Q1 2022 ChemoCentryx Inc Earnings Call
Okay.
Good afternoon, and welcome to the Cumulus <unk> first quarter 2020 financial results Conference call.
At this time all parts.
These events are in a listen only mode.
Later, we will conclude.
We conduct a question and answer session. As a reminder, this conference call will be recorded I would now like to turn the call over to Mr. Bill Slattery, Jr. Vice President of Investor Relations and corporate communications at Kinloss answering Mr. Slattery. Please go ahead.
Thank you operator.
Noon and welcome to the chemo centric first quarter 2022 financial results Conference call.
Earlier this afternoon the company issued a press release, providing an overview of its financial results for the quarter ended March 31 2022.
This press release, along with the slide deck that you may find helpful. I listen to this call are available on the Investor Relations section of our website at Www Dot chemo centric dot com.
Joining us on the call today from Chemo centric are Dr. Thomas Schall, President and Chief Executive Officer, and Chairman of the Board Susan can I add.
Executive Vice President Chief financial and administrative officer, and touch, but executive Vice President and Chief Operations Officer.
And Susan will make introductory remarks before we open the call to your questions.
Yes.
During today's call, we will be making certain forward looking statements.
As explained on slide two these forward looking statements are based on current information assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements.
These risks are described in the company's filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March one 2022.
You are cautioned not to place undue reliance on these forward looking statements and chemo centric disclaims any obligation to update such statements.
In addition, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast may five 2022, chemo centric undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this live conference call.
That I will turn the call over to Tom.
Thank you Bill and good afternoon to everyone listening. Thank you all for joining us.
Please move to slide three in our presentation.
We had an excellent first quarter of 2022.
We outperformed our own expectations with U S. Net product sales reached five $4 million in Q1.
All the key performance indicators, we are tracking.
Difficultly improved over Q4 confer.
Confirming we are right, where we need to be at this stage in the launch.
Additional regional approvals in the European Union and Canada.
Build untapped.
Global footprint.
Along with launches in Germany, and Austria through our partner <unk> pharma.
Improving on our cash balance.
We received a $45 million.
Non refundable milestone payment from Biopharma following the EU approval.
The $371 8 million in cash and investments we ended the quarter with.
Places us in a strong financial position to execute on our planned objectives.
Among these objectives are advancing our novel once daily orally administered PDL, one checkpoint inhibitor <unk> by $5 nine.
At the American Association of cancer research or ACR meeting in April .
We presented phase one data in cancer patients that supports our belief in <unk> by five nine could be an important next generation cancer treatment.
We also resumed plans to advanced tab news as a pipeline in interim.
We expect the communications with the FDA in late Q2 will yield next steps for lupus nephritis and severe hidradenitis suppurativa.
As you can see the start to the year as Mark what we call <unk>.
Purposeful execution that has become a trademark of our success at <unk>.
Moving now to slide four.
As you know we launched <unk> in the United States in Q4 October of 2021.
Today, We will review our key performance indicators for Q1 of this year.
They tell us is simple and I think powerful story of growth and achievement.
Specifically in the first quarter, we achieved 240 48, new patients start forms which is nearly double the 195% of the Q4 figure.
We also obtained over 300% of the Q4 number of patients on drug.
277 at March 31.
And the number of unique prescribers nearly triples.
The end of Q1.
We saw continued gains in the conversion rates of new patient start forms to patients on drug surpassing <unk>.
Our expectations at a very impressive 74% cumulative overall launch to date.
Now a few words on the conversion.
It must be noted that.
That the conversion rate is a snapshot of a moment in time is.
This rate will never be 100% because for example, the simple fact that after all people who may have got referred to yesterday may not yet scheduled their prescription.
In addition for other reasons, a relatively small percentage of folks never do fill their prescription of any man.
We do believe that this conversion rate number will continue to grow over time.
It did Q1 over Q4.
To a large majority percentage patients converting.
And to be clear, 74% is a very good rates by industry benchmarks at this stage of our launch.
Ultimately these indicators led to a U S net product sales of $5 4 million in the first quarter.
More than 500%.
The approximately $1 million, we recorded in Q4.
All of these metrics exceed the projections that we had modeled internally this year.
We obtained a robust and compelling picture that lead us to believe we are right, where we need to be.
Part of this growth picture reflects a stacking effect, which we believe will continue to build momentum in coming quarters.
The first two components of the stacking effect, let's refer now to slide five.
Result from increasing new patients starting treatment.
And patients continuing their treatments and refilling their prescriptions.
The third variable now overlaid on slide six.
It's an increase in the percentage proportion unpaid page.
