Q4 2022 Cara Therapeutics Inc Earnings Call
Speaker 3: Good afternoon, my name is Josh and I will be your conference facilitator. I would like to welcome everyone to the CARA Therapeutics fourth quarter and full year 2022 financial results and update conference call. All lines have been placed on mute to avoid any background noise.
Speaker 3: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and the number one one on your telephone keypad. Please be advised that this call is being recorded. I would now like to introduce Matt Murphy, CARES Manager of Investor Relations. Mr. Murphy, you may begin your call.
Speaker 4: Thank you operator and good afternoon.
Speaker 4: Just after market closed today, Cara issued a news release announcing the company's results for the fourth quarter and full year 2022. Copies of this news release and the associated SEC filing can be found in the investor section of our website at www.caratherapeutics.com.
Speaker 4: Before we begin, let me remind you that during the course of this conference call, we will be making certain forward-looking statements about CARA and our programs based on management's current plans and expectations.
Speaker 4: These statements are being made under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties.
Speaker 4: Actual results may differ materially due to various factors, and CARA undertakes no obligation to update or revise these statements publicly as a result of new information or future results or developments.
Speaker 4: Investors should read the risk factors set forth in CARIS 10-K for the year ended December 31, 2022, and any subsequent reports filed with the SEC.
Speaker 4: With that said, I'd like to turn the call over to Chris Posner, KARAS Chief Executive Officer. Chris?
Speaker 4: Thanks, Matt, and good afternoon, everyone. With me today are Ryan Maynard, our Chief Financial Officer, and Dr. Joanna Consalves, our Chief Medical Officer.
Speaker 4: First, I want to give a quick overview of 2022 and our significant progress executing our strategy to become the world leader in the treatment of chronic paritis. Then I will share the latest insights into the Corsoova injection launch and the progress in our development programs for oral diphthalatekeflin.
Speaker 4: Ryan will follow with a financial update. After that, we will be available to take your questions.
Speaker 4: The U.S. launch of corsuba injection in the second quarter of 2022 rang in a new era for the treatment of chronic paritis and propelled Care Forward in our journey to be the category defining leader in this condition. Chronic paritis is often a severe.
Speaker 4: intractable problem for patients in a wide range of diseases, and it is underserved by currently used treatments.
Speaker 4: In light of this lack of treatment options, chronic paritis remains underreported, even though it can have a significant negative impact on the quality of life of millions of patients. We are committed to enhancing the awareness of this disease and improving the treatment protocols for patient care.
Speaker 4: so that our novel science benefits the most patients possible.
Speaker 4: Over the past year, we have made great strides in translating our mission into action and firmly establishing our two core franchises in the Frology and Dermatology.
Speaker 4: The launch of Corsoova Injection created the foundation for our nephrology franchise. Together with our commercial partner, CSLV4, we are laser focused on driving the trial and adoption in the U.S. and in countries around the world.
Speaker 4: Moreover, we are expanding this differentiated and promising nephrology franchise with oral diphelic heflin and the late stage program in non-dialysis dependent CKD patients.
Speaker 4: Enrollment is progressing well and we continue to target the top-line data release for the second half of 2024.
Speaker 4: Switching to our dermatology franchise, enrollment in our late-stage atopic dermatitis program is progressing well and we continue to track to our internal readout in the second half of 2023.
Speaker 4: The positive phase 2 results of oral diphthalatekepline in notalgia peristetica not only confirmed our hypothesis that diphthalatekepline can target pruritus independent of the origin of itch, but also created a distinct opportunity to complement our program in AD. This gives us a unique one-two punch.
Speaker 4: to build a truly one-of-a-kind dermatology franchise.
Speaker 4: We are excited about the launch of our Phase 2-3 program in NP and the recognition from the New England Journal of Medicine which recently published our Phase 2 results.
Speaker 4: Now, let me provide some more details on the quarter and the progress within the strategic priorities of our two franchises. First, on the launch of CORSUVA injection, we are making meaningful progress in the U.S. For the fourth quarter of 2022, net sales for CORSUVA injection were $2.3 million.
Speaker 4: translating into $1.1 million of profit recorded as revenue to us. And wholesaler shipments to dialysis clinics totaled approximately 21,000 vials.
