Q1 2023 Rhythm Pharmaceuticals Inc. Earnings Call

Speaker 1: To.

Speaker 1: You F.

Speaker 2: Good day, and thank you for standing by. Welcome to the RYTHM Pharmaceuticals Q1 2023 Earnings Conference call. At this time, all participants are in a listen-only mode. To answer the speaker's presentation, there will be a question-and-answer session.

Speaker 2: To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded.

Speaker 2: I would now like to hand the conference over to your speaker today, Dave Connolly, Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Speaker 3: For those of you participating on the conference call, our slides can be accessed and controlled by going to the investors section on the investors page of our website at ir.rhythmtx.com. This morning we issued a press release that provides our first quarter 2023 financial results and a business update.

Speaker 3: Slide two is our agenda here with me today in Boston are David Meeker, chair, chief executive officer and president of Urban Pharmaceuticals, Jennifer Chen, executive vice president, head of North America, Hunter Schmidt, our chief financial officer, and Jan Mazebrow, executive vice president, head of international is on the line joining us from Europe .

Speaker 3: And I'll remind you that this call contains on slide three. I'll remind you that this call contains remarks concerning future expectations, plans, and prospects, which constitute forward-looking statements. Actual results make differ materially for those indicated by these forward-looking statements as a result of various important factors.

Speaker 3: including those discussed on our most recent annual or quarterly reports on file at the SEC.

Speaker 3: In addition, any forward looking statements represents our views only as of today, it should not be relied on as presenting our views as of any subsequent date. We specifically display any obligations to update such status. But that I'll try to look all over to David Baker, who will begin on slide five. Thank you, Dave, and thank you all for joining this morning as we report another strong quarter. As we will keep reiterating this company's built on strong, well-understood biology. Thank you.

Speaker 3: That is the impairment in the MC4 pathway, which governs calorie intake, either hunger and energy expenditure. A clear on medical need in the patients who suffer with these rare diseases and a simple solution. And so reading is a replacement therapy with storing function in that pathway.

Speaker 3: The near term value in rhythm resides in our ongoing global launch events to every per patient's living with VBS and our phase 3 trial and hypothyline and copicity, which is now up and running.

Speaker 3: As we grow the organization, we continue to attract outstanding talent when a small company executing a global program working in a challenging space, continue to execute. We are well-capitalized with funding into 2025, with in-cippery revenues now beginning to make a meaningful contribution to the overall picture. So looking at slide 5, these are our three strategic pillars.

Speaker 3: Commercial launches are off to a strong start. Our conviction and the value we are bringing within civilly, particularly with regard to the less well appreciated and less well understood hyperbasia part of the disease continues to grow. Obesity is not one disease, it is many disease.

Speaker 3: Our educational efforts helping healthcare providers recognize these diseases and their need for a targeted solution are making a difference. Our personalized approach to supporting patients and their healthcare providers is working. We see each patient for who they are, we meet them where they are, and we don't do but...

Speaker 3: In the US, scripts continue to be written by a growing number of physicians and we are making continued progress in expanding parapouvals, particularly in patients covered by Medicaid as Jennifer will explain.

Speaker 3: Internationally, we have launched in Silvery for DBS in Germany, the largest European market. Following the second exemption from the German Federal Joint Committee, which recognized the Silvery is a therapy for a devastating rich in edgy disease and not a lifestyle medication.

Speaker 3: If John will describe the team's moving, then we look forward to the one progress.

Speaker 3: The HOT trial has initiated with the first patient's treated. We expect a completely normal and it's pretty guided in Q1 of 2024. We look forward to providing updates on the 12-month data at a medical meeting in Q4.

Speaker 3: The trial has initiated with the first patient's treatment. We expect a completely low-end, but it's pretty guided in to one of 2024. We look forward to providing updates on the 12-month data at a medical meeting in Q4. And we are continuing to make progress on our exchange offer.

Speaker 3: So the M&A trial and rolling, pediatric trial finishing, the weekly switch study finishing, and debris are one data to be presented later this year. The Shinvento integration has gone extremely well as we work towards candidate selection for the lead indication of congenital hyperinsolence.

Speaker 3: We will provide further updates on all of these programs in the fourth quarter. On slide six, slide six is our biology slide, which we will probably show on every earnings call. And this is to remind you that this is a differentiated pathway, which when impaired requires a targeted solution. These diseases are quite distinct from general obesity. The early onset obesity is severe and the obesity is lifelong.