In the first quarter this figure increased remarkably.
And over 60%.
Hey, here, which is beyond our projections at this stage.
Why is 60% regarded as a very good number at this stage of our launch.
Allow me to explain.
First paid patient percentage is again, a snapshot of a moment in time.
It will never be 100%.
Why because at any given moment.
We'll have some patients participating in our patient support programs.
We will subsequently shipped to patients covered by payers for example.
Our quick start program is available to patients prescribed <unk>.
So they can access product without delay.
This has provided for a limited time typically 30 days.
<unk> is designed to provide medications to patients who need cabinets.
While reimbursement is sorted out with Payors.
And we will note of course that such patient support programs are and inspect.
As expected and intelligent feature of an orphan drug specialty pharmacy distributed program.
What's important is that we anticipate that at steady state.
Percentage of paid patients will indeed be the large majority of patients on tablets.
This is why we are very happy with where we are now which is double where we were at the end of Q4.
We expect the types of stacking effects described above we will continue to lead to an increasing percentage of pain patients and importantly increased revenues over time as the tapioca launch matures.
This is the momentum that we expect to propel <unk> sales into the tens and hundreds of millions of dollars.
And then ultimately reaching what I believe will be a blockbuster status at its peak in the U S alone.
To drive the increase in new patient start forms reported this quarter.
Our commercial team has focused on the top prescribing physicians responsible for roughly 80% of all <unk> associated vasculitis prescriptions in the United States.
The majority of <unk> referrals as referred to on slide seven.
We are seeing the results of this focus and execution paying off.
During the first quarter the number of unique prescribers grew to 281, nearly three times, what we reported in Q4.
Moreover, the number of physicians, writing prescriptions to more than one patients in their practice that is repeat prescribers and has also increased markedly nearly doubling from the last quarter.
To complement the individual outreach efforts.
Also presented at key medical conferences in the first quarter, such as the International Society of Nephrology.
And the international.
<unk> lightest and anchor workshop.
We plan to continue our engagement with the scientific community at the European <unk>.
European Renal association meeting or <unk> meeting.
As well as the American thoracic society or Ats meeting later this month.
Followed by the European Alliance of associations for Rheumatology.
<unk> meeting in early June among others.
Let's now travel outside the U S as shown on slide eight.
Fabulous.
<unk> to gain traction with global regional approvals and launches in other parts of the world.
Led by our partner Bae for pharma and their sub licensees.
<unk> was approved in the European Union in January .
And in Canada. This April .
<unk> recently initiated marketing activities for <unk> in Germany, and Austria during the first quarter and expects to launch in other markets. This year.
We anticipate these global regional sales start to develop and we remind the community Advisory Board will pay <unk> royalties in the teens to the mid <unk> percent.
Total ex U S sales off one aggregate net sales line.
Moving on to clinical development in slide nine.
'twenty two is shaping up to be an important year.
Our pipeline advancement.
We will be communicating with regulators our plants two events tab videos in various indications beyond <unk> associated vasculitis. This as part of our <unk>.
Pipeline in a drug strategy.
Shown on slide 10, we are communicating with the FDA later this quarter our plans for the development path for <unk> in lupus nephritis.
<unk> ability to selectively inhibit the <unk> receptor without broad immunosuppression.
Offers new hope to lupus nephritis patients.
We should add feedback midyear and hope to initiate our clinical work here during the second half of the year.
Also later this quarter as referenced on slide 11.
Plan to meet with the FDA to discuss a pivotal phase III trial of <unk> in patients with severe hidradenitis suppurativa or Hs.
At the upcoming May meeting.
The society for investigational dermatology.
We will present recent <unk> research.
Supports a more profound role of inflammatory mediators and neutrophil functions and severe forms of Hs as compared to mile form milder forms.
And during the second half of this year, we intend to meet with the FDA to discuss our clinical trial results with top news and the very rare orphan kidney disease C. III luminary allopathy.
Threatening disease with no currently approved therapies.
Produce that work in line with our preclinical projections.
Along with strong evidence of immune cell activation in cancer patients dosed with <unk> pipeline.
Specifically, we filed in the following.
Evidence of very good oral absorption of <unk> five nine and then a dose proportional fashion.
Evidence of pharmacological activity at all of those.
Evidence that the 120 <unk> once a day dose is therapeutically relevant.
Reproducible evidenced for immune system activation, including so called Th, one responses, which are known to be correlated with antitumor efficacy at the 128 once daily dose.
And a very good tolerability profile of the drug.
We expect to report further clinical findings throughout the year.
With the American Society of clinical oncology or Astro meeting in June .
