Q3 2022 Theravance Biopharma Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Ladies and gentlemen, good afternoon, I'd like to welcome everyone to the <unk> Biopharma third quarter 2022 conference call. During the presentation. All participants will be in a listen only mode. A question and answer session will follow the company's formal remarks to ask a question.
Please press the star key followed by the digit one one on your telephone again Thats Star one wanted to ask a question.
If listening via webcast. Please mute audio on your webcast device before asking a question over the phone.
I will repeat these instructions after management completes their prepared remarks also today's conference call is being recorded and now I'd like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead.
Good afternoon, and thank you for joining that their events Biopharma third quarter 2022 conference call to discuss our business.
Mind, you that this call will contain forward looking statements that involve risks and uncertainties, including statements about our development pipeline expected benefits of our products anticipated timing of clinical trials regulatory filings and expected financial results information concerning factors that could cause results to differ materially.
From our forward looking statements is described further in our filings with the SEC.
With direct your attention to slide for joining me today are Ron to Farnham, Chief Business Officer, Graham at research and development and Andrew Hindman, Chief Financial Officer.
Now turning to slide five.
<unk> Biopharma is unwavering purpose is to create medicines that make a difference in the third quarter marked another major inflection point in the company's transformation we.
We recognized a record quarter of <unk> net sales and profitability and continued to build our intellectual property portfolio Rhonda will review the details.
<unk> opinion leaders in the field presented and philosophy data, demonstrating clinically meaningful and durable effectiveness and MSA patients with neurogenic orthostatic hypotension, and our phase III study $1 70 at the opening session of the 33 International Symposium on autonomic autonomic.
<unk> system, Rick will share, where we are today on <unk> and where we're headed.
We closed the sale of our royalty interest in <unk>.
<unk> elected to royalty pharma for approximately $1 1 billion in upfront cash $250 million in potential milestones and the outer year royalties and royalty pharma invested in the <unk> program and as a result of the deal with royalty pharma, we were able to initiate a $250 million capital return.
Program, which included purchasing Gsk's entire holdings at $9 75, a share and launching a Dutch auction tender offer for up to $95 million of their advanced Biopharma ordinary shares a tender offer that is currently open.
We ended the third quarter with $487 million in cash and zero debt. Andrew will review further financial details all of these actions drive towards our goal of maximizing shareholder value I will now turn the call over to Ron to review you tolerate.
Thanks, Rick.
We are very pleased to share the latest performance update on you tolerate which is the first and only once daily nebulizer long acting muscarinic antagonist or Lama that provides a full 24 hours of control for patients.
It is indicated for the maintenance treatment of patients with COPD.
Turning to slide seven in Q3 net sales of <unk> reached another quarterly high launch to date.
As a reminder, there events Biopharma and via Trust co promote in the U S with our combined sales infrastructure targeting healthcare professional to treat COPD patients suitable for you tolerate.
<unk> Biopharma commercial and medical teams cover the hospital segment and the interest is responsible for outpatient based community health care professionals.
From a financial perspective, we share profits and certain expenses on <unk> in the U S with 65% going to fee interest and 35% of their events Biopharma.
Slide seven shows their events Biopharma is implied 35% share of net sales for <unk> during the third quarter of 2022 of $18 7 million.
I'm also pleased to highlight that you tolerate year over year net sales have increased by 35%.
Overall, Q3, 2022 demand increased 4% from Q2 of 2022 and increased by 22% year over year.
We are also very encouraged to see quarter over quarter growth in net sales given we saw a slight decline over the same time last year.
We typically anticipate seasonality dips in the third quarter due to lower patient census, and fewer exacerbations et cetera, and total prescriptions within the overall maintenance COPD market also decreased slightly in Q3 of 2022 versus Q2 of the prior year.
Looking specifically at that their advanced hospital segment deployment efforts on the right side of slide seven in Q3 of 2022 doses sold exclusively in the hospital setting represented a year over year increase of 45% and an increase of five 2% from.
The previous quarter demonstrating the.
Where hospital volume launched to date.
As we have previously stated the respiratory pandemic impacted the launch phase for <unk> growth in 2020, particularly in the hospital setting.
Since the second half of 2021, we have continued to see significant progress in your core hospital business growth each quarter throughout 2022.
Contributing to that growth has been the team's ability to continue to achieve new key hospital system formulary placements with the total of 605 formulary placements launch to date.
