Q1 2023 Reata Pharmaceuticals Inc Earnings Call
<unk> immediately following approval we are pleased to share that we have seen strong initial demand for sky claris from patients and their healthcare providers. We've received approximately 500 patients start forms through early may the <unk>.
Patients start forms were submitted by over 250, prescribing physicians, including neurologists and primary care physicians and other health care providers, providing a broad initial prescriber base.
We've been working diligently to ensure we can get drug to the market as quickly as possible. We've completed the final stages of Sky Clarus drug product manufacturing and packaging.
As we shared on the approval call in February we observed a process related drug substance impurity above the reporting threshold, which required us to update the drug substance specification prior to releasing final product, we're working collaboratively with the FDA to obtain an approval of the revised drug substance specification.
<unk> for the process and purity as quickly as possible.
We now anticipate sky <unk> commercial drug availability to be available no later than mid August .
Andrea <unk>, our SVP of regulatory affairs will provide an update on this process.
We understand that in some patients symptoms of FAA manifest early in life and Sky Claris is not currently indicated for patients younger than 16 years of age.
Dressing this is a top priority for us and we're evaluating strategies to support label expansion for pediatric patients younger than 16 years of age.
We're planning to request a meeting this quarter with the FDA to discuss our possible strategies.
Also planning to initiate a study to evaluate the safety Tolerability and pharmacokinetics of <unk> in pediatric patients in the fourth quarter of this year.
<unk> will provide additional details on our plans later in the call.
Next slide.
We submitted a marketing authorization application for <unk> for patients with FAA in Europe in the fourth quarter of last year and the application is currently under review with.
We recently received the day 120 list of questions and as Andrea will outline later, we believe that we can adequately respond to the questions that have been raised we're on track to provide the responses in the third quarter of this year.
Beyond <unk>, we continue to pursue development of our interest to activate our platform and are advancing additional preclinical drug candidates.
Colin will discuss we anticipate IND filings for two additional molecules in 2024.
Moving to our Hsp 90 program, we're developing RTA 901 for patients with diabetic peripheral neuropathic pain, our DP MP, we've finalized the design for a randomized double blind placebo controlled two part 12 week phase II trial of <unk> 901 in.
<unk> with D Pnp and plan to initiate that study during the third quarter of this year.
Yeah.
Next slide.
Earlier today <unk> reported results from a llama <unk> phase III trial of our docs alone in patients with diabetic kidney disease as Colin will discuss the study met the primary and key secondary endpoints and there were no significant safety issues identified in patients.
Receiving <unk>.
However, there was no separation and in stage renal disease or ESR D events between the active drug and placebo groups after three years of treatment.
Because there was no improvement in ESR D events, and the regulatory implications of that we and <unk> decided to discontinue <unk> loan development activities, and we decided to refocus our capital and resources on our other programs.
Lastly, we're pleased to announce this morning, a new non dilutive $275 million debt facility with funds managed by Pharmacon advisors as.
<unk> will discuss this new facility extends our cash runway through the end of 2026.
And with the commercial launch of Sky Claris puts us on a path to self sustainability.
With that summary, I'd now like to turn the call over to Don <unk>, who will provide an update on our commercial launch for Sky clears.
Thank you Lauren good morning, I'll continue on slide eight.
Friedrichs ataxia represents a significant commercial opportunity and we believe that there are approximately 6000 patients in the United States living with FAA today too.
<unk> ICD 10 claims data analyses, we see approximately 5000 unique diagnosed <unk> patients that can be linked to health care providers.
Excluding approximately 10% of those diagnosed under the age of 18, and the remaining 4500 or approximately 90% represent our total on label addressable market.
Most patients seek routine care by their local neurologist or primary care physician.
Important commercial launch target includes CCR and centers or collaborative clinical research network sites ataxia centers in Hcp's currently treating patients.
Through the evaluation of claims data, we've identified approximately 2500 health care target providers.
Treating patients with friedrichs ataxia. These.
These HCP and the diagnosed patients they treat are the primary focus of our commercial launch efforts this year.
Next slide please.
Patients and healthcare providers have long awaited an approved treatment for friedrichs ataxia and this is evident through the demand we see for Sky Claris and only two months following approval.