At <unk>, we intend to describe some findings of what had been called immune response related adverse events or IR aes in the trial to date.
Which are in fact, a good site with.
With immune cell checkpoint inhibitors, and well known to correlate with effective antibody based checkpoint inhibitor currently approved for cancer therapy.
Also while noting that many of the tumor types in the present dose escalation trial.
Not involved the PD lone PD, one pathway, which is typical of the basket design of early cancer studies.
We also intend to relay any early impressions of relevant patients, whose disease may have stabilized while of taking <unk> $5 nine.
Notwithstanding the very advanced nature of their illness.
Such observations will be instrumental in designing the next steps in clinical development of this very important program and expanded phase one two clinical trial, which we intend to start in the second half of this year.
With all of these ongoing activities.
Let's not forget financial strength these tumultuous times.
We are fortunate to be in a strong financial position.
Ending the first quarter with 371 $8 million in cash.
Vestments.
This balance reflects.
A $45 million.
Non refundable milestone payment from by four following the EU approval of <unk>.
Similarly, as a matter of ASC 606 accounting standards.
Payment will be recognized as collaboration revenue over an estimated four year period subject to adjustment from time to time.
We understand this nuance, maybe a particular interest to our friends in the retail investment community.
With that.
The floor is yours.
Thank you Tom.
Our first quarter 2020 twos financial results are included in our press release today and are summarized on slide 14.
<unk> U S. Net product sales were approximately $5 4 million at the first quarter ended March 31, 2022 more than five times, the approximate $1 million reported in the fourth quarter of 2021.
Collaboration revenue was $1 million by the first quarter of 2020 compared to $10 2 million for the same period last year.
The increase in collaboration revenue was attributable to the 10 million costs down.
<unk> in 2021 for the acceptance of the Japanese NDA for <unk> in the treatment of <unk>.
Since ancient vasculitis.
In accordance with ASC 606.
<unk> revenue is now.
<unk> ratably in proportion to actual costs incurred as.
As a percentage of total program to date.
As we complete our performance obligations ended the ivanka penetrate and spent time for.
The 45 million nonrefundable regulatory milestone we seized upon <unk> approval in Europe is indeed reflected in our Q1 balance sheet.
That will be recognized as collaboration revenue.
From product sales.
Over an estimated four year period subject to periodic adjustments.
On the sales for the first quarter ended March 31 2022.
<unk> 2 billion as a reminder costs incurred for manufacturing campaigns initiated prior to the October 2021, FDA approval of <unk>, We recorded SB six and development expense.
Accordingly cost of sales in the near term is expected to be lower than in later period until we clear trends that preapproval inventory.
Research and development expenses were $17 5 million for first quarter of 2022 compared to $23 4 million for the same period in 2021.
This decrease was primarily attributable to manufacturing and cost of commercial drug supply in the first quarter of 2021, along with lower clinical trial expenses.
Selling general and administrative expenses were $26 million.
First quarter of 2022 compared to $16 3 million in the same period in 2021 to.
The increase was primarily due to higher employee related expenses and professional fees, including those associated with the <unk> U S launch and commercialization.
Net loss for the first quarter of 2022 was $38 6 million compared to net loss of $29 7 million for the same period last year.
Total shares outstanding as of March 31, 2022 were approximately $71 1 million shares.
Lastly, we ended the quarter with cash cash equivalents and investments totaling approximately $371 $8 million as of March 31, 2022, which includes a $45 million milestone previously discussed.
Tom.
Thank you Susan.
Moving to slide 15.
This has been an excellent start to 2022.
An excellent start.
To summarize.
<unk> net product sales increased more than fivefold.
And we outperformed our own expectations for Q1 on each of our key performance indicators.
Including new patient start forms.
<unk> on drug unique prescribers and repeat prescribers.
Outside the U S that were approvals in the EU and Canada.
Along with commercial launches by our partner Bae for pharma in Germany and Austria.
We expect to interact with the FDA later this quarter.
To discuss plans of lupus nephritis and severe hidradenitis suppurativa.
With clinical trial initiations for both indications planned during the second half of the year.
We also plan to meet with the FDA later this year.
To discuss C III pulmonary allopathy.
The early data from our first in human studies provide evidence of the benefits that our once daily orally administered PD Lone inhibitor <unk> Wi Fi nine could bring to cancer care.
We expect we expect to present more data and initiate an expanded trial later this year.
And we have the financial engine to drive forward on all of these fronts with confidence.
I alluded too tumultuous market times and.
This ecosystem that is biopharma.
Yes, it's worth reminding ourselves that sometimes conditions.
Just very themselves steep before they blue.
The advantage here at <unk> and my view is great science is already germinated into a great medicine.