Speaker 4: This quarterly performance is reflective of the unique launch dynamics in this ecosystem and represents a transition from the stocking and trial phase to the adoption and demand-based performance phase.
Speaker 4: After the initial inventory building at both the wholesaler and certain clinics in the second and third quarter, we have started to see inventory being drawn down and orders accelerating. We are pleased to see this momentum continuing through the first two months of 2023.
Speaker 4: Equally as important, feedback on CORSUVA from providers and patients has been highly positive and we continue to hear that CORSUVA is delivering on the promise it demonstrated in the clinical studies and performing as we expected.
Speaker 4: Let me break out the different dynamics at the various DOs.
Speaker 4: Starting with Fresenius, we are pleased with the commitment from FMC to the long-term success of CORSUVA as reflected by both the addition of the FMC field force in the promotion of CORSUVA and the push for its rapid adoption.
Speaker 4: In the third quarter, with patient care as their number one priority, Fresenius took a non-traditional approach and stock product in most of its clinics to facilitate trial across its network.
Speaker 4: While this strategy demonstrates FMC's belief in the unmet medical need in CKD-associated pruritus and confidence in Korsova's value proposition, it created an atypical inventory dynamic. In the fourth quarter, we saw steady growth in the number of FMC clinics in the United States and in the United States.
Speaker 4: utilizing their initial inventory and placing reorders, a clear reflection of their move from trial to adoption.
Speaker 4: Simply put, and what is very encouraging, when clinics start using CORSUVA, there is a strong buy-in and these clinics become repeat customers.
Speaker 4: This positive trend has accelerated in 2023. Encouragingly, during the first eight weeks of this year, clinic reorders from the wholesalers have already exceeded the entire FMC order volume in the fourth quarter of 2022.
Speaker 4: Looking ahead, we expect to see continued growth in the number of FMC clinics utilizing their inventory and reordering.
Speaker 4: And as trial shifts to adoption across the FMC network, we expect most of the inventory at the clinic level will be utilized by mid-2023.
Speaker 4: At DaVita, we see steady growth in the number of clinics ordering Corsoova. For those clinics that have purchased Corsoova, we continue to see a high reorder rate, which clearly suggests a positive experience with this product. We continue to work with CSLV4 on top-down and bottom-up initiatives.
Speaker 4: the market represents less than 20%, we feel that the progress at these organizations underscores the positive experience of patients and providers with CORSUVA.
Speaker 4: less than 20%, we feel that the progress at these organizations underscores the positive experience of patients and providers with Corsuva. To summarize,
Speaker 4: Given the launch and inventory dynamics during the first few quarters, we expect a more normal uptake curve for Cursuva to emerge mid-2023. More specifically, we anticipate that the future sales and vials shift to dialysis clinics.
Speaker 4: will not be related to any significant stocking at the wholesaler or clinic level. However, until the remaining inventory at the clinic level is depleted, it is important to emphasize that it is the combination of inventory drawdowns at the clinics and new wholesaler shipments to clinics.
Speaker 4: that together represent true patient demand. Overall, we are encouraged by the progress in the U.S. launch and we remain confident in the long-term potential of CORSUBA. On the international front, the rollout of Caprovia in Europe continues to gain momentum. Launch is in the first four countries, Austria, Germany, France, and the United States.
Speaker 4: Germany, Sweden and Denmark are progressing well and we expect most of the other countries in Europe to come online in 2023.
Speaker 4: The initial feedback is very encouraging and in line with the provider and patient testimonials we have received in the US.
Speaker 4: Furthermore, all four of the access consortium countries, Canada, Australia, Singapore, and Switzerland, approved the product in 2022, and we expect launches in these countries to commence once reimbursement is secured in the next 12 to 18 months.
Speaker 4: Based on the regulatory submission in the second half of 2022 and positive interactions with the PMDA, we continue to expect a regulatory decision in Japan in the second half of 2023. As a reminder, if the product is approved in Japan, we will receive a milestone payment from our partner, Maruishi.
Speaker 4: The JV of CSL V4 and FMC also recently announced signing a long-term exclusive licensing agreement for the co-development and commercialization of CORSUVA with Wind Health in China. We are very excited by this positive development and we look forward to work starting with you, Dr.