Which have led to now over 200 purchasing accounts and the account number continues to increase weekly.
We believe these wins and forthcoming additional system successes will yield continued growth through the remainder of 2022 and beyond as <unk> will be the first woman of choice in many hospital system due to the growing recognition and acceptance of <unk> once daily value proposition.
And clinical benefits.
Turning to slide eight you can see that <unk> share of the hospital setting increased to 13, 4% in Q3 of 2022.
From 11, 7% in the previous quarter.
Your tolerance quarterly market share in the community setting also increased to 26, 3% through August 2022, which is our latest data point up from 25, 6% in Q2.
As we have noted previously many patients with COPD experienced an acute respiratory episode serious enough to require a trip to the hospital and therefore, the hospital become a key point to assess patients and convert or switch them from their current medicine <unk>.
Data shows that.
90% of patients who receive you tolerate in the hospital setting or discharge with a prescription to continue their treatment in the community, allowing for continuity of <unk> maintenance therapy post hospitalization.
But their events biopharma in theaters teams continue to work collaboratively and effectively to convert appropriate patient teu tolerate during their hospital visit.
Provide support through discharge and enable them to be maintained on <unk> after their return home.
Understanding the <unk> opportunity in the community or outpatient setting. We have also been encouraged by the growth trends seen in the retail script data, where total prescriptions in Q3 have increased 21% year over year and new to brand prescriptions have increased 26 nine.
Percent over Q3 of 2021 with both metrics once again, reaching new quarterly highs launch to date.
As a reminder, while the script data only include the retail channel. They do serve as a useful proxy for the total community use which includes retail plus the dnb or durable medical equipment fulfillment channel, which represents the majority of you Paul REIT community sales volume.
We continue to see the impact of the pandemic on our business received which we believe is leading to improved demand patterns and we'll continue growth acceleration throughout the remainder of the year as the team continues to execute against our strategy, which leverages a hybrid mix of <unk>.
<unk> virtual and digital education, and promotional efforts that effectively communicate the core benefits of <unk>.
Turning to slide nine recognizing there is a sizable niche for your salary within the addressable COPD patient population, which actually represent an opportunity well beyond those patients receiving you tolerate today. We do believe there is significant upside for the brand beyond 2022.
Looking to <unk> longer term commercial potential we are pleased to share that it has been further enhanced by another recently issued U S. Patent that covers a method of use of <unk> and trading COPD.
This new patent expires in 2039 and is now listed in the Orange book.
Lastly, turning to slide 10, the phase four <unk> study comparing improvements in lung function and adults with severe to very severe COPD and suboptimal <unk> flow rates. Following once daily treatment with either <unk> Denison delivered via a standard jet nebulizer or <unk>.
Tropaeum delivered via dry powder inhaler continues to actively enroll patients.
<unk> is responsible for 35% of the cost of the study and are guiding to top line results. The second half of 2023.
I'll now turn the call over to Rick Graham.
Thanks Rhonda.
I'm going to focus on the norepinephrine reuptake inhibitor <unk> in development for the treatment of symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy also referred to as MSA.
MSA as a rare disease affecting approximately 50000 people in United States.
An MSA patients with NIH blood pressure falls went upright owing to impaired release of norepinephrine.
Which leads to debilitating symptoms that can have a profound impact on the patient's quality of life.
Neither of the two approved therapies to treat orthostatic hypotension have demonstrated durable effectiveness and mitigating the debilitating symptoms for patients with MSA.
There exists a significant unmet need and <unk> has the potential to markedly differentiate from other treatment options, thereby offering hope to patients with MSA.
Moving to slide 12, with a unique mechanism of action a single tablet administered once a day, a durable and clinically meaningful symptom effect demonstrated an MSA patients in the phase III study 170, and no signal for supine hypertension ample occitane has the potential to differentiate from other treatment options.
And the Phase III study 170 ample X gene was effective at treating a constellation of Cardinal symptoms associated with NIH.
The benefit to patients with MSA was observed in multiple endpoints in the study, including a nominally statistically significant effect on the orthostatic hypotension symptom assessment score also referred to as you know HSA composite score.
This effect on the HSA composite score was driven by all six symptom scores favoring ample oxygen treatment relative to placebo.
These include dizziness vision impairment weakness fatigue, trouble, concentrating and head and neck discomfort.
The magnitude of change on the IHS, a composite of items was clinically meaningful and the durability of effectiveness was maintained over the length of the 22 week study.