Rest assured.
We intend to continue.
Grow and harvest a tough.
And Brent bumper preference.
Our garden of innovation.
That I will thank you all very much and turn the call over to the operator for your questions operator.
As a reminder to ask a question you will need to press star one on your telephone keypad can withdraw your question press the button.
Please standby, while we compile the Q&A roster.
Okay.
Your first question.
Comes from the line of Joseph Schwartz.
Your line is open.
Hello.
Hello, Joe we can hear you now.
Excellent.
Congratulations on a strong launch.
I was wondering if there was any inventory stocking in the quarter and if you can give us a sense of.
The proportion of patients on drug that were paid as of the end of the first quarter and then I have a follow up.
Sure Joe So the inventory stocking is not a big feature of what we're talking about each quarter, you should expect a limited channels supply per our agreements with specialty distributors.
And specialty pharmacies selling tab.
But they typically maintain approximately two weeks supply on hand in line with other rare disease products.
As I may have alluded to as of March 31.
277 patients on drug of which approximately 60% run paid medication. So thats a significant and models I think we're very happy with the model that's performing models uptick from where we were in Q4.
Great. That's super helpful. Thank you and then.
Can you provide any additional color on the real world pricing of <unk>.
How should we be thinking about the price on a gross and net basis.
Yes.
We're still quite early in the launch, but our goal has been to increase especially education about tap, yes, I'll get it to patients certainly get people in to the program through quick start et cetera.
We're also working very carefully leveraging patient support group programs that we've implemented to help again appropriate patient access to treatment, while working through the reimbursement process. All of those things are going really well and I think we're right, where we remodel to be in fact exceeding our models. So our wholesale.
Physician costs for a 30 day supply is 14450.
You know we've said before we believe reflects the value and are certainly in line with rare disease pricing.
We will talk a little bit more about the overall gross net discussions as the launch matures a bit more we're also sensitive to the fact that gross to net means different things to different people. So as we as we are able to again mature the launch would be able to talk globally.
Above that concept will be happy to do so, but I would just stress again through March the percent of paid patients on drug.
Jumped substantially to 60% and I was quoted at the end of Q4.
They were over over one third were paid drug so as you can see.
We're making great strides there and again right where we're model.
While we would like to be and it's taking an average of less than four weeks or so to reach payer approval. So all of the metrics in our models going into right direction in fact, either right on or exceeding our expectations at this point.
Great. That's really helpful. Thanks for the added information.
Your next question comes from the line of Steve.
Kate Hudson James Raymond.
Sorry, Raymond James Your line is open.
Hi, guys. This is Ryan desktop for Steve speed out.
Congratulations on the launch so far I wanted to ask if you could provide any additional detail on sales guidance for the year or at least how growth trends have continued through April and may thus far I have a follow up.
Well, we are again, we're really keen on focusing on our key performance metrics and showing increased quarter by quarter.
I believe fundamentally we've got a very strong launch going now I think those trends will continue.
Today, we're really hyper focused on the great first quarter that we posted again, we're extremely pleased with the nearly or actually more than five times increased revenues to $5 4 million. We were very pleased that new patient start forms grew to $2 48 nearly twice what they were at the end of Q4.
We were extremely pleased with the 277 people on drug patients on drug three times, while we reported in Q4, and we nearly tripled the number of unique prescribers and double I'm sorry, the number of unique prescribers, yes, nearly tripled and we nearly doubled the repeat prescribers.
Now.
I underscore all of those points because again it shows you our launch plan, our trajectory and where we intend to keep this launch going over time. So you can expect quarterly calls to report.
Quarter to quarter.
We will be able to update you on all of these metrics and we'll be happy to provide details in the upcoming quarter on our next call. So all I can say is again strong launch trajectory, we're feeling very strong about where we are very good about where we are.
Great.
Just one more quick one.
Was wondering how patient persistence has been looking like so far.
Finding patients staying on through <unk>.
Our mission and beyond.
Yes.
Well, it's still it's early days, so we don't have a lot of data.
But what we can tell you is this.
Health care providers and indeed.
Many of the sophisticated parts of the patient population are very aware of the data that we published in our advocate pivotal trial.
They're super aware that we demonstrated that <unk> was superior in sustaining remission.
Over the standard of care and.
And durable remission at 52 weeks.
So I think that we have seen a great deal of interest in keeping people on therapy as long as they're benefiting from the drug and tolerating the drug very well.
As against the usage matures over this first year, we're going to see again, what the real world data is telling us, but I haven't heard of any.