Reata reach as our single point of contact for our patient services program and serves as the intake center for all Sky Claris patient start forms.
Start forms received by reach are an early indicator of our launch progress.
Through early May we've received approximately 500 sky Claris patient start forms submitted by over 250, prescribing physicians, including neurologists Pcp's and other health care providers.
500, FA patients represents over 10% of our current total addressable market. We are pleased with this quick uptake, which reflects strong demand patients are actively seeking treatment and health care providers are willing to prescribe sky Claris.
Next slide.
Our 2023 launch objective remains unchanged. Our goal is simple to establish sky claris as the first and only effective and safe treatment approved for <unk> ataxia.
Our commercial launch activities engage our three important stakeholders. This includes hcp's currently treating friedrichs ataxia with patients in their practice today.
On label patients diagnosed with FAA and the payer community.
With our attention on physicians currently treating patients with FAA, we continue to communicate the value of Sky Claris the significance of our clinical data and how this data translates to a clinically meaningful impact on the disease.
Additionally, we are working to ensure all hcp's understand how to access sky claris for their patients and the programs we offer to support utilization.
Patients and their caregivers are also important stakeholders.
Because sky Claris is the first and only drug approved for <unk> ataxia, we continue to inform and educate patients and their families. On this approval and we encourage them to see their health care provider for treatment.
To support these educational efforts, we recently launched our branded patient and HCP campaign, highlighting the recent approval and communicating that friedrichs ataxia previously untreatable is now a treatable disease.
Immediately following approval reata created a strong market presence and engage the community with our first branded booth at important neurology conferences, including the muscular Dystrophy Association, the National Ataxia Foundation, and the American Academy of Neurology.
Now approved digital social paid search and patient webcast, where launch in March and April to drive the awareness of Sky Claris and provide clarity on how to access treatment.
Lastly, critical to our launch success and quarter, our patient promise, we continue to facilitate payer coverage access and affordability through payer education and robust programs designed to minimize or eliminate patient out of pocket cost burden.
Continuing on slide number 11.
<unk> field sales and market access teams are executing on our branded launch strategy working to drive demand and facilitate payer coverage are experienced and fully trained teams began engaging customers immediately following approval on Monday March six the sales organization is working to reach and educate approximately 20.
500 health care providers, who treat most of the diagnosed patients in the United States. They.
They are also engaged engaged treatment centers driving early utilization at each of the nine U S centers of excellence and implementing plans to support the needs of the of these highly important accounts.
Our field access team consists of national account directors focused on Sky Claris coverage by top national and regional payers.
And a patient access liaison team hired to educate practices on access requirements.
Together this team's primary responsibility is to facilitate patient access to the drug by working to minimize and navigate payer criteria.
Since FDA approval of Sky Claris, the payer team has engaged all of the top U S payers, representing 90% of covered lives.
We anticipate that most commercial payer policies will be established during the second half of 2023 and that plans will play sky Claris on their specialty tier along with most rare specialty therapeutics.
Our patient access liaison team has worked with local practices to educate on access requirements and facilitate rapid payer approvals through medical exception and prior authorization, while awaiting payer policies. We are pleased with early payer coverage of Sky Claris tracking as we expected for a rare progressive and devastating.
Stating disease with no other approved treatment options I will now turn the call over to Andre alone, our senior VP and head of global regulatory affairs for the regulatory update on drug availability and <unk> alone MAA status.
Thank you Don I'll continue on slide 13 to provide an update on <unk> availability.
We are working collaboratively with the FDA to revise the drug substance and charity specification that is required for Scott Claris distribution to the market, we submitted a supplement to the NDA.
Which is being reviewed as a prior approval supplement referred to.
As for pass under expedited priority review.
The past FAA approval is needed before we can release finished drug product to the commercial market and not within 30 days after submission as previously guided with respect to the CBE 30 prior to its conversion by the SBA to a past while the Fda's approval target action date is in mid August per standard review timelines the FDA states.
That its review of the past is prioritized and approvals should come before the call date.
The approval and its timing are of course subject to Fda's review of the supplement provided there are no major deficiencies in the content of this mission, which we expect to know by mid June .