Speaker 4: payment mechanism for drugs with TADAPA designation post the TADAPA period.
Speaker 4: We generally believe that the different payment mechanisms outlined in the RFI would provide adequate reimbursement for Cursuva post the expiration of its Todapa period. We further support the concept of linking drug payment to drug utilization in appropriate patients. We continue to work closely with other stakeholders to support CMS.
Speaker 4: in its decision-making process.
Speaker 4: And while we do not have clear visibility as to the exact timing of a final decision regarding the post-to-DAPA reimbursement mechanism, we continue to hope for a substantive and positive update from CMS during this year's rulemaking cycle.
Speaker 4: not have clear visibility as to the exact timing of a final decision regarding the post-ADAPT or reimbursement mechanism, we continue to hope for a substantive and positive update from CMS during this year's rulemaking cycle. Moving on to our pipeline.
Speaker 4: We are building two therapeutic franchises through our work to expand the utility of diphthalatekeflin.
Speaker 4: Last year, we launched our phase 3 programs of oral diphthalate kelplan in both paritis associated with non-dialysis dependent advanced CKD, as well as atopic dermatitis. Enrollment in both programs is progressing well and we expect top-line results for the CKD program in the second half of 2024.
Speaker 4: and for the AD program in the first half of 2025. We continue to track to the second half of 2023 for the internal readout of Part A of the Phase III KIND-1 study.
Speaker 4: Additionally, last year, we reported positive data from our Phase II trial of oral diphelic keplin in notalgia peristatica. In the fourth quarter of 2022, we had a positive interaction with the FDA, which cleared the path to initiating our Phase II-III program in MP.
Speaker 4: Like our AD program, we designed the NP program with the goal to enhance our operational efficiency, to advance the studies as rapidly as possible, and to maximize the potential for success.
Speaker 4: We expect the internal readout of the dose finding portion of the COURAGE I study in the second half of 2024 with final top line results for the program in the first half of 2026.
Speaker 4: of the dose finding portion of the COURAGE I study in the second half of 2024 with final top-line results for the program in the first half of 2026. In conclusion...
Speaker 4: We believe 2022 was a pivotal year for Cara. Our progress laid the foundation for sustained growth and value creation for our stakeholders and the promising future of our company.
Speaker 4: On the Corsoov injection launch, we expected variability and a fluctuating dynamic over the first year of launch. We are seeing positive trends in product uptake and remain confident in the long-term potential of Corsoov injection.
Speaker 4: We have three late-stage programs underway demonstrating significant progress toward establishing our two therapeutic franchises and maximizing the potential of dactylic effluent.
Speaker 4: I would now like to turn it over to Ryan for additional details on our fourth quarter and full year results. Over to you, Ryan. Thank you, Chris.
Speaker 5: While I'll be focusing my commentary primarily around the fourth quarter, the full results for 2022 can be found in our press release issued today after the market closed.
Speaker 5: Total revenue was $3.3 million for the three months ended December 31, 2022, compared to $0.8 million for the same period in 2021.
Speaker 5: Revenue this quarter consisted of 1.1 million of collaborative revenue related to our profit from CSL V4s, net sales of course, Sula injection to third parties.
Speaker 5: and $2.1 million of commercial supply revenue.
Speaker 5: We also recognize 72,000 of royalty revenue this quarter, representing our royalties from the net sales of Capruvia in Europe in the fourth quarter of 2022.
Speaker 5: I also want to highlight that for the year we have now recognized a total of 16.6 million of collaborative revenue related to our share of the profit of Corsica injection sales.
Speaker 5: Cost of goods sold during the three months ended December 31, 2022 was $2.1 million and relates to our commercial supply shipments of Corsoova injection to CSLV4.
Speaker 5: Research and development expenses were $26 million for the three months ended December 31, 2022, compared to $22.8 million in the same period of 2021.
Speaker 5: The increase in R&D expenses is due to the increased clinical trial spend related to our two phase three clinical programs that were initiated in 2022.
Speaker 5: General administrative expenses were $6.4 million for the three months ended December 30, 2022, compared to $11.5 million in the same period of 2021.