Speaker 3: The common thread across these diseases is hypervagia, that means a tasteable pathologic to congregate with leads to abnormal food seeking behaviors. The common thread across these diseases is hypervagia, that means a tasteable pathologic to congregate with leads to abnormal food seeking behaviors.

Speaker 3: On slide 7, you see the two foundational opportunities, EDS and HO, affect meaningful numbers of patients with an EDS prevalence of 4 to 5,000, and an HO prevalence of 5 to 10,000 US with comparable numbers in Europe . The major difference between the BBS and HO opportunity is that the vast majority of the...

Speaker 3: for HO and no therapies have been shown to consistently work. The GLP-1 question is important. Earlier generations of GLP-1 did not show benefit. While we do not have trial data on the newer GLP-1 or combo therapies, anecdotally, as Dr. Buzaha described on our first HO call last year, the

Speaker 3: She believes 20% or so of HO patients may have some response to GLP1 and the magnitude of that response might be in the order of 10% or less. These drugs are different. They work through different receptors on different pathways. It makes sense that some patients may have some response to other medications including GLP1s because obesity is a complex disease.

Speaker 3: and more than one factor may be affecting any given patient.

Speaker 3: What we thought was most noteworthy about the Phase II cohort is how consistently sentmalinatide work in those patients who are compliant with therapeutic dose. The 18 patients had a mean BMI decrease of 14.5% at 16 weeks associated with meaningful decreases in their hunger scores. The consistency of those results strongly suggests sentmalinatide is targeting the underlying cause

Speaker 3: defect but find greater success once function in that pathway is restored.

Speaker 3: Moving to slide 8, we are excited to have our phase 3 trial underway with the design as shown here on slide 8. As a reminder, this trial and HO is a double blind randomized controlled trial and rolling 120 patients randomized to the one treatment and placebo. Patients will be dose escalated over 48 weeks and then followed for 52 weeks for the primary

Speaker 3: Overall, we have worked with over 100 clinical sites in 15 countries, which in addition to testing our therapy creates awareness, builds experience with the therapy, and most importantly helps build a community of patients and physicians working to improve the lives of patients living with these MC4 pathway diseases.

Speaker 3: with over 100 clinical sites in 15 countries, which in addition to testing our therapy creates awareness, builds experience with the therapy, and most importantly helps build a community of patients and physicians working to improve the lives of patients living with these MC4 pathway diseases. But that I will turn to call it a Jennifer.

Speaker 4: Thank you, David. I will be starting on slide 11 today. We are pleased with the continued demand and uptake we are seeing with our U.S. launch of the FNCIFRI for BBS.

Speaker 4: At launch, we felt good about our starting point and our strategic plan to identify patients to engage with physicians and educate them on the hyperphasia and severe obesity of rare MC4 pathway diseases and to support both patients and physicians through the journey. Now, three-fold quarters into launch.

Speaker 4: We are excited by our progress and our team is thrilled by the success stories we are hearing from patients and their treating physicians.

Speaker 4: We continue to hear from patients, caregivers, and physicians experiencing the benefits of not only weight loss, but also improvement in social activity and engagement, better sleep, and more confidence.

Speaker 4: Since the delivery was approved for BBS by the FDA on June 16, 2022 and through the end of the first quarter of 2023, we have received more than 300 new prescriptions for BBS patients.

Speaker 4: with more than 100 of them in Q1. The more than 300 new prescriptions since approval comes from more than 175 positions. Importantly, we have received pair approval for more than 160 of these prescriptions since launch.

Speaker 4: The demand for emphysema is strong.

Speaker 4: Physicians are writing prescriptions, patients are experiencing benefit on drugs, and payers are increasingly recognizing the value of this therapy. Next slide.

Speaker 4: Looking at the prescribers of Encephrata, endocrinology, both pediatric and adult, remain the top specialty at a combined 44% since launch.

Speaker 4: Pediatricians remain second, accounting for 20% of prescribers. Approximately 27% of all in-sibri prescribers since launch are new to rhythm, meaning that our territory managers had not called on them directly prior to writing a prescription.

Speaker 4: That's here increasing Q1 versus prior quarters as 37% of subscribers who wrote in the first quarter of 2023 were new to rhythm.