I haven't heard of any movement at this point to do only short term therapy in fact quite the opposite most of the discussions we've been having or how long should people stay on therapy again, we quote from our blinded data and our trial, which was a long trial and frankly in a disease like this and we point to any publications in the literature.
Extended compassionate use programs and so on which go out some degree farther than 12 months.
Right now too early to say from real World data post launch.
Alright, Thank you very much.
Your next question comes from the line of Yanan Zhu Your line is open from Wells Fargo.
Hi, Thanks for taking my questions.
I wanted to add my congratulations to a great launch momentum.
Indeed, our Doctor Tech has shown that doctors do like the clock and are satisfied with the youth and great to see that it's reflective of all of these are small numbers in this quarter.
I wanted to ask about the growth question.
From another perspective, I think in January with the number you provided in January there were about 50, new patients start forms.
Given that you now have a roughly 250, new patients start forms for the whole quarter that really means of February and March delivered a phenomenally better a number of greater numbers than January I wanted to ask how are those numbers distributed between February .
In March and if there is a line of increase like for example, 50, then aedes anyway.
<unk> and that will add up to roughly $2 50, but that would keep our lineup increases.
From 80 to 120, and obviously in April it could be on that rate that will be.
Cutting with UBS, great increase so obviously, you're having a site to April numbers.
So I just wanted to overall to ask you.
The growth perspective, because the other possibility is that February and March have similar number both 100 and thats that will point to a different.
Picture, So Tom to any extent possible could you talk about your confidence for continuing to grow this new patient add number. Thank you.
Jonathan Yes, I am confident look our model obviously suggest that we continue to increase quarter upon quarter until we get to peak and make no mistake. I've said this publicly I'll say it again I believe at peak in the United States alone and anchor Vasculitis alone. This drug is <unk>.
<unk> Buster potential.
So obviously, we need to show growth quarter by quarter. The growth will be shown both with patient new patient starts patient on drug paid patient percentage should continue to increase as I said in my remarks until the large majority of folks are on pain patients and those stacking effects that I had.
<unk> two has the two slides in the deck that I showed will contribute to the growth curve as well.
We presented the January data almost out of a I don't know a sense of thoroughness and courtesy to the investment community, we realized that that kind of data can be misunderstood misinterpreted.
So we won't be doing that anymore, we're going to present quarter by quarter data and we believe that's the appropriate way to talk about the launch, but I am very confident again of our model of our growth curves and the fact as you mentioned at the top of your remarks physicians are giving very positive feedback on this drug.
Our patients.
So it is finding its niche and we're going to continue to find ways to make sure. It finds its niche with all appropriate patients as we go forward and that will leave us eventually the blockbuster potential.
Thank you Tom Greater here are those remarks, and I also wanted to ask about <unk> coverage situation of course, you have a great a number or a proportion of patients now.
<unk>.
Paid drug.
Ever.
I was wondering could another growth would be actually a broader payer coverage because even though.
Now you have a 60 patient.
Paid insurance plans.
But doctors may.
I have only given you the patients that they know have good insurance, so there could be a potential if the.
This coverage.
It broadens doctors will have even more patients are two two to two.
To write the drug for because I think even though you have a free month.
One month free supply doctors think more holistically and they think about this as a long term treatment. They probably some of them would start without having the insurance alignment lineup for my question to you is what is the current insurance coverage.
And how do you see that evolve at peak, what kind of insurance coverage could we get.
Sure.
I wanted to add one more small question. There that is have you can.
Pushback that makes the prices too high it seems like that from insurers.
Ya.
Great, Yes, very important issues.
And you're so right.
At this point, what really matters.
Is that physicians not only since the drug is very good and very powerful but there are also having success in getting patients on treatment.
Up the obtaining of prior authorizations and in some cases, where necessary even successful appeal all of that's been going a lot better and we will continue to get smoother as we get through the process of additional payer discussions I mean, we're very pleased that on average, it's taking four weeks or less.
To reach payer approval that's in.
An improvement over the four to six weeks, we noticed in Q4 that I reported at that time, so again that trend is going really well.
Frankly, what we're doing and I think the discussion with payers have been productive.
Again, the initial feedback from physicians suggest that they are getting success in obtaining reimbursement for appropriate patients who meet the criteria outlined in the in the label.
I think that would be youre quite correct. We continue to work months by months with payers, we continue to bring more online each quarter and we will continue to do so and by the end of this year I am quite convinced that we will have the majority of folks covered under paid insurance.
In a pre authorized way with published established.
Your authorization criteria et cetera. So those have been very productive we will be talking more about the numbers as we go forward. This year, but I think we're pretty pleased even with where we are now and getting both coverage and importantly reimbursement for these folks.