Speaker 5: The reduction in GNA expense was due to a decrease in stock-based compensation in the fourth quarter of 2022 as compared to the same period in 2021.
Speaker 5: Stock-based compensation in 2021 included costs related to the modification of certain equity awards to our former CEO .
Speaker 5: Cash, cash equivalents and marketable securities at December 31, 2022 totaled $156.7 million compared to $236.8 million at December 31, 2021.
Speaker 5: The decrease in the balance primarily resulted from cash used in our operating activities.
Speaker 5: Now, we expect that our current unrestricted cash and cash equivalents and available for sale marketable securities are sufficient.
Speaker 5: to fund our currently anticipated operating plan into at least the first half of 2024.
Speaker 5: This kind of assumes all the spend related to our three late-stage clinical development programs and Corsula Revenue Profit Chair contribution.
Speaker 5: I will now turn the call back over to Chris.
Speaker 4: Thanks Ryan. I want to again emphasize how confident we are in the year ahead giving the momentum of the Corsuba launch and the significant progress in our pipeline. We believe that Cara is well on its way to becoming the world leader in the treatment of chronic parietas and we look forward to providing you additional updates in the near term.
Speaker 4: With that, Ryan, Joe, and I will be happy to take your questions, so I could turn it back over to Josh and we can open up the call for questions.
Speaker 3: Thank you. As a reminder to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To ask a dryer question, please press star 1 1 again.
Speaker 3: Our first question comes from Sumanth Kulkarni with Canaccord Genuity. You may proceed.
Speaker 6: You have none. Thanks for taking my questions. I have two. Given the significant volatility associated with Kursu and the way the supply chain dynamics work, could you give us roughly what percentage of the 207K while there so that we're shifting with 2022? You might have already been used. They have a fraction on that.
Speaker 4: Hey, Simone, it's Chris. So, of the 207, I mean, what we look at is we have 20,000 vials that were ordered by the clinics in the Q4 of 2022. What I could tell you is roughly 180,000 of those vials were shipped to Fresenius in Q3 as we reported in the Q3 call.
Speaker 4: But any sense of how that might translate to actual patient files used during the year? Yeah, so if you look at, if you break it out by customer segment, so if you look at Fresenius first, so Fresenius over the first three quarters, you know, Fresenius primarily took in $180,000
Speaker 4: percentage did a very atypical thing in terms of stocking. So what we expect is probably by mid-2023, you would start to see a more normal, I call it more normal, demand-based trajectory.
Speaker 6: Got it. And then a question on the Tidapa part. We understand that CMS currently requires a reporting percentage of a while that has been unused. What do you think that data might be able to be used for, if at all? So Samar, if your question is wastage of a while,
Speaker 7: You're welcome, Samar.
Speaker 8: Yah...
Speaker 3: Our next question comes from Joseph Stringer with Needham & Company. He may proceed.
Speaker 9: Hi, thanks for taking our question. We're just curious if there's a point in the future where you would be able to report IV COSU's TRX or scripts written instead of file shipped.
Speaker 4: Hey, Joey, it's Chris. No is the short answer. Think about this as almost like a Part B type drug. So we get data from the wholesalers of what they ship to the clinics. And typically, Joey, as we've talked about before, this does represent...
Speaker 4: the best proxy for demand because we do know that clinics don't typically hold inventory unless they have a patient already on the product. You know, as I mentioned, this case is very different given this unique ecosystem that we're in, namely with Fersenias where, you know, they in Q3 took on a significant amount of product to activate their entire network.
Speaker 4: they invested in that strategy. So you know like I said before by mid-2023 especially in the Fersenius side you know that metric that quantitative metric that we report it's unusual right now but it'll be really the best proxy for patient demand as we get to mid-2023 for Fersenius. The rest you know DaVita and the midsize and independence.
Speaker 4: it's still the best proxy for demand because we know they did not employ the same strategy FMC did in activating their network. It's more traditional.
Speaker 9: Thanks for the color and thanks for taking our question. Thanks, Jordan.
Speaker 9: Yeah, thanks for the color and thanks for taking our question. Thanks, Joe. Thank you.