Although we've describe these data previously I'd like to underscore the importance of demonstrating a benefit on a constellation of symptoms for these patients.
By comparison the basis for <unk> approval was based on a change in only one symptom, which was dizziness over a short duration.
In addition to a favorable impact on symptom scores with ample oxygen treatment items on the daily activity composite score also favorite ample ox team.
Largest impact for the MSA patients withstanding for a short time for someone with MSA suffering with symptomatic H, even standing for a short time can have an enormous impact on their quality of life that can mean, the difference of transferring from the bed. So a wheelchair.
The only item that did not favor ample ox channel was walking for a long time, which isn't surprising considering that MSA is a disease with severely debilitating consequences.
<unk> is a single 10 milligram tablet administered once per day, which is beneficial to MSA patients that may have difficulty swallowing as a result of their disease progression.
This is another differentiating factor from current therapies that require multiple tablets administered several times each day.
Patients with NIH are at risk for a dangerous increase in blood pressure, while in the supine position. This is known as defined hypertension.
Two FDA approved therapies for NIH each have box warning on the label highlighting the risk of supine hypertension.
And our safety database of more than 800 patients in healthy subjects with signal for supine hypertension has not been observed with ample oxygen treatment offering the potential for yet another differentiating feature relative to the approved therapies.
Moving to slide 13.
There is an urgency to treat MSA patients suffering with NIH due to the impact on quality of life and the extreme caregiver burden.
Rare diseases and conditions pose a significant economic burden the cost burden applies to direct medical as well as indirect and non medical costs.
I just attended the American Autonomic Society meeting and spending time with opinion leaders clinical investigators and patient advocacy organizations. These messages were repeatedly stated throughout the meeting for the first time the <unk> team Phase III data were presented at a medical conference and was done so the oral presentation by three opinion.
Leaders, Dr. Horatio Kaufman, Dr <unk> and Dr. Roy Freeman and the presentation that totality of the evidence from the Phase III program was highlighted supporting clinically meaningful and durable effectiveness and MSA patients with symptomatic NIH.
Moving to slide 14.
We're looking forward to starting a new Registrational study in MSA patients with symptomatic <unk> study.
Study 197, or Cyprus, and the first quarter of 2023.
<unk> hundred 97 is a 12 week open label eight week double blind placebo controlled randomized withdrawal study with a primary endpoint of change in Ohn's a composite score.
As a reminder, the primary endpoint was agreed upon with FDA during a type C meeting earlier this year we.
We expect the $25 million investment from royalty pharma to fund the majority of the phase III study costs.
I'll now turn the call over to Andrew to review the financials.
Thanks, Rick.
Turning to slide 16, as previously discussed the trilogy royalty transaction with royalty pharma was transformational for <unk> Biopharma.
We carefully structured deal that closed during the third quarter delivers three components of value.
An upfront cash payment of approximately $1 $1 billion in exchange for all of our units in <unk> respiratory company or Trc, LLC, which represented our 85% economic interest in the royalty rates on worldwide sales of Gsk's trilogy Lipton.
Secondly, the medium term value is in the form of potential milestone payments up to an aggregate of $250 million.
These milestones will be paid upon the achievement of various trilogy revenue thresholds throughout the calendar years 2023 through 2020.
In 2023, specifically, we are eligible to receive a milestone payments equal to $50 million is geology global net sales were $2 9 billion.
As a recent point of reference global net sales for the first nine months of 2022 have reached approximately $1 6 billion.
An increase of 34% over sales in the first quarter of.
Of 2021.
And finally, the third component is retained long term value in the form of the return to their events biopharma of our 85% ownership of Trc huge.
Interest in the trilogy royalties, we call these the outer year royalties or <unk>.
The OE or period begins in 2029 metrology sales outside of the United States and begins in 2031 for sales within the United States.
As mentioned in the deal announced in July of this creative transaction structure of monetize as our economics and trilogy will help us and allow us there against biopharma to benefit from significant near term as well as retaining medium and longer.
Of the trilogy royalties, which we expect will continue to benefit from GSK as global commercial execution and lead to continued strong performance of trilogy overtime.
Furthermore, this monetization also removes uncertainty with the receipt of trilogy royalties because of the outer year royalties will be paid directly from royalty pharma to <unk> biopharma and vivo with removed as the manager of Trc LLC.
One key benefit of metrology deal was that it allowed us to pay off our indebtedness with minimal equity dilution and relatively low transaction costs.