Great. Thanks for all the color.
Thanks Julien.
Okay.
Your next question comes from the line of Megan Hoff from Stifel. Your line is open.
Hey, good afternoon, guys. Thanks for taking our questions and let me add my congrats on the profound quarter congrats.
I'll leave a lot of the commentary to you guys and go quick question two questions from me one on the unique prescribers being 281 can you maybe give us a little bit more color on the disposition of those as it pertains to the top specialist in the U S of approximately 400 versus the community specialists of the three.
Number that you gave in your slides.
Secondly, we did a survey and it seems like things seem to be improving with Covid abating, but I just wanted to kind of get a sense for how we should think about as we enter the summer months and COVID-19 seems to be abating, but in flux as different geographies seem to be implementing different policies. So how should we think about that.
Thanks, so much and congrats.
Yeah. Thank you David.
It's a very good set of questions and important questions. What we're doing right. Now is we're clearly trying to focus intensively on those top 400.
<unk>.
But we're really looking holistically at the additional 3000 community specialists that make up 80% of the market overall.
So we're seeing a growing number of unique prescribers and referrals coming from both the academic centers of excellence, where most of the 400 specialists reside as well as the community specialist still so.
It's clearly within that 3400, where refining most of the action right now which is encouraging.
Now you are still right about Covid I mean, the centers of excellence.
In January .
Were largely not access.
In fact, our in person visitations across the board from medical Science, liaisons and sales reps difficult to under 40% or zero percent.
We were able to get that to be above 16%.
In recent times, so we're moving in the right direction and that we believe will open up more of the prescribing potential again at the centers of excellence, where most of the 400 of the Kols prescribed we're seeing a healthy number of those doing very good work with in the Kols.
The top 400, but as we get more access and can discuss with them more directly the program do more medical education, and quite frankly help them understand how to use their offices access to getting patients on drug.
Think that's going to accelerate even more now that those centers that are opening up.
Great. Thanks, so much.
Nick.
Your next question comes from the line of INO Palm Rama from Jpmorgan. Your line is open.
Hey, guys. Thanks, so much for taking my question and congrats on the.
Good early start to the launch here two quick ones. The first one following on the last question. The 281 prescriber can you give us a sense of the breakdown between Nephrologist Rheumatologist other position and then second question on.
On your cash position are you expecting any more milestones in 2022 and what is your current cash position is sufficient to and what does it assume.
Sure thing.
I'll take the first part of the question, but the second part over to Susan <unk>, So with the prescribing physicians.
Breakdown is it's interesting it's about 60, a little over 60% Rheumatologists.
About 25% of Nephrologist I'm going to put an asterisk by this distribution in a moment for rooms to Nephrologists and 15% other where other includes pulmonologists in E&P specialists that kind of thing. So that's shifted a little bit from what we talked about in Q4, but.
Not that much now the thing the asterisk Dave is referring to is that we're finding more and more debt.
A lot of these folks are seeing both by a rheumatologist, who can really be considered their primary care care physician and by a nephrologist when they develop kidney manifestations. So they'll see the nephrologist. They may even decide to get untenable as a consequence of declining kidney function, but also.
In time in the teen care approach, the Rheumatologists will actually write prescriptions.
We're still trying to dig a little bit deeper.
And where the actual motivation for the referrals come from but it is generally speaking again about 80% to 85% Rheumatologists and Nephrologists.
Prescribing the bulk of tap in the US right now and 15% other as regards our cash position of 371 $8 million in cash and cash equivalents I will put that back to Susan can items student.
Thanks for your question.
No.
Outside of the $45 million milestone at <unk>.
And today, they don't expect anticipate any significant additional milestones in 2000, 2010, However will Alexander of course to receive our royalties.
Mid teens to mid twenties on <unk>.
Bye for territory aggregate net down.
In addition, I'll remind you that there are approximately $295 million.
And potential aggregate milestones upon reaching certain annual net sales professionals under our agreement.
So again very well positioned today with the 371 8 million that we reported and believe that our reserves.
<unk> and a very strong position to execute across our commercial and clinical strategy that we discussed today.
Thanks, so much for taking my question.
Thank you again.
Your next question comes from the line of Michelle Gilson of Canaccord. Your line is open.
Hi, Thanks for taking my question I'll add my congratulations on the quarter, it's been great to see the acceleration of launch.
Given the acceleration in patient adds that you've seen.
I am looking at my numbers that looks like.
Little Martha.
<unk>, 5%.
In the rate.
Adding patients on drugs here.
From the January numbers you provided.
Do you expect that trend to really be continuing at the same rate moving into the second quarter and then what are some of the levers you can call to get more patients on drug.