We believe that the information provided in the NDA supplement is sufficient to support the proposed updated specification limits for the process impurity. We develop this emission content based on FDA and international harmonized regulatory guidance as well as SBA internal review procedures and engaged with multiple experts to confirm the adequacy of the information.
To support the change next slide.
Yes.
For more context, the FDA reviews, each impurity limit on a case by case basis to determine its impact on product safety and known product characteristics.
FTA guidance documents outline key elements required for this determination, which we believe we have provided for example safety is of utmost importance. The limit for the proposed processing security was set at the qualification threshold, which per guidance should not require toxicology qualification testing based upon the known <unk>.
<unk> of the identified impurity and patient dosages will not specifically required we conducted multiple evaluations, including gene toxicology studies and in silicone structural analysis, which demonstrate no mutagenic potential.
We've also been able to identify the impurity and its structure and its highly detectable with our validated analytical method.
Further there is no meaningful impact on the total entities and there are no observed changes to any other properties of the drug substance.
We believe we have provided a complete package to the FDA and anticipate that sky class will be available to our specialty pharmacy no later than mid August 2023.
Next slide.
I would now like to share an update on our ongoing marketing authorization application in Europe . As you know we submitted the MAA in the last quarter of 2022, we recently received the European medicines Agency's de 120 list of questions, which is the primary mechanism for questions and responses to the exchange during.
The MAA review.
Emma separate questions into major and other categories. We are pleased that we should be able to provide thorough responses and requested information back to the EMA within a standard response period.
With respect to major questions on clinical efficacy the EMA invited us to discuss the robustness of the totality of efficacy results and suggested that the discussion could include the impact of imbalances and baseline characteristics on the pivotal study results and extrapolation of these results to patients with advanced disease and patient groups not included in the pivotal trial.
If you recall in the pivotal <unk> trial imbalances and baseline characteristics, such as history of cardiomyopathy and longer GAA, one repeat link favorite placebo patients were less sick and had less advanced disease since the imbalance favorite placebo a statistically significant results of the primary analysis safer and Omar treatment. Despite.
These imbalances indicate a robust efficacy outcome.
The EMA also asked us to justify inclusion of <unk> gave us and the proposed levels indication.
With respect to major questions on clinical safety, the EMA asked us to discuss the similarities between NRM two activators with respect to chemical structure and safety and to discuss suitable counter indications and warning in the label for cardiac renal diabetic and other conditions taking into account the population studies.
We believe that the recent paradox alone Ionic safety data in Japanese patients with diabetic <unk> will be very helpful to address potential of our docs lung and Rs II carryover safety questions for OMA.
These data will also be helpful to discuss suitable warnings and precautions, which the EMA access to discuss to discuss in relation to the summary of product characteristics, which is the EU label.
With respect to major questions regarding drug product quality, the EMA requested us to provide additional clarification regarding the potential for Nitrosomine formation and to provide further information and justification for our active substance control strategies. A GMP certificate is also required for the quality control side used to provide microbiome.
Logical testing of the drug product again, we believe that we can provide the EMA with required responses for the questions and are on track to do so in the third quarter of this year I will now turn the call over to Steve.
Thanks Andrea.
Naval expansion to pediatric patients with <unk>.
<unk> importance to us as Martin mentioned, we have been evaluating various strategies to support the expansion of the Armada hoffler label for projected patients younger than 16 years of age.
Last year in Europe , we received a positive opinion from pediatric committee.
On our proposed pediatric investigation plan and as agreed in this plan.
Submitted a request for scientific advice for additional input on the design of a clinical study in.
In pediatric patients between two and 16 years of age.
With respect to the U S. We are completing briefing documents to submit this quarter to the FDA with a request for a meeting to discuss label expansion for younger pediatric patients who are not included in the approved Sky class label.
We are also finalizing a protocol put a pediatric study off when we were not known to evaluate the safety Tolerability and pharmacokinetics of single ascending dose of <unk> in pediatric patients between two and 16 years of age.
We expect to submit this study protocol to the FDA this quarter and plan to initiate this study in the fourth quarter of 2023.
Based on feedback from the EMA and FDA, we will determine what additional <unk> studies will be declining.
With that I will now turn the call over to comment.
Thank you Sammy.