Speaker 4: This trend continues to give us confidence in our non-personal promotion efforts, which supplements our field team by educating a broader position in patient population.

Speaker 4: Next slide. For our pair of mix for BDS prescription, the majority come from commercial plans and Medicaid and a small profit, or less than 10% come from Medicare.

Speaker 4: We have mentioned in the past that commercial coverage for emphdvery is good, with payers representing the vast majority of covered slides have a policy in place to cover emphdvery.

Speaker 4: We are also pleased with Medicaid coverage and the progress we are making in securing approval. I have outlined on prior calls that there is variation in coverage status as some states cover and civry, some states do not, and others decide on a case-by-case basis through the appeals process.

Speaker 4: relative to the recovery. Next slide.

Speaker 4: According to Medicaid, there were approximately 85 million individuals enrolled in Medicaid in all 50 states plus Puerto Rico and the District of Colombia as of December 2022.

Speaker 4: looking at the left hand side of the pie chart. Approximately 75% of Medicaid-covered lives are in states with a positive and severe-cuff policy in place or in a state where we have been able to get at least one positive-cuffered decision in the absence of an empty-breed policy.

Speaker 4: within this latter category, which represents about half of the 75%. There are some states where we have been able to consistently gain positive cover positions, whereas other states could be mixed with one or more approval, along with one or more denial. Now moving to the right hand side of the pie chart, the remaining 25% of Medicaid covered by is a mix of states with no policy yet for empty recovery and...

Speaker 4: One, we have not yet had a prescription for our temporary that would trigger a covered decision. Or two, we have received a prescription and we're still working to secure access. Or finally three, where we have received a prescription and have not been successful in gaining access.

Speaker 4: through its forms of rate through the appeals process. This last category represents less than 10% of covered lives.

Speaker 4: We remain committed in our payer education and outreach efforts to help them recognize CVS as a distinct disease that requires a targeted therapeutic approach. And we continue to work persistently to explore reimbursement opportunities for all of our patients.

Speaker 4: For example, even when we have denial through the appeals process, we have had success in gaining Medicaid coverage through BPSDT, or early and periodic screening, diagnostic and treatment benefits. This program provides comprehensive and preventative healthcare services.

Speaker 4: Adult count for approximately 50% of prescription received and swung.

Speaker 4: While for discussions for adults, for children and adolescents, continue to account for the other half.

Speaker 4: A nearly all or 97% of patients with prescription have consented to receiving direct connection and education from our patient services team, which we call Rhythm and Tune.

Speaker 4: This allows our team to work side by side with patients and their families to help them gain insurance coverage and to support them through our education efforts from initiation and maintenance on therapy. Next slide. Based on the information available to us today, we know there are positions for prescribed and severe for one or more patients.

Speaker 4: who have additional VBS patients for whom they have yet to prescribe, as well as physicians with VBS patients who may require additional education to prescribe and to free.

Speaker 4: Our territory managers are actively engaging with these physicians to increase the sense of urgency to treat the hyperfacian obesity that comes with VVS and to set expectations about and stiffer therapy to support pull-through of the prescriptions.

Speaker 4: In parallel, genetic testing use of ICD-10 codes to narrow our physician targets.

Speaker 5: have driven our patient identification efforts. We are excited by the progress of the ongoing effort and the opportunity that remains for our civil moving forward. With that, let me hand it over to you on. Thank you, Jennifer. And good morning, fly the 18 please. Last week, we announced the launch of in civil in Germany for the treatment of obesity and control of hunger as translated with DBS with federal reimbursement. As you can see on the slide, the German Federal Joint Committee or GBA, rules that in civil reform, DBS is eligible for full reimbursement.

Speaker 5: by statutory health insurance. So GBA unanimously voted to exclude emcee-ray for the patients with DBS from its lifestyle exemption list.

Speaker 5: as it did previously for biorelict pump CPCS K1 and lipar deficiencies.

Speaker 5: and exactly on time with regard to our plans. As David said, this is a very important recognition of the severity of BBS, and further reinforce is the distinction between general obesity and rare MCFORR pathway diseases.

Speaker 5: Next slide. Germany, all the unique place in the history of rhythm that is very favorable to us in several other times. Our first patients were treated at the Charité University of Spital in Berlin, where the local experts had the longest experience in the world treating patients with several other times, more than ten years.

Speaker 5: We are very well positioned in Germany with an experienced team on the ground, engaging with health care authorities, payers, physicians and patient organizations.