Yes, Michelle where we're doing our level best to.
To make sure we continue to increase quarter on quarter in the important metrics.
We really do want to make sure we get more and increasing new patient start forms quarter by quarter.
And Thats one of the big levers.
We want to make sure the conversion rate I'll come back to that lever in a moment.
Wanted to make sure the conversion rates continues to increase.
Till we get to the large majority were already a majority of 74% make sure they're converting and we want to continue with especially the stacking effect as I alluded to earlier, while we will never have 100% right of paid patients on drug we want to have that again beat a large majority of the large fraction on.
Pay patients and it ought to be and we're going in exactly the right direction. So we're very happy with all of those things building in the right direction.
The levers really involves access I think in two ways and education that comes with access.
So for example.
Yes, I mean, two years of Covid has had a big impact on how drugs are talked about new medicines are.
Marketed education around those medicines, especially in centers of excellence not exclusively but especially so we'd love to be able there's no substitute for in person interactions both with medical science education as well as the ability of sales reps to to talk about the product and appropriate way around the.
A label so we hope that that will start to open up in the meantime, though we've redoubled our efforts to try to meet the physician where they want to be met and how they want to be met so expanded our digital footprint expanded the ways. We can do some of these programs.
<unk> taken and suggestions from the medical community about how to make sure. They are more aware of <unk> and understand what they need to know so access and education on the health care practitioner side is one big lever and we're trying to push and pull that lever as appropriate as we can as we've learned more and more about how to.
To work with a brand new high science.
Products like <unk> in this current environment. The other side is on the patient side and you know it.
Again, using hopefully appropriate ways, not hopefully, but definitely using appropriate methods, we'd love to be able to help patients have better more thorough conversations with their health care practitioners about.
The properties of <unk>, the data and what it might mean for their particular condition. These are really motivated patients in the anchor world. They haven't always had.
Much to organize around frankly, so we're hoping that we can help them again with appropriate educational access about not just their disease, but the mechanism of action of this drug and again, how big might have intelligent conversations with their with their doctors about what.
This drug may or may not mean in our particular case. So that's something we're working on very much and then I guess finally peer to peer discussions, especially in and around major conferences to the extent that again, we can appropriately encourage those or makes us forums available to allow peers to talk to each other.
About their experience with <unk> to date, I think that's going to be very powerful because many of those anecdotes are extremely interesting extremely moving and I'm, hoping we'll start hearing a lot more of that at upcoming meetings like European Renal Association at <unk>, and then of course, a little later on a PRA Im sorry.
At ACR and ASN here in the United States, but.
Access and education, both of the physician and patient side I think those are big levers.
Okay, and what are you hearing about I guess from your your sales organization.
In terms of I guess, the key areas of pushback in the areas that you are having to you I guess.
Work to educate physicians around.
For starting <unk> either that.
That's first.
To getting that first prescription.
Yes, that's a really good question so in general.
The good news is that physicians are very quick to pick up.
That's happening.
What I call therapeutic value proposition.
So.
That's important because they do realize.
And I think the awareness of what we showed in the advocate trial is fairly high not perfect yet there's still a lot of questions around.
Glucocorticoid use.
And how to start <unk>. The answer is if you have a patient that fulfills the description on the label with active severe disease. You started right away you don't have to do anything else with Belgium.
Bells and whistles around.
The other the background therapy use it with us whatever the background therapy as you deem appropriate for that patient. So that's been a set of questions and those have been very good discussions.
Many discussions early on surrounded accessing the medication how do I start.
Do I get it how do I, how long do I use it again those have been very productive discussions and more and more the medical part of that discussion is happening peer to peer which is wonderful.
So I think those are the kinds of things we do.
We were looking at early on we got a lot of very important and productive input. We've acted on that input and I believe fundamentally the path to getting the medication to the appropriate patients has become a lot easier and physicians are understanding more and more that they have a great deal of discretion on how to start.
But the answer is they don't really have to wait and see if they have a patient that fits the label they could get timely us on them right away.
Okay.
If I can squeeze one more quick one in here.
Can you give us a better sense of I guess the percent of patients that are on paid drug that have already been through it.
That's four weeks of free drug.
Well I'll first say this not people say all everyone gets free drug in the first three days Thats not true a lot of people now, especially as things are getting more and more developed a lot of people go direct to paid drug. So that is not an insignificant traction and it's a growing fraction so thats great.
What we have been also reporting obviously is the.
Paid drug percentage, right, which as I mentioned.
A little over 60% now that's up markedly from the end of Q4.
Now as I've mentioned, but it bears repeating that 60% is a good number at this point in the launch a very good number.