Speaker 3: Alright, that's question goes from Annabelle Somimmi with people you may proceed.
Speaker 10: Hi, thanks for taking my question.
Speaker 10: Going back to the timing of Fresenius getting through their inventory, I guess what gives you confidence that it's going to be out, their inventory is going to be used by mid-2023? Are you getting, I guess we must have some.
Speaker 10: Order rates from them or reorder rates from them. So is there any sense? You can give us of what their reorder rates might be And are we going to be getting any more granularity on that going forward? And I guess the second question is Just now that patients have been on for a little bit longer. I know the KOL that you had at your capital market today
Speaker 10: had discussed some patients being on therapy persistently and others taking drug holidays. Are you seeing any more of a pattern there and how patients are using the treatment? Thanks.
Speaker 4: Hey Annabelle, let me tackle the first one. I'll address maybe the second one but maybe I'll have Joe speak from a medical standpoint. So the first one in terms of our confidence in Fersenius and the drawdown of their inventory, let me just let me as I look at Fersenius, you know their medical office really understands the effectiveness of this drug and its impact on patients.
Speaker 4: And I mentioned in my prepared remarks patient care is their number one priority and they employed this this really atypical strategy to facilitate trial and adoption which gives us confidence is that in Q4 many of their clinics in their network are indeed utilizing the product and a number of these clinics Have started to reorder
Speaker 4: And what's really encouraging is when clinics start using Corsoova, there's a strong buy-in. So what we've seen, Annabelle, is that the trends were very encouraging as we exited Q4 of 2022, and they've accelerated in Q1, and we see that in their reorders. We'll constantly track that, but those trends give us a lot of confidence that by mid-year, a lot of that inventory would have been.
Speaker 4: I also look at, I'm a quantitative guy, I look at the proof point around reorder rates, and the majority of the clinics that start a patient on Corsoova reorder. There's a strong buy-in, so we see very high reorder rates, which to me is the metric for satisfaction from a provider and patient. Medically, Jo, let me turn it over to you. Yes, thanks, Annabelle. Yeah, just as a reminder—
Speaker 2: Chris mentioned we haven't really seen anything differently really to date.
Speaker 8: Okay, great. Thank you. Thank you.
Speaker 3: Our next question comes from David M. Sellen with Piper Sandler. You may proceed.
Speaker 9: Thanks. So, just in looking at your cash runway guidance that gets you into the first half of 24, I'm just trying to do some basic math here and I guess what I'm sort of coming to and just wanted to run this by you is that...
Speaker 9: fork or suva injection for 2023. I'm not saying that it wouldn't imply growth, but it's still pretty modest.
Speaker 9: Is that the right way to think about it? And if it is, then the question is, how is it just?
Speaker 9: inventory that's really explaining what's happening here. In other words, are you caught off guard by
Speaker 9: by where demand is relative to perhaps where you thought it might be ahead of the launch. So just wanted to get a sense of your thought process there and is my basic thinking about it correct. Thank you.
Speaker 5: Hi David, thanks for the question. This is Ryan. So a couple of things on the runway guidance. First of all,
Speaker 5: it's consistent with the guidance that was given at the end of Q3. So that was, as well, first half of 2024. And you're correct.
Speaker 5: the expectation that is in this very conservative guidance is definitely a conservative haircut both on our own internal projections as well as the projections of our partner. So we're still in the first year of launch. I wanted to be consistent on this guidance.
Speaker 5: but I wouldn't look into anything on that math that you're doing as it relates to our expectations for CORSUVA. As far as your second question on, I'll pass that to Chris. Yeah, David, on your second question, I mean, we expected variability. I mean, we're within the first year of launch and...
And this is a unique dialysis patient ecosystem. And we did expect some variability. You know, we'll be truthful here in that, you know, what was surprising was FMC's Q3 strategy with that large purchase, as we mentioned on the Q3 call. I think I used the word FMC.
pleasantly surprised too because you know this strategy what they invested in was to activate their entire network. It certainly shows their commitment and I do know that their executive team is fully committed to getting this product to patients that are appropriate for it. So that was a surprising part but
You know, what's really important to point out is that we're seeing the fruits of that now. We're seeing the acceleration, you know, as we exit at Q4, and we're actually seeing it accelerate even more in the first eight weeks of Q1. It's actually nearly double than what we saw coming out of Q4.
concerned about the magnitude of the inventory drawdown? I mean, in other words, I guess I'll ask the question differently, if demand was indeed robust, would we have seen this kind of magnitude of the inventory drawdown?