Speaker 5: Our general manager in Germany comes from Alaylam, a successfully led many of 100s and high-value therapies launched in Germany and is leading a team of six people dedicated to the launch. Genetic testing is well established in Germany and our own programs are supplementing it. Based on our interaction with the centers of excellence, we believe about half of the patients diagnosed with BDS in Germany.

Speaker 5: academic registries for rare renal diseases and rare of thermological diseases.

Speaker 5: Next slide. Where these launches are difficult to forecast, especially the first 12-18 months. In Germany in particular, we don't anticipate a medical patient by patient's approach. However, we are confident that BBS in Germany represents a significant opportunity for MCRE. Our team has already engaged with physicians in 18 major hospitals.

Speaker 5: patients diagnosed and of those eight hundred we have identified physicians caring for more than 250 of them and we are focused on in that identifying more.

Speaker 5: we have identified physicians caring for more than 250 of them and we are focused on in light identifying more. Next slide.

Speaker 5: This slide is a reminder of our importance on the European market is to our global strategy. For rare genetic disease, we know that few parent countries are...

Speaker 5: is a reminder of our importance on the European market is to our global strategy. For rare genetic disease, we know that few parents countries are...

Speaker 5: Sorry. Sorry, sorry, sorry, sorry, other Wi-Fi issue. So I was saying that the slide is a reminder of how important the European market is to to our global commercial strategy.

Speaker 5: For rare genetic diseases, we know that European countries are more advanced than the US. With single-periodal-scar systems, governance-funded genetic testing, rare disease organizations, center of excellence and referral networks.

Speaker 5: For bi-ailelic, com-c and E-part deficiencies, we know that there are about 100 patients identified in the U4 and the UK and for BBS, more than 1500 patients are identified across those same countries.

Speaker 5: For Poducine Lippa, we have achieved access in nine countries in addition to the US. We launched the UK, Germany, Italy and the Netherlands. And we have achieved name-vision sales in France, Australia and Turkey, and early access in Argentina. In summary, we are very pleased with the progress we are making in Europe in terms of call of budgets.

Speaker 6: Next, in last slide please.

Speaker 5: We are also very pleased with the level of support we are receiving from key experts in MC4R patch weight disease including body bitulsion growth.

Speaker 5: Europe is home to many of the world-leading experts and wisdom is fortunate to enjoy a strong and long lasting relationship with many of them.

Speaker 5: In March, Professor Sada Fauruki from Cambridge, UK, one of the world leading experts in MC4R pathway diseases and Professor Phil Bills from London, who helped define how we diagnose BBS, both led a rhythm response of disease education webinar with Angela's color, with some of these with BBS.

Speaker 5: and release the BBS patient liaison officer for BBSUK clinics. On these webinars, the speakers explored hyperfagia, severe obesity, the genetics of rare MC4R pathway diseases, with a focus on BBS, and how to best care for these patients with a multidisciplinary approach.

Speaker 5: We were delighted to have more than 125 physicians from 17 countries joined the webinar live, which speaks to the high level of interest in rare MC4 disease among European physicians.

Thank you. And we'll have to enter. I'm going to have another role. Turning to slide 24 with the launch of emceiver in Germany and additional global markets coming online this year. Where the miss going in growing into a global commercial rare disease company and as we do.

We approach all our operations and investments in our commercial R&D and operational programs. It's an answer discipline that governs our decision making and focuses on building long-term value for our shareholders. We are grateful for your support. Let me review the highlights of the Q1P&L.

As mentioned, we recorded 11.5 million in that product revenue during the first quarter versus 1.5 million during the first quarter last year, which was prior to FDA approval for VBS.

Compared to 8.8 billion in that product revenue from 4.252, that marks an increase of 2.7 million or more than 30% quarter over quarter. This growth is driven primarily by MCV sales for the BBS and the United States. Cost of sales during the first quarter was 1.4 million or approximately 12% of that product revenue.

which is consistent with Q422.

Cost of sales consisted of approximately 600,000 in royalties due to Ipsom under our original licensing agreement percent of the latter time. That approximately 200,000 of amortization previously capitalized sales based milestones, as well as product costs associated with increased sales of commercial product.

R&D expenses were 37.9 million for the first quarter of 2023. This compares to 32.5 million during the first quarter of last year. Compared to 23.5 million in 2.4 of 22, this quarter quarter increase of 14.4 million is driven by several factors.