Moving to slide 19, mitochondrial dysfunction, neuro inflammation and neuro degeneration are common features across a range of neurological diseases, while mitochondrial dysfunction may not be the initiating event. It appears to be a common downstream pathways that results and subsequent loss of function Andy generation.
Areas that are affected.
A specific area of the brain that is affected results in the clinical symptomology, whether it be movement balance where memory disturbances.
<unk> and pharmacologic activation of interrupt two have demonstrated activity in multiple preclinical models that demonstrate effects on motor control function, no inflammation, no degeneration, and fibrosis movement and coordination memory and survival.
Haps more importantly, recent evidence from genetic studies and people have link interrupt two susceptibility, Andrew or progression of several diseases, including movement disorders in Alzheimer's disease.
Excellent.
We have advanced two next generation Interactor activators, Archie $4 15, and Archie for 17 to R&D directed studies based on our extensive in house library of over 800 molecules and understanding of the structure activity relationship.
The non clinical profile support advancement to clinical studies, we have shown broad activity in systemic and CNS models of inflammation autoimmune disease and no generation with appropriate Ami PK properties, our dose ranging toxicology studies demonstrate an expected profile based on our knowledge of the <unk>.
Class and our late stage R&D directed studies are underway or planned we anticipate R&D filings for both molecules in 2024.
Next slide.
<unk> also known as <unk> hundred one is a highly potent and selective oral small molecule modulator of Hsp 90. It is differentiated from in terminal Hsp 90 inhibitors ended up buying the C terminal and promotes mitochondrial function <unk> mitochondrial function by promoting proper code.
<unk> folding and reducing <unk> mediated inflammatory signaling.
The drug is active in preclinical models of painful and Insensate diabetic neuropathy. It is differentiated from other molecules.
Only reduces pain, but it also restore sensation and models associated with loss of sensation.
Diabetic neuropathy is a serious complication of diabetes associated with substantial morbidity approximately 4 million patients in the U S are affected with moderate or severe <unk>.
Phase one studies in healthy volunteers are complete and demonstrate an acceptable profile <unk> was well tolerated with no safety signals drug discontinuation or Smes.
Moving to slide 22.
Yeah.
The phase III trials that we are initiating a randomized double blind placebo controlled two part 12 week phase II trial of <unk> in patients with <unk>. The objective is to assess pain using the numeric pain rating scale or in Prs <unk>.
We plan to enroll 192 patients randomized evenly across three arms in each part for a total of 384 patients patient.
Patients are allowed to take up to one standard of care medication.
In order for patients to enroll they must not have achieved adequate pain control upon entry with a N prs pain intensity score of at least four on a zero to 10 point scale at screening.
We will conduct an exposure response analysis using <unk> data to select doses for part two there.
The primary endpoint is the change in average pain intensity SaaS by MP Rs at week 12.
Ran to dose patients in the third quarter of this year.
Moving to our Cte programs and as shown on slide 24. The Ami trial was conducted to determine if egfr improvements observed with Barack slone could translate to reductions in ESR D.
Beyond May was a phase III randomized double blind placebo controlled trial in diabetic kidney disease patients conducted in Japan.
Patients, who had advanced <unk> defined by Egfr values between 15% to 59 Mil per minute were allowed to enroll.
The minimum treatment duration was three years and the maximum was four years upon completion of treatment patients then participated in a 16 week observational period.
The primary endpoint was time to onset of a confirmed 30% decrease in Egfr from baseline were adjudicated ESRB and an important secondary event was time to ESR D. Even though the trial was not powered for this endpoint next slide.
As Warren mentioned, the primary and key secondary composite endpoints <unk> demonstrated statistical significance favoring Barack swoon.
These endpoints were driven by reductions in Egfr decline events. However, no separation in ESR D. Events was observed. This result appears to be explained by initial egfr increases that were not maintained in patients who reached ESR D.
In regard to the impact of <unk> on our CPD programs, a major challenge for Barack Sloan.
<unk> development program has been the use of Egfr as a surrogate that is intended to predict ESR D.
<unk> data show a disconnect in that Egfr improvements were observed but they were not associated with reduced <unk> events.
This poses a significant regulatory challenge as a consequence, we and KK C are terminating our CTG programs.