Well, I mean, so the question, maybe I'll phrase it a little differently if you don't mind. Should we have expected this to burn down quicker in Q4, essentially, right? I mean, that's kind of what you're asking is this one a time in a way, right? So, you know,
What I'd say to that, David, is that we are building a market from scratch. And this market has many stakeholders, as you know, right? That in clinic, dialysis care teams, nephrologists, and their affiliated nurses and patients. And I will tell you, CSLV4 and their JV partner, Fresenius, namely, have forgotten that their
characteristics in terms of staffing, how they adopt a product, and some tend to be a little in front of others or a little behind others. But bottom line is I will say the FMCC suite is putting product on the shelves and they're making it available to get it used. And the trends are really encouraging towards the end of Q4 and they've accelerated.
Got it, David.
Thank you.
Our next question comes from AJ Velasquez-Mao with Jefferies, you may proceed.
Hi, y'all. This is AJ for Chris. So you mentioned that you're still seeing more clinics come online and that reorder rates are growing. Could you give us either an order of magnitude on those rates or some kind of percent capture? You said you actually...
Hey, AJ, it's Chris. So what I can say is the first eight weeks, and we said this in the prepare remarks, are certainly more than all of Q4. Won't give a range yet, but I will say also in percentius, namely, and we look very closely at percentius in terms of them pulling through, you know, the first eight weeks of this year is significantly more than the eight weeks ending December 30th.
of 2022. So we're really encouraged with those trends.
Okay, and I have one kind of follow-up question. So I feel like it's been a while since you've mentioned the NKF educational campaign. Do you have any visibility on what kinds of engagements you're getting there in terms of awareness or advocacy? Yeah, it's actually the NKF is just one of a couple campaigns out there right now.
So, you know, the KPIs that we look at are very positive. If you look at the awareness numbers among the providers, it's very high. And what we're seeing from a patient standpoint is very good advocacy building from the patients. You know, CSLV4 is partnered with most of the patient advocacy groups.
programs are initiated to raise the awareness. And I mentioned, you know, one of the things, AJ, and I think you and I spoke about this before, that's a critical lever in terms of, you know, driving the trajectory of course of injection. You know, I look at multiple stakeholders in terms of, you know, in dialysis clinic care teams, dialysis care teams, nephrologists, and patients, and CSLV4 has done a very, very good job.
across the board on each of those levers. And I think that's why you're seeing this acceleration and demand following the purchase, the large purchase from Fresenius and Q3.
Gotcha. Thanks, Chris. You got it.
Gotcha. Thanks Chris. You got it. Thank you. Thank you.
Our next question comes from Oren Livnet with HCWANewright, you may proceed.
Thanks. I'm going to keep along the same track as most people are asking, you know, for obvious reasons. You know, this inventory work through at the site level isn't totally surprising to me, but of course we're all just trying to figure out some way to gauge or to understand what your level of understanding is around the demonilled account. So,
demand side of this equation, right? What are you, what information do you get from CSL with regards to volume, including what's still sitting at the wholesaler in terms of vials?
maybe what's sitting at the center level, which that sounds more difficult to ascertain, and or just prescription levels. Because obviously we can say, hey, the first half of this year, we're gonna keep working through, but if we don't know how much is there to begin with, how much we're working through, and what the underlying pull through demand is, we have no idea what the exit rate is coming.
orders being, well orders from the dialysis clinics from the wholesalers and those are the critical metrics. So we have visibility into what's at the wholesaler and we have visibility to what clinics order. You're right, what's hard is the visibility at the clinic level from the stocking.
to your question as you model this, as we think about this, and we think about this with our partner, we look very closely, and I'm going to speak specifically to Fresenius, we look very closely at the orders, the reorder rate from Fresenius. And what gives us a lot of confidence is that we are seeing that accelerate in Q4, and then we're seeing that even more quickly accelerate in the first eight weeks.