First, there were 5.4 million in cost to fees associated with the Symbentil acquisition.

The remainder of the quarter of the quarter increases due to a 6 million net increase in clinical trial expenses.

These are mainly startup costs associated with the HLFACE-3 trial and a substantial increase in activity associated with the M&A Phase-3 study.

Also in Q4, 22, rhythm received a $2.5 million credit during the close-out of our GoID study during that quarter, which reduced R&D expenses.

Overall, clinical trial causes are expected to be higher on a period basis during study start-up and after all trial sites are opened.

Lastly, in Q1, there was a $2.1 million increase in clinical supply costs for these studies and for other programs.

As GNA expenses were $24.6 million for the first quarter of 2023 compared to $21.4 million in the same quarter last year. This increase was largely due to the impact of $2.6 million in higher head count costs, including stock compensation.

order of a quarter, S-GNA declined nearly 1.7 million or nearly 7% from 26.3 million in the fourth quarter of 22. The decrease in S-GNA versus Q4s due primarily to lower marketing instances in the US.

For the first quarter, comment chairs outstanding work of $6.7 million and quarterly net loss per share was 92 cents.

During the slide 25, we closed the quarter of 2023, well capitalized, 295 million in cash on hand, sufficient to fund all land activities into 2025. This cash guidance includes the impact projected milestones associated with the Ssinvento acquisition. We'll try to put you other aspects of the quarter.

of the first quarter net product revenue of the 11.5 million, 83% of this revenue was generated from US sales in the in Sibri as compared to 85% at the fourth quarter of 22.

As mentioned, 5.4 million of operating expenses represented consideration associated with Synevento acquisition, which was included in this quarter. We counterproduced this transaction as an asset acquisition.

Q1 operating expenses included total stock base compensation of 6.4 million has compared to 5.3 million in fourth quarter of 2022.

And our non-gap operating expense guidance for 2023, which we disclosed last quarter, remains unchanged at 222 million.

This guidance excludes the non-tash impact of stock-based compensation, with that I'll turn the call over to David.

Thank you Hunter. So in summary, we're excited about the progress we have made and we look forward to multiple data readouts in addition to continuing to update you on our global blind results, and I do, really, very Neden, very happy.

commercial launch with BBS on the upcoming quarters. So with that, we'll open it up for questions. Operator.

on the upcoming quarters. And so with that, we'll open it up for questions. I'll put it in.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Please stand by while we compare and compile the Q&A roster.

Our first question comes from the line of Phil Nadeau from TD Cowen. Please proceed with your questions.

Good morning, congrats on the progress and thanks for taking our question. A couple commercial questions. First, in terms of reimbursement for the BBS in the US, are there any new trends in terms of either faster or easier reimbursement as the launch continues?

Or is it that the patient's spread among so many insurance plans that it's still at each point evaluating their first patient? Yeah, so, Jennifer? Yeah. I put a question. So.

We're continuing to build the relationships, but as you outline, there are so many different payers. So the scripts come in, is dependent on if we've interacted with the payer before or not. I would say that in terms of scripts that we've received through a payer where we've been able to gain reimbursement that process.

Also because we know what the process looks like for that particular payer is quicker. We are also seeing trends through our education efforts that we have a higher percentage of payer approvals at the PIRO authorization stage, which is also a good sign.

But once again, it's really one-on-one with these payers as they come in that our teams interact with. And overall, the average time in terms of gaining reimbursement still remains within that one to three month period of time. Millennium proceed.

there was a note that one of the opportunities for expansion in BBS in the US are among those physicians who are treating BBS patients but are not yet ready to prescribe emceevery. What are the objections those physicians have? What do they need to do or what do you need to do to convince them that they should be prescribing emceevery? Yeah, so I would say that the gating factors

could be either on the patient level or the physician level. You know, for both of them, some of these patients may not be of age and within our label. For patients specifically, the physician may have written a prescription.

life-long therapy. In many other reasons, from an ATP perspective, sort of similarly, they may work on some additional education through truly appreciating and understand the difference in terms of the hyperphasia and the early onset obesity that these patients have.

just to reinforce what Jennifer said, the hyperphasic component of this in terms of the opportunity for education and creating that sense of urgency. Not surprisingly, I mean, healthcare providers themselves, I think, just don't understand. Many of them don't understand the full impact of this on a patient and the family. And so there's still a little bit of, you know, we understand you're hungry, but they don't understand the pattern.