At the closing of the deal we paid down the nonrecourse trilogy notes for approximately $425 million and by early August we successfully retired 100% of the.
Company's $230 million convertible note.
These two deals made their events biopharma debt free during the third quarter, while also having sufficient excess cash to design outward screening program outlined on slide 17.
In September our board of directors authorized a $250 million capital return program with the goal of repurchasing as many shares of GBP H at attractive prices.
Alright.
This was an important division.
And we took the time to source input and speak directly with shareholders.
Shareholders and our financial advisors regarding the quantum and the components of our account return appropriate.
We didn't limit to the program.
Firstly with approximately $95 million deployed to purchase GSK is equity stake in their events Biopharma approximately $9 6 million shares at $9 75 per cent per share.
The second component is.
The implementation of the ongoing $95 million Dutch auction tender offer initiated September 28.
It is an open offer and as stated in today's press release, we are extending the length of the offers such that the offer will expire at Midnight, New York City on November 17th 2022.
And for more details regarding the terms of deal.
The contact center.
Finally, the third element of the authorization by the according to repurchase up to $60 million has there been filed permit a shared by initiating after.
After the close of the Dutch tender offer and open market share repurchase program.
This program has the goal to complete the share repurchases Barbara.
Great.
At the completion of the trilogy broadly transaction and the subsequent debt repayments and capital return program their events will have strengthened its balance sheet and reduced equity share materially.
This immediately positions the company for significant future equity value creation as we focus on New York.
Realizations and AMT blocks of the base.
Okay.
Moving to our third quarter financial highlights.
<unk>.
R&D expenses for the third quarter of 2000, and we need to.
$2 million compared with $36 eight.
In the same period in 2021.
SG&A expenses for the third quarter of 2000.
$11 1 million compared to $13 9 million in the same period.
The 21.
These quarterly figures exclude share based compensation, one time restructuring and onetime transaction related expenses.
We ended the third quarter of 2022 with $487 million in cash and cash equivalents.
Please keep in mind that during the fourth quarter of 2022, the company will make a payment of approximately $120 million.
Estimated taxes due associated with the <unk> transaction.
In addition, the ongoing Dutch tender offer could utilize an additional $95 million of cash in Q4.
Moving to slide 19, we are reiterating financial guidance for the full year 2022.
For R&D expenses, we expect to invest between $45 million to $55 million relative to the actuals of $168 million in 2021.
Of this expense range approximately $10 million is nonrecurring spending that was incurred in Q1 2022 to support the wind down of the items that myth and previous <unk> clinical programs.
R&D spending in Q3.
Beyond has normalized and reflects the recurring measured strategic investments in our pipeline.
SG&A expenses, we expect to invest between $35 million to $45 million relative to actuals of $71 million in 2021.
And again, our operating expense guidance.
Share based compensation onetime restructuring and one time transaction related expenses.
In closing on the financial section.
I'll take a moment to reflect that <unk> business has been profitable now two years Q.
Q3, 2020, and during the third quarter of 2022, the brand realized its highest quarter of sales and profitability since launch.
Trends during the current quarter are even stronger.
As a result of the reduced spending in 2022 and the increased cash flow generation from <unk>, we expect to approach breakeven cash flow on a corporate basis and cleaner for me too.
With that I'll turn the call back to Rick Winningham for closing remarks.
Thanks, Andrew Fair events Biopharma is in the midst of our strategic transformation and this quarter has been pivotal.
As we noted the key progress and continue to demonstrate a focus on our strategy on the product and pipeline front with our partner via trust. The team has delivered.
Continued sales growth for Ya <unk> recently, we strengthened our intellectual property around <unk> extending patent exclusivity.
Until 2039.
This quarter we.
Delve further into the <unk> data in a way.
An MSA patients with the world's top opinion leaders and finalize the design for the Registrational phase III trial.
On the financial side with the closing of the sale of trilogy royalty interest to royalty pharma for over $1 5 billion in potential total value early in the quarter, we eliminated our debt and announced that we began to make strong progress on our capital return program.
We're moving forward with focus momentum and determination.
In closing I'd like to thank the <unk> biopharma team for their resilience and their tireless efforts to meet the needs of the patient communities. We serve as we drive forward, we're well positioned to deliver medicines that make a difference.
In the future as well as drive shareholder value. Thank you everyone for your time and participation I'll now hand, it back to the operator for questions.