Will it ever be 100% no and again, it's a snapshot of a moment in time. So even if every single person got to paid drug to be a paid patients at any given moment you might have referrals that are not yet on a drug you will probably always have some quick start people in the equation, but asset.
A portion of the overall population on our drug they will become smaller and smaller as a proportion and the proportion of paid will get greater and greater such that the percentage will go from now 60 to some higher number quarter to quarter and in fact at steady state should be the large majority of people.
So what we're finding is as you can well imagine even from the.
The inferential evidence to go to 60% paid at this snapshot in time Vivek just reporting from about from over 30% I was misquoted at Q4, but let's just say over 30%.
At Q4, you can see that clearly that the folks are getting on paid drug faster.
Fewer are getting even quick start they're going direct to paid and overall the stacking effect of folks that are in the funnel in the system. If you will and then getting their prescriptions refilled underpaid plans is greater so all of that is to the good.
Yeah.
Okay. Thank you so much for taking my questions Congratulations again on the quarter.
Thank you Michelle.
Your next question comes from the line of Ed White of H C. Wainwright. Your line is open.
Good afternoon, Tom Susan.
Good afternoon Ed.
So I guess most of my questions were answered already.
I just have one follow up on the <unk>.
In person detailing.
You had said it dropped to under 40% in January and up to about 60% recently.
What was it in the fourth quarter.
And.
Do you see that trajectory growing.
In the in the second quarter and beyond.
And then perhaps another question on the sales force.
Do you think the sales force is right sized now.
Or do you think that you need to add more field reps to increase penetration.
Sure thing.
Fourth quarter.
The in person detailing hovered around 50 and somewhere between 45 and 50, then it took a dip in January to below 40%, which was pretty dire.
And then it's gone back up as I said to approximately 60, we hope it's we hope it's continuing to grow it.
It will take time for this health care system to sort out the effects of Covid I don't think were going to go from say 60 to 80 anytime soon that's for sure. There is still working through their staff shortages are still working through other procedures.
As a consequence of the Covid hangover, if you will.
So that's something to remember, but we are hoping that these increased in person visits will result in greater greater efficacy of the ability to educate and get the drug out to people now I had your other question in mind and I blasted, whether it's what was.
The second question.
Sure.
Yes, it's the sales force right.
Thank you.
Forgive me I jotted it down on a piece of paper that I then Barry.
Yeah.
Look we've done we did a lot of work on modeling the field force size prior to launch.
I think that research was very very thorough.
We believe at this time.
Probably well within the range of our research having said that we will we are looking at it literally week by week and when we find the need to adapt if there is such deed we will do so.
But right now I.
I do think.
We're covering the situation very well.
The early returns are very good and again, the Q1 numbers speak for themselves with a fivefold increase in revenue.
Ability to treble, if you will the number of unique prescribers.
Fact that our conversion rates are good the fact that again, where we nearly doubled the patients on drug. So I think we're making good progress we're tracking in.
Excess of the optimistic parts of our model. If you will but we will continue to go where the data take us and if we need to change the size of the field force, we will not hesitate to do so.
Okay, well, thanks for taking my questions.
Thank you Ed.
There are no further questions at this time please conclude.
Mr. Tom.
Well. Thank you so much that was a very stimulating discussion instead of questions I very much appreciate everyone. Joining our call today I very much look forward to talking about our progress at our next quarterly call. You may now disconnect. Thank you and good evening.
This concludes today's conference call you may now disconnect. Thank you.
Goodbye.
[music].
Okay.
Okay.
[music].
Yes.
[music].
Yes.
Okay.
Okay.
[music].
Okay.
[music].
Yes.
Yes.
[music].
Yes.
Yes.
[music].
Yes.
[music].
Sure.
[music].
Yes.
Yes.
Yes.
[music].
Yes.
Yes.
Yes.
[music].
Yes.
Yes.
[music].
Yes.
Yes.
[music].
Okay.
Sure.
Okay.
Okay.
Okay.
Yes.
Okay.
[music].
Okay.
Yes.
[music].
Okay.
Yes.
Yes.
Yes.
Yes.
Thanks.
Yes.
Sure.
Yes.
Okay.
[music].
Yes.
Yes.
Yes.
Sure.
Thanks.
Yes.
Yes.
Okay.
Yes.
Okay.
[music].
Okay.
Sure.
Yeah.
Okay.
Sure.
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
Yes.
Sure.
Yes.
Okay.
Yes.
Yes.
Yes.
Yes.
Yes.
Sure.
Sure.
Yes.
Okay.
Okay.
Yes.
Yes.