Thank you.

Yes, thank you. So we are still in the midst of the policy leapar pricing negotiation. And so far the dialogue has been very positive today. The medical benefit assessment has been positive as well. The biggest price negotiation will start in a few months and the process takes.

approximately 6 to 9 months or more to come for also German price. Perfect. Thanks again for taking our questions.

All right, one moment please for the next question.

All right, our next question comes from the line of Derek Archila from Wells Fargo. Please go ahead.

Hey, good morning everyone and congrats on the progress. Thanks for taking the questions here. There's a couple from us. So I know you said that the BBS launch and these types of rare disease launches can be lumpy, but I guess, you know, can you provide some more color on what's specifically deriving the acceleration that we saw in new patient ads from, you know, 4Q to 1Q here? Here again. There happened 5cs.

And is that something that's going to translate going forward into the following quarters? And then second question is, do we have enough data yet to really understand the discontinuation rate for incivary and bar-to-beal patients in real clinical practice and just understanding how that's trending right now? And I might have one follow-up. Thanks. Sure. And.

I would say that overall just in terms of the level of demand and interest for the specific therapy for BBS has been really overwhelming and great to see as well as clearly there was a need in the patient population as we're hearing the benefits that the patients are actually receiving.

Once again, a motivating factor for a team overall. There are existing opportunities that still remain in terms of the patients that were identified through all of our cross-functional team efforts. And so remaining opportunity just in terms of pull-through to the grip. And in the meantime, I could feel that in any disease, but particularly in this one, we have identified...

quarter by quarter that's going to be the exact same. So I wouldn't necessarily linearize or just make the same as such as quarter over quarter at this point of time, but I would just say that there still remains quite an opportunity just in terms of growth within the patient population for the patient for every. To the next question, I think, around- Me just, I had one quick fall under that, there. So I think what we can say at this point, and just what Jennifer said is that we are well beyond whatever pent up demand existed in the system and the like, and that you're seeing now a quarter on quarter as we would expect stability and-

of ongoing strength and the overall opportunity, if you will. And again, a reference back to the number of physicians who we had not been in contact with, and that pool is growing. And that's again, what we would see and speaks to overall help of, I think, a rare disease opportunity. But again, don't trend as Jennifer said. I think that's not, you know, could be less or more in any given quarter, but our confidence that this thing is real and working is very high. And there was another question just.

in terms of the level of maintenance of patients through that phase with the number of discounts relating to nausea or vomiting being extremely low. We do have some discontinuations, you know, for various different reasons, including a very low number relating to...

is the hyperfacial because people feel the impact, they also feel the impact of stopping therapy. And once again, we also hear one patient's staff therapy that the hyperfacial counts back, and there may be interest to come back onto therapy. So very happy overall, just in terms of the load is coming right.

Got it. And maybe just one follow up here on the pre-limb data that you're going to put out for daybreak. I guess will you be kind of doing an in-depth kind of presentation on framing those opportunities? And I don't know if you've kind of got it to what those opportunities look like from a commercial perspective. Are they more like a pompsy or more like a barred?

I'm more to come on that, but the expectation you should set is it'll be around 5 plus or minus genes where we have enough meaningful data to report out. Got it. Thanks so much.

to come on that but the expectation you should you know set is it'll be around five plus minus genes where we have enough meaningful data to report out. Got it. Thanks so much. Thanks. Thanks. Thanks.

So within the 140 that you mentioned, that includes patients that are still within the pending category that we're still working through and through two reimbursements, as well as patients that we have put on to our...

a patient population that we've been able to gain reimbursement for at this particular time. So that's, you know, approximately less than 10% of scripts to date. The commercial coverage has always been very strong. The caveat here is as with other rare diseases there are.