Thank you Sir once again, if you would like to ask a question you may do so by pressing the star key followed by the digit one digit one on your telephone.
If you are listening via the webcast. Please UN mute the audio on your webcast device before asking your question over the phone if youre using a speakerphone for todays call. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again that star one wanted to ask a question one moment for our first question.
And our first question for today comes from the line of <unk> <unk> from Cowen Your question. Please.
Hi, Congrats on the great quarter and thanks for taking our question, we noticed that UBS Scripps had incorrectly indicated a down quarter, even though previously the trends have been fairly predictive what do you think accounts for the discrepancy and do you expect <unk> to be less.
Going forward or is it just going to vary.
Brandon do you want to take that.
Absolutely.
One thing to certainly keep in mind and I try to corner.
To the script data that's.
Visible publicly it is only inclusive of retail so you have to be mindful that this is a smaller percentage roughly 27% of our total business. So to expect that that downturn or a decrease in retail scripts is reflective of the whole business.
It's not affecting the entire view.
That's really helpful. Thanks, and if I can have a second question, what's your latest estimate on the.
Timeline for reaching cash flow positivity and what are some of the assumptions underlying that.
Yes so.
As Andrew said on an operating basis, while our plans are to approach it in 2022.
We're moving towards.
The cash flow positivity in 2023.
We'll provide more information and details on that when we give our.
Outlook for 2023.
Early in early.
Early in the year, Andrew anything else on that.
No that's about it.
Thank you and congrats again.
Thank you thank.
Thank you once again, if you have a question. Please press star one one our next question comes from the line of Douglas Tsao from H C. Wainwright Your question. Please.
Douglas you might have your phone on mute.
Sorry about that.
I had myself on mute didn't realize it.
Congrats on the progress, especially with your salary.
Maybe just as a question. So this is I think too.
Two quarters in a row, where we've seen the recognized revenue a good deal below sort of the implied sales and I know they are sort of different sort of moving parts in terms of what lets you recognize revenue should we see some normalization as we go into the fourth quarter.
Okay.
Andrew do you want to take that or.
Yes, well certainly.
Doug as we've spoken about in the past, what we book as the receivable do which nets out the collaboration expenses.
The synthetic P&L behind our collaboration with <unk>.
So going forward as we expect revenues of <unk> to continue to grow.
That booked.
In the revenue line for Us should also.
Increase commensurately there are some fluctuations based on the GAAP accounting treatment.
We continue to try to provide a transparent disclosures on but we're also a bit hampered by the the collaboration accounting under GAAP.
Okay. That's a good question.
Yes.
Yes, Doug I'll, just let me add one other point I mean.
One of the one of the aspects here, which which changed.
Sort of the recording was the restructuring.
The removal of our costs.
<unk> of our costs, which which cause a as associated with the restructuring which caused a lower level of reimbursement.
From via Trust Us.
And therefore.
US recording a lower level of.
Of revenue.
So.
It does somewhat depend on a quarter by quarter basis of the cost the cost that <unk> actually.
<unk> on their site prior to the calculation of the synthetic P&L.
Okay, that's really helpful and I guess.
Maybe a question for Rhonda.
And I apologize if it was covered in the press and the <unk>.
Opening remarks.
Jumping between a couple calls but.
How much seasonality do you think there was in the third quarter and should we see some seasonal strength in the fourth quarter, which historically pre COVID-19 typically was often the strongest period for sort of hospital based products.
And I know that you probably is not a hospital on their product.
That's fair, Doug and Thats, obviously, a great question that we continue to try to understand over time with each and every year hopefully without any pandemic impact going forward.
We do anticipate that that.
That seasonality was somewhat reflected in Q3. However, you may have missed this in the commentary we were encouraged you still see the quarter over quarter growth in net sales.
We did see an overall on depth and.
Maintenance COPD market view, which decreased a little bit in Q3 versus Q2. So I do think the seasonality was there and what.
We anticipate relative to that seasonality you have correctly commented on that Q4 is typically where we anticipate that higher volume, whether that's due to increased patient centers, but more importantly that is.
The high point as flu.
And honestly, all thats going on around that relative to other respiratory virus impact on COPD PDP agents and the propensity to have an increase in exacerbations.
Okay, great. Thank you so much.
Yeah.
Thank you one moment for our next question.
And our next question comes from the line of Joseph Stringer from Needham Your question. Please.