We will be communicating these plans with regulators and our clinical trial sites immediately next slide.
Despite the disappointing outcome of our <unk> program. The safety data from <unk> may provide important data for the broader and rep to activate our class from a safety perspective, there was no evidence of adverse renal safety, including hyper filtration, where other adverse findings. There was also no evidence of diverse.
Vascular safety with no imbalances in deaths adjudicated cardiovascular events or Smes fluid overload events, where blood pressure.
There was also no evidence of drug induced liver injury and the AE profile was consistent with the established safety profile I'll now turn the presentation over to <unk>.
Thanks, Colin good morning, everyone.
Today, I will provide an update on the following key topics.
First operational progress on the Sky Claris manufacturing.
European commercial readiness activities toward amendment on the Blackstone equipment fourth brief update on the $275 million non dilutive financing.
And finally first quarter 2023 financial update, including our updated cash guidance, which provides funding through the end of 2026 and allows our path to self sustainability.
I will continue on slide eight to provide update on sky cloud its manufacturing activities.
As Andrea mentioned earlier subject to regulatory approval, we anticipate sky class models to be available through our specialty pharmacy for shipment to patients during August of 2023 or earlier.
From an operation standpoint, we have completed manufacturing and packaging of Sky Clowdus capsules.
To remind everyone in 2019, we reacquired ex U S rights for Omar from Abbvie. Accordingly, we currently own the global commercial rights for Omar.
In line with our plans to prepare for the potential label expansion in the U S and global expansion opportunity for <unk>, we have ramped up our production for re supply for Skype for us commercial drug supply.
Next slide.
Following the submission of an MAA for <unk> in Europe last year, we accelerated our build out of our European infrastructure outside the U S. We have hired and European leadership team overseeing commercial marketing market access medical affairs and supply chain activities in anticipation of <unk>.
In the European countries.
Further we initiated marketing expertise global value messaging and health technology assessment work streams for European countries.
We have selected a third party logistics or <unk> partner, a product distribution into Europe .
If approved in Europe , we will be prepared for a European commercial launch for <unk> during the second quarter of 2024.
Next slide.
As we announced this morning based on the results of Miami and our decision to discontinue development of our barge security programs, we have amended our development and commercialization funding agreement with Blackstone.
Under the terms of the amended agreement Blackstone has removed all obligations for <unk> and commercialization.
We removed all restrictions on any new debt and released all prior security interest.
Additionally, we have garnered a low single digit royalty on worldwide net sales of <unk> for <unk> ataxia.
Okay.
Our total royalty obligation on <unk>, including a Catholic institutions, Blackstone and Abbvie will be in the range of five five to seven 5% of net product revenues based on the tiered product revenues.
While we are disappointed with diameter results our decision to discontinue about oxygen development and entered into the amended agreement with Blackstone allows us to refocus our resources and over $100 million in capital towards our future pipeline and programs that were previously planned for CBD development.
Next slide.
This morning, we also announced a $475 million debt facility with funds managed by pharma upon advisors LP.
The aggregate $275 million and new non dilutive funding will be advanced in four tranches. The first tranche of $75 million will be funded this week.
This new non dilutive debt facility of $275 million bolsters, our strong balance sheet, which will enable us to extend our cash runway through the end of 2026.
Along with the savings from the farms previously planned for <unk> development and our anticipated <unk> revenues. We believe that we are on a path to self sustainability.
Okay.
I would also like to remind you that with the approval of <unk>. The FDA granted us a rare <unk> disease priority review voucher and we have the option to do not under the financing by monetizing this voucher in the future.
Next slide.
We announced our financials and filed our 10-Q earlier. This morning, I would like to highlight a few financial items this quarter, including a strong cash position and our operating expenses.
Let me start with our cash balance as of March 31, 2023, we maintained a solid balance sheet with approximately $321 million in cash cash equivalents and marketable debt securities.
I would like to remind everyone the above $321 million as of March end excuse the $275 million of debt financing announced this morning and.
And based on our current operational plan with the anticipated commercial launch of Skype lettuce, and our cash balance will enable us to fund operations through the end of 2026.
We expect that to start funding may allow us to reach the part of self sustainability.
Any new pipeline expansion expansion or in licensing activity.