The caveat that I will say here is even though they're on our free drug program, I think the word that you're going to keep on hearing is that we have a persistent, just in terms of still working on those patient populations as well, whether it's further education with a payer or just ongoing help for that patient itself. And we have been successful in moving some of these patients off into commercial insured path. So it's constantly evolving from that perspective. And we are really just still starting and...

continue to engage with all of our customers on that point. So thanks, everyone, and maybe just to, from just to add to that, the, at this point, I think the number I would think about, and Jennifer said we're still learning it's early, etc. But about 20% plus or minus the total scripts are our patients who are likely to be on PAP and get ready.

to move them over and patients themselves actually don't want to be on path. They'd much rather be on a more stable, if you will, situation where they are being paid through the system. Thanks, that's helpful. And then maybe on the clinical side, you highlighted, you extracted a complete enrollment for the study in HL in 1Q24. Are there any factors that could shift that timeline either to be more rapid or delayed for any reason?

Yeah, many. Probably on both sides. I think what we've shared in two parts to this, one is just the practical administrative issues of getting sites up and going. We've identified the sites that we need. You can continue to look for other quote unquote maybe outstanding sites to have as backup if something happens at a site. But in general, we have the sites we need. And so it's just a matter of working through contracting with these sites and the IRB approvals.

three. So that's one and that could vary. I think we have quite a comfortable guidance there.

You know, you don't know what you don't know. And then the second is on terms of patient interest. Patient interest is high. So we have our investigator meetings coming up in May. First one in the US, some followed a week or two later in Berlin for the European sites. And again, what we've heard and what I expect to see there is a high level of interest and...

sites are clearly aiming for much higher than even distribution. So, what was the other ghost? But I think I'm pretty confident that one's rather running at the patient's home.

fairly aiming for much higher than even distribution. So, what's the other goes? But I think I'm pretty confident that one's rather running that the patient call would have. Great, thank you.

Thank you. One moment, please. All right. Our next question comes from the line of Dagon Ha from SIPO. Please go ahead. Hey, good morning, guys. Thanks for taking our questions and congrats on the progress as well. Just reverting back to Derek's question.

levels that are in the label. Can you comment on any kind of, I guess Jennifer kind of went into education to get patients into sort of the more tolerant dose, but any color you can provide across the three doses, what kind of disposition we should be expecting going forward and what work is being done to keep patients off of the 1 milligram and more skewed towards a 3 milligram arm.

And then secondly, on the strategies for the reimbursement, David, you spoke previously a number of times, Gaussian as sort of the analog we should be thinking about for BBS going forward, but...

Just harkening back to your rare disease experience. What kind of reimbursement rate should we be expecting eventually? I mean, is this something that can near end to 80, 90% or hovering in the 70% and what work needs to be done for in civil society to get there? Thank you so much. Thanks, big on.

So first, I'm going to discontinue, patient rates, we previously as you noted, said, maybe that would characterize, we're drifting up a little bit there, not surprisingly, as we get more patients on for longer periods of time, so it characterizes a little bit. High level single, big, single digits. But as Jennifer said, and this is what's most encouraging overall, is one, I think we've done much, much better than we did in clinical trials, for the reason she outlined the close.

resolve over time and know the patient's being willing to come back on therapy and we have several of those examples. So including others.

Number one, number two, the vast majority of patients are getting to three nigs. I would say the balance of the patient population is early and still working their way there. So my expectation is that the truly vast majority of patients will be at or close to three nigs. Younger patients, very young patients may in fact achieve their desired level of benefit at a low level.

dose yourself back up, you don't just put down and stay as a rule.

The third question was just on the, the Gose analog, I mean, I just referenced that to remind people that, you know, these opportunities and rare diseases, they may ramp somewhat more gradually, you don't have a hockey stick as a rule, but you tend to have been for a long time and the Gose, you know, 30 plus years from its original approval is still in building dollar plus opportunities.

VDS has many of the elements of what you want to see in a rare disease opportunity in terms of the overall size of the opportunity, the ability to diagnose it, it's syndromic in this case, and the, you know, strength of the community that's emerging, patient community and physician community. So we'll see where it goes. That was the analogy there. With regard to reimbursement, I don't expect to see a

in the US specifically any decrease in price, including when we expanding the HO. Obviously, you don't necessarily take the same price increases that you might take in other parts of our industry here. So there is an implicit decrease if you don't take a price increase in terms of inflationary.

Thank you. One moment please, as we compile the Q&A roster.

Our next question comes from the line of Michael Higgins from Laydenburg-Thalman. Your line is now open.

Thanks, operator. Congratulations, guys, on that continued progress. I just want to follow up on the HL trial, the pivotal that's enrolling. If you can give us some feedback on how the pace of enrollment, the pace of screening, failure rates, and the pace of site enrollment are coming in versus expectations.