Hi, Thanks for taking our questions first one is on the operating cash flow.
Breakeven just curious how much of the.
Potential label expansion of <unk>.
From the <unk> two trial.
Factored into your previous guidance on breakeven operating cash flow and at the <unk>.
Lay in the results.
Thanks.
How you can get guidance on that and then secondly, given the cash balance.
Our current cash balance I understand that you have.
Capital return program in place but.
What are your updated thoughts on any plans for bringing additional.
Preclinical or early stage programs into the clinic or any potential BD activity. Thank you.
Yes, so the previous comments that we've made on both 'twenty two and 'twenty three outlook really didn't include any significant effect from the <unk> study. So the fact that we've.
Increase the size of that study and push the data out until the end of 'twenty three.
No effect on our other on the.
Our previous estimates.
I think.
The fact is that <unk> is in fact the driver.
Of the of the cash flow.
Profile of the company and we do expect as Ron highlighted obviously growth in the fourth quarter and continued growth.
Into 'twenty three.
As both the pandemic recede and we have a greater and greater success with the positioning of <unk>.
In the institutions, but also in the outpatient.
So in the outpatient setting.
Sorry, Joe.
Your second question.
Oh, yes in terms of that given the current cash balance I understand that you have.
Capital return program in place, but just curious.
You can provide your updated thoughts on.
The rest of the pipeline in terms of any potential BD activity or advancing internal programs into the clinic.
Well, we're extraordinarily focused on.
Clinically.
On the Pepper, a completion of the Pepper study.
And the launch and the rapid accrual of the <unk> program.
That's really going to go to take a majority vast majority of our resources and we don't.
It really don't see any other any.
Other programs right now.
Adding to what our cash consumption profile.
But I do think all of our focus here when we turned into 'twenty three is going to be on the.
The rapid execution.
<unk> and Rick can make some comments on that if you'd like.
Yes.
The focus of the team right now like I said in the prepared remarks, just coming off of the <unk>.
American Autonomic Society meeting where we.
Through the presentation by the Kols created quite a bit of energy.
And where we're headed with this program so a lot of energy and effort going into that in the first quarter and the rest of 'twenty three.
Great. Thank you.
Thank you one moment for our next question.
And our next question comes from the line of David Risinger from SBB Securities. Your question. Please.
Yes, thanks very much.
And let me add my congrats as well on all the progress so I guess first.
Could you comment on the potential timeline for the <unk>.
Cypress trials. So obviously slide 14 is quite quite helpful.
But it's essentially five months.
For each patient but.
You're launching it in the first quarter of 2003, when should we expect a top line readout I'm guessing that would be in 2024, but I just don't know.
How how youre thinking about that so that is that is the first question.
And then second with respect to the trilogy target of $2 9 billion for next year I believe that consensus.
GSK expectations are below $2 9 billion for 2023, So just wanted to get any additional color from you on the potential to realize that $50 million milestone. Thank you.
Yes, thanks for the questions on <unk> I think once we.
We roll into 2023, we've got probably 90% of the 90% 95% of the design discussions finished with FDA.
<unk>, we got a little bit.
A little bit of.
Just ticking and tying to do with them and I think once we get that then we'll be able to provide a better a better outlook as to the.
The size of the study and then the size of the study translated into the timing for for finishing the study.
And then filing the filing the NDA.
Rick do you want to make any other comments on that no. That's.
Exactly right.
Then on trilogy, I think trilogy.
The.
The forecast a variety of variety of people forecast trilogy, there are some.
Obviously some.
Tailwind.
Behind trilogy, as we come out of the pandemic I think in particular related to the kind of the COPD business for trilogy getting back on track.
I'd say, that's certainly something to watch.
As is the continued asthma.
Gross and then the.
Potential for the biologics that.
That are built on top of controller medicines that as they as they continue to execute their promotional strategy may in fact drive more patients through trilogy on the way.
Two two biologic, but.
Those are sort of the factors in the market that can affect trilogy, whether whether it gets to $2 nine and we get 50 million 50 million dollar and we'll just we'll just have to see I think importantly for us is that.
The number that gets us $50 million in 'twenty. Three is also the number that gets us 25% and 24 so.
If we if we were to come up short in 'twenty three.
Charles you were to come up short then I think dramatically probably increases the probability of that.
And of the 24 milestone.
I don't know Andrew anything else on that.
The only other comment I would make is that given the outperformance versus consensus on a quarterly basis, we've seen the consensus.