So we have visibility, but you mentioned also prescriptions. I mean, we don't get that data, obviously. Like I mentioned earlier on the call, you know, this is a, you know, this is a buying bill sort of market in a way. So we look at orders.
And yeah, so I think that was the last part of your question. I mean, someone knows how many boxes or vials are still sitting at the wholesaler per an inventory management agreement, I would assume, right?
Of course. Okay, but you want to tell us that. Well, no, I mean, but what's really important is that we said by mid-2023 we expect what I call a more demand-based trajectory, meaning demand will drive shipments from the wholesalers. They'll converge.
Right now we have to work down the inventory of percenties. But I view the percentage thing as a real positive. They took this very atypical approach because they believe in the product and believe in helping their patients and they really want to make this available across their network. And they invest it significant time and dollars in risk.
and that was in Q3. Now we're seeing that drive-through in Q4, and we're seeing that accelerate in the first part of Q1. Understood. Also, on those 21,000 vials that were ordered this quarter on top of inventory being worked through, can you characterize?
Who ordered those? I mean, I think you said there were reorders from Fresenius Centers. Can you give us any mix on where those went? Yeah, I would say the 20,000 or 21,000, you know, obviously it's a combination of reorders from Fresenius and also, you know, we have two other customer segments, right? We have DaVita.
I understand you're still hoping to hear something substantive this fall, it sounds like. Regardless of what that outcome is in terms of what methodology they use, I think that the platform will carry no information about each of the, these...
Do you have an idea on when the timing of that should kick in? Because I guess we only have an N of 1 to go on, and they got three years. And it looks like your two-year anniversary of your approval, at least, sort of takes you already a third of the way or more into 2024, into year three. So do you think there's a good chance you're going to have to DAPA pricing through 2024? Yeah, I'm not going to put a probability on that.
to change that appropriately to get it outside the bundle to have an innovative product available for patients afterwards. So we're encouraged to where we are with CMS, but yeah, I don't have a probability I can give you on the third year. There is an N01. It's certainly something that we would be with our partner CSLV for talking about at some point.
But right now the focus is on working with CMS on changing the policy. Got it. Well, thanks for the help. Appreciate it. All right, Oren. Thank you. And as a reminder, to ask a question, you will need to press star 1-1 on your telephone. All right.
volume level to generate good pharmaconeconomic argument for the pricing levels that have been so far established during this DAPA window. And I think what Oren was getting at, your DAPA could run out in April 2024 with your cash runway to first half 2024. So
It seems like it's a really critical aspect of the longevity of this launch for the IV. And then are there any milestones you anticipate realizing in 2023?
Hey Jason, it's Chris. I'll tackle each of those. I'll go in order, how about that, make it easy. So your first question on urgency around utilization. I would say as a commercial guy at heart, regardless of the depth, there's always a lot of urgency in.
getting a product to patients as fast as possible. I do agree with you though that to DAPA, you know, heightens that sense of urgency, but I'd also remind you, we're still within the first year of launch. So, you know, I know CSL V4 and their JV partner for Seneas has every inclination. We see these very encouraging trends that I'm encouraged.
throughout the year that this is going to be a really, really good trajectory that we're going to see in terms of utilization. The second question was around how important is Todapa and when it expires the durability of the sales. I've always said that they've taught me how to increase hydration Video Damages. London & Marsh Merala has a siloed project that bears a substance called Empires creditors of the UAE, which they've now classified as crossing the representedvillages as fields of Weeks of Yorkers.
I've been at the helm for a little over a year and I've always said that I still, regardless of funding and etc., this product will be available if Todapah continues. And I do believe strongly in the durability of this drug, unlike the analog parsibiv where there were alternatives, namely a generic oral.
There are no alternatives. We are the first and only FDA approved drug. And I would find it highly odd that if patients are on therapy, that they would be removed from therapy. And given back to a nonstandard antihistamine, that certainly...
does as limited in terms of efficacy and safety. So I still feel very strongly in durability by them. Also, you know, quite pleased with the efforts from both companies, CARA and CSL V4, in terms of moving the needle on CMS. And I think CMS has a real open mind to look at the post-adapta payment mechanisms. So we'll see how that plays out throughout the year.
in your last one, any milestones, yeah, we would expect a Japanese milestone pending approval that we would expect in the second half of this year. Okay. Okay. Thanks.
last one any milestones yeah we would expect a Japanese milestone pending approval that we would expect in the second half of this year. Okay thanks guys. Thanks Jason.