Thanks, Michael. Early, we just started. We'll figure out, we will give you metrics on how that trial is evolving. Today, you know, the communication is we're up and running, but again, it is much too early to have any sense there. I will say, again, part of my opinion is we have our guarded system up and running. Just like we have today.

as opposed to sort of observed on hard data here. But there are enough patients and enough interest out there that the pre-screening of patients should be pretty good. So patients who actually come to the site to be formally screened, I'm not expecting a high screen failure rate there.

to be determined. But again, I think this is one of those situations where you're not desperate to enroll just anybody and therefore you can end up getting higher screened value rates. But we'll see, but I can't give you more information today. Okay, I appreciate that. And also, you've noted that you're looking for three data readouts in second half. I'm curious if you can provide feedback after the order of those events and if they come in before or after the...

Appreciate it. Thanks, guys.

Thank you, Mark.

Next question. Thank you. One moment please. Alright, our next question comes from the line of Joseph Stringer from Needham and Company LLC. Your line is now open. Hi, good morning. Thanks for answering our questions. Just wanted to get your...

So, how do you anticipate your P and launch playing out and perhaps using Germany as an example? You have the 250 patients ID. Could we expect a similar rate of TRX add relative to what has been seen in the U.S. today?

I'll turn it over to Jan one second just to highlight, you are correct that the European is better experienced or situation is better organized and more identified, but as Jan highlighted, may have a different pace. So Jan. Jan, you are correct that the European is better experienced or situation is better organized and more identified.

Yes, maybe I will start with the German launch versus US and I will end on the overall European situation. So first Germany and the US. So you're right, there are similarities between the two countries and the most important one is the decentralised health care and decentralisation of the care.

And as I've said in my presentation, we already know more than almost 20 larger spitals where there are diagnosed BBS patients and where patients will be treated. There is a main difference, which is the pace of starting the treatment. The German solutions are well known to be more conservatives than the average.

And we know that it will be patient by patient decisions like for any other layer disease. So that's Germany versus the US. And then back to the other question of Europe . It's a bit early to speak in terms of trajectories for in civil in Europe first because Germany is our first important lunch. And the second most of the important Europe and country will launch at the end of the year.

Italy, New Zealand, Spain, etc. And at the end of 2024, for in L'Ukraine. So still a bit early.

Italy, Netherlands, Spain, et cetera, and at the end of 2024 fall in the UK. So still a bit early.

Netherlands, Spain, etc. at the end of 2024 for the UK. So still a bit early. Thanks, John . Joey, is that covered?

Great, thank you for taking our questions. Thank you. All right, our next question comes from the line of.

All right. Our next question comes from the line of Jeff Heng from Morgan Stanley . Your line is now open. Thanks for taking my questions. For the low number of patients discontinuing due to hyperpigmentation, do you have a sense from those patients how their hyperphasia was? Do they happen to have lower hyperphasia than other VBS patients so the hyperpigmentation override?

I don't think it's necessarily correlated with the hyperphase in terms of the reasons for the discons. I think that it's patient by patient just in terms of how problematic the hyperfigmentation is for that particular patient.

And once again, I think as the patient's disconnect and they feel the resurgence of the hyperphasia itself, they can also be at a decision point once again, just in terms of really deciding whether to discontinue or to reinitiate therapies. So our teams are there regardless to support them as they move forward.

trying to get a gauge the potential impact of this continuation based on this recommendation. Thanks.

Yeah, so I do outline, I would say that, you know, for the most part, just in terms of this reoff period, the payers are following our guidance or label. And so it's a bit early, just in terms of really reaching that point of time within our bond.

With that said, we feel very good just in terms of the positive feedback and the compliance and persistence on therapy to date which speaks to the benefits. I think that in general it will be interesting just in terms of what.

quote unquote, clinical benefits is outlined. I think for the most part, like ears just want to be reassured that these patients are actually receiving clinical benefit while being on therapy, and that's something that once again our patients continue to monitor baseline themselves versus on therapy.

That can also be translated to the physician who can translate that as well to the payer.

All right, thank you. All right, thank you. We do not have any other questions, so I would now like to turn the conference back to David Meeker for closing remarks. Great. Well, thank you everyone again for tuning in this morning and we very much look forward to the next quarter update on the Thank you. So this concludes today's conference call. Thank you for participating. Give me now a disconnect.