Continually increase after GSK reports their quarterly earnings so yes.
I think youre right David that the current consensus is just for next year is just over $2 4 billion.
And we expect that to continue to have upward revisions based on the performance that GSK is producing.
Thank you.
Thank you. Thank you.
One moment, while we have our next question.
And our next question comes from the line of Vikram <unk> from Morgan Stanley . Your question. Please.
Hi, This is will on for Vikram.
And congrats on the progress this quarter.
I have two questions on <unk>.
First is around the Cypress study.
Additional color you guys can provide on the profile of MSA patients you intend to enroll.
And what the expected pace of enrollment might be would be terrific and secondly, if you could just remind us about what the IP estate.
On that molecule currently is and what the duration of protection that is provided by it that'd be very helpful. Thank you.
Rick.
So I'll take the first part Rick if you want to take the second part around IP. So with regard to the profile will what we're purposefully doing is designing the cypress study to be as close to the prior 170 study as possible and as a reminder, which is 38 patients in the 170 study we saw.
Thought that there was a nominally statistically significant effect on HSA composites, which will be the primary endpoint for the new study the changes that we're making to the study are relatively minor but their data driven. So for example, when you look at slide 14 of what we presented today are open label period is 12 weeks in a randomized withdrawal peer.
It is eight weeks in the prior study that was 16 weeks and fix so we've just made those sorts of adjustments, but for the most part we're targeting the same patients and with a relatively similar study design.
With regard to enrollment rate too early to comment on that at this point. We're in the process of doing detailed feasibility no I think one advantage for us because we have some significant experience here, we had a relatively large phase III program previously.
That allowed us to identify really top performing in top tier sites that we've established and built relationships with those sites. So we will be going back to those sites.
Got those relationships established we have data that seem to be compelling and interesting so more to come on the enrollment rate as we get the feasibility.
And then on the IP for <unk>.
Okay.
I think with.
Composition of matter and patent term extension associated with it that's probably looking at 2035, and then a use patent for <unk>.
In the treatment of MSA patients. So I think it's 2037.
Okay, that's very helpful. Thanks.
We're also likely obviously because it is MSA.
To pick up to pick up an orphan drug designation so.
Thank you.
One moment for our next question.
And our next question comes from the line of Brian Kearney from Baird. Your question. Please.
Alright, Thank you for taking my question guys.
One question on the new updated Orange book IP for your power, it's pretty big extension opportunity I think the latest patent after the one that has just been issued expires in 2031. So I was hoping you could talk about that $5 31 patents thats the basis of this extension versus the other method of use patents you have for COPD.
Yes.
Yes, absolutely.
Yes, sorry, that's a great question Brian .
The.
Information from the patent comes it comes from the tougher.
For one study, obviously that we did without getting into just infinite number of details obviously addresses.
Pepper.
Peffer F&B won an FTC.
Which.
Yes.
The observations that.
And that we made in the in the <unk> study.
Novel and in fact form the basis for the.
For the for the US patent at those those patients are in fact, COPD patients and they are.
Sort of in and our.
And in our Phase III program.
That such that the.
The patent really is covers an integral group that is resident in the in.
In the indications section of the label.
Great and then if I could just ask a second one on the on the <unk>. Two study can you just released.
The sample size increase sort of changes those assumptions.
Rick you want to just reviewed.
Yes sure so.
Sample size assumptions are on slide 10, and what we say is a potential to increase the sample size from $3 66 to 48 now that was based on a protocol pre specified.
<unk> sample size re estimation and the reason, we did that which by the way is very common to do in terms of the blinded sample size re estimation. The reason we did that is because we had.
Relevant information from the prior Pepper study, but it was relatively limited information for example, the primary endpoint of that study was day 30 for <unk>, one and the second study or to the primary endpoint is.
Change from baseline F&B, one at day 85, so where we're at.
The GAAP loss was does the variability, which we use to estimate the sample size translate from day 30 to 85, well it turns out in a blinded fashion. The variability was a little bit higher at day 85, then we could have predicted based on the data <unk> data that we have some pepper one so that was the basis for the increase and again no. There is no read into the outcome.
The study here. This is just simply based on factors that determine sample size.
Alright, thank you.
Thank you.
There appears to be no further questions at this time I'd like to turn the program back to Mr. Winningham for any further remarks.
That we can't.
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I'll, let you.
To answer the questions that.
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