Thank you. Our next question goes from Lauren Livnod with HULN Writing. You may proceed.
Sorry, just had one follow up on Guided. And I understand historically, you've been quite conservative on that front. I think last update in November , which was still for, you know, first half, 24 runway, but that was based on, I think you said, you know, if we just flatlined the current product run rate and spend what we think we're going to spend.
We would make the first app 2024, but of course, you expected the product to grow. Now, it sounds like maybe in your answer to, I think it was David's question, you put it a little differently, which is based on our internal projections. I mean, clearly you're not basically on this quarter's run rate of sales because it's artificially depressed, right? But I guess I'm trying to figure out in your guidance, are you projecting, I guess, a more traditional ramp through the year? And that's how you get there, or is it still like, look, if we went back to sort of an underlying demand number that we think we were at this quarter and flatline that?
that are still quite conservative guides. Does that make sense? Yep, Lauren, perfect sense. And this is Ryan again. So yeah, I think the way to think about it, and you're correct on kind of the transition of the guidance from Q3 to Q, from Q2 to Q3 and where we are now. And I would say that the very conservative number that we...
that at least into the first half of 2020-24. So the biggest driver and the biggest variable to this is Corsova Profit Chair. And I've haircut what are internal projections. It's also important. And we've talked about this before, and as a week at some point, want to give...
guidance along with our partners CSLV for, what our two expectations are for the drug, but we're still on the first year of launch. As we've said over and over again, there's variability and I've tried to stay ultra conservative in my cast runway forecast just for that purpose, but that doesn't, you know, using
Using math to back into what our expectations are using my runway forecast is not accurate because I did haircuts substantially from what we believe for We can't back into either the spend or the revenue Correct Gotcha. All right. Thanks. Appreciate it
Our next question comes from Sumonco-Carny with TANQ or Genuity. You may proceed. Thanks for the follow-up. My question is on Tidapah. What's the specific metric used by Tidapah to calculate the utilization rate? And how much visibility does KARA have on that variable on a real-time basis if at all?
like that by their ASP. For Parsibib, they obviously added in the units for the generic and the branded oral sense of par multiplied by their ASP and divided it by the number of dialysis treatments. And they arrived at roughly $10 a session or roughly $10 a session.
You know, let's say, you know, 700 million total for the bundle. So we don't have real time, neither does CSL, we don't have real time utilization data that CMS has.
So based off of that kind of dynamic, what do you think the sweet spot would be to calculate that to arrive at a TADAPA kind of reimbursement? Would that be at some point later this year, next year? How much do you think about that? Yeah. The smallTel bearing on it, again, I would say with CMS1,
utilization. Now there's one comp and that's part of it as I mentioned before. The reason they got a third year was they said, you know, they said roughly that hey the first six months or so of a launch given that it's six months in a rears is probably not a real stable environment.
because you're just like our launch, right? There's interesting dynamics, you're building, there's some inventory, so it's not a true reflection of utilization, so that's why they got the third year. So to the answer to your question, I would say later next year, at the end of next year, probably the end of 2024 would be the best time to kind of calculate to see what sort of funding would be required for a course of them.
And then just the last one on those lines, is this instability or volatility in demand an advantage or a disadvantage when it comes to TEDPA extension? Well, you know, again, I could only look at what parts of it they used as an advantage to get a third year, right? So you're saying the first six months of a launch are...
It's not steady state. I would say more of a personal opinion. I mean, I don't have many data points to look at other than that.
I that's again, I would say more of a personal opinion. I mean, I don't have many data points to look at other than other than that. Got it. Thank you.
Thank you. This concludes the Q&A session. I'd now like to turn the call back over to Chris for any closing remarks. Yeah, so I'd like to thank everyone for joining us this afternoon, and we look forward to providing updates.
in the coming quarter. Thank you very much. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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