patients and the FDA wanting it to get to lower ages. That's also a great signal to our clinicians that this drug has even more experience has.
<unk> has been tested and proven in the marketplace now the real world evidence is stronger than it's ever been so for all these reasons, there's more confidence using arc spread out across the board.
And in fact in the 12 to 18 year old group.
Saw some some reasonable growth as well, suggesting that yes. Some of those same physicians that are now using it in Florida 11 are now initiating it in there for in the 12 to 18 year olds as well.
Thank you. Our next question comes from Matthew Harrison with Morgan Stanley . Please proceed with your question.
Great. Good afternoon. Thanks for taking the question I just wanted to ask.
Two things related to 601. So first can you just remind us how much tox data you have and how long you can dose patients for them with 601 right. Now if there are any restrictions related to preclinical Tox and then and then second.
What are the what are the headwinds to starting the phase II three just in terms of is this operational things or are there other things you're still considering related to dose and still doing some modeling and things like that thanks very much.
We're on target with our tax not toxicology studies, there's no limitation for those increasing based on that.
And then and the second part of your question was regarding.
So I guess I was asking more around if theres any limitation on duration of dosing related to the the Tox studies that you've done I don't know if you've done all the longer term Tox studies and that has an implication on duration and then second I was just asking around.
The phase two three study in terms of getting that started well what are you waiting for it to get that started thanks, yeah. So there's no limitation on duration as well and the really the goal of the phase two three study will.
We'll be of course with the phase two dose finding them and then can you go over into a phase three.
Without having to start a new phase III study and there is really no limitation on the start of the phase two other than the completion of the protocol getting the sites on board and those studies related factors.
Thank you. Our next question comes from Lee <unk> with Cantor Fitzgerald. Please proceed with your question.
Hey, guys.
Congrats and thanks for taking my questions I guess I'm just wondering if you can comment a little more on the new prescription growth in Q1, what is it.
Sort of the relative contribution from I guess improve conversation versus sort of this new expansion to younger kids and where do you see it or trying to go with us here.
And so I guess on the expansion into the pediatric population.
Can you talk about maybe the dynamics that you've seen in younger kids for I'll attempt to Dallas.
And are there any particular concerns from I guess pediatric prescribers that you maybe call out and on penetration into this group is it mostly a function of access or <unk>.
Are there any other considerations here as well thanks.
Okay.
Yes, I can take that one so yeah as we said in our prepared remarks. The interacts. We're you know we're not breaking it out by age group. We're looking at overall demand we're super excited about having over 1200 enrollments in the quarter the highest we've had in over eat well.
About two years.
And for a quarter and that's really driven by both groups. The affordable 11 year olds as well as the as well as the 12 and older. We saw growth in both of those groups.
In terms of in terms of the dynamics in the kids versus adults.
Yeah, I mean in general.
Pediatricians tend to be and parents tend to be pretty cautious about what you're putting the kids. So so they're going to want to see and be convinced of a lot of the data. The good news is we got the syndication after being on the market for two years, we have a wealth of real world experience safety data and experience in the real world. So we have a new formulation for example that was done.
Specifically for the kids that can be dissolved and into a liquid and given to the kids that way and.
And lots of great patient education, and parent and caregiver education that goes with it. So we're set there in terms of concerns no nothing no new concerns I mean, if you think about it mechanistically. This is the exact place we should be going to a younger population stopping sibling preventing polymerization early should have the best impact that prevented.
Downstream effects of sickle cell disease. So we're super excited about that and we think the parents are as well.
And then penetration wise, we're very excited about being indicated across the board for all sickle all sickle cell patients ages, four and older now so we should be able to do over time.
Uh huh grow into more and more patients.
Thank you there are no further questions in the queue I'd like to turn the floor back over to Ted Love for any closing comments.
I'd just like to end by thanking everyone for joining the call today.
We hope you all stay safe and healthy and please feel free to reach out if you have any additional questions. Thank you.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.