Moving to the fourth quarter of 2023 financial update.
Yes.
Our R&D expenses increased by $15 7 million for the three months ended March 31, 2023 as compared to the three months ended March 31 2022.
This increases due to an increase in certain ongoing clinical study costs and stock.
Based compensation due to the vesting of certain performance based equity grants.
FDA approval of Skype lettuce.
SG&A expenses increased by $30 million for the three months ended March 31, 2023 compared to three months ended March 31 2022.
This increase was primarily due to increased commercial activities and increase in stock based compensation due to vesting of certain performance based equity grants upon FDA approval oxcart lettuce.
On next slide we have a reconciliation of GAAP to non-GAAP financial measures for the first quarter of 2023 compared to the first quarter of 2022.
non-GAAP R&D expenses increased by $9 million for the three months ended March 2023, compared to three months ended March 2022. This increase was due to certain ongoing clinical study costs.
The ongoing SG&A expenses increased by $14 1 million as compared to the three months ended March 2022. This increase was due to an increase in commercial activities for Skype lettuce.
I will turn the call back over to Warren.
Thank you.
In closing.
We're pleased with the approval of Sky Claris, the first and only drug to treat patients with FAA.
We're encouraged by the significant interest from patients and health care providers to begin sky clears treatment and are working to have commercial drug in the channel as expeditiously as possible.
Further we're cooperating with the EMA and their review of our marketing application seeking approval for <unk> in Europe .
Of course, we're disappointed with the results of the <unk> study and the need discontinued development of <unk> for the treatment of patients with <unk>.
We put a lot of effort over the years in an attempt to produce novel drug with a very meaningful clinical benefit to patients with <unk>, who have seen little progress in the treatment of their disease.
But the EIA data made the decision straightforward and it permits us to focus our resources and future development on our neurology programs.
The pharmacon debt facility of $275 million bolsters, our strong balance sheet, which will enable us to extend our cash run rate through the end of 2026.
Along with the savings from the funds planned for <unk> development, and our anticipated Sky Claris revenues, we believe that we're on a path to self sustainability.
These resources will permit us to relentlessly pursue our mission to bring life changing medicine to patients with severe diseases.
That concludes our prepared remarks, we'd like to thank everyone, who dialed in and I will now turn the call over to the operator for questions.
Thank you ladies.
Ladies and gentlemen at this time, we will begin the question and answer session. If you would like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind I would like to be remains from Mickey that star followed by K. Please keep your questions to one question and one follow up only.
Our first question today comes from Yigal <unk> with Citi. Please go ahead.
Alright, great. Thank you very much for taking the questions on the Sky class launch could you just give a little bit more granularity, perhaps on the pace of the start form accrual.
Since you've started accepting performs on March six just curious if it was more of a bolus effect or if youre seeing a steady ramp over time and where there any pediatric applications that were off label in that 500 number. Thanks.
Don would you like to take that question Hi, Yigal. Thanks. So much for your question. We are really pleased with this early demand and expected that patients in hcp's would be actively engaged upon approval.
So of course, we're only looking at really a two month window here, where we've seen these 500 enrollment forms or patient start forms be submitted so of course, that's very quickly over a short amount of time and it's a bit early to say is this just a bolus of patients or should it continue but again, we were really anticipating that we would.
See this this level of support and interest from the HCP and the patient community and that is really very encouraging.
As far as your second question around pediatric patients of course, our label is for.
Adults and adolescents 16 years and older and so we really do believe that payers are going to really look to this when they look to reinforce enrollment criteria and so right now it's a bit early to really communicate on the number of patients and the demographics within the enrollment, but if you think about the.
The trial enrollment criteria and then also what we expect to see from payers do you can you can imagine that the demographics that we're seeing.
Okay, Great and then just one follow up on the post approval supplement as you've discussed.
You mentioned that the FDA may be able to approve this earlier can you provide any more granularity on when earlier would be and then are you planning to leverage a second source supplier to resolve this impurity for new batches or once you get the pis cleared that's really not necessary and has the EMA.
<unk> commented at all on the security question and Theres CMC review. Thank you.
Andrew would you like to comment on those three questions. Yes, if I can I can take.
At least one of those questions. So the FDA has not provided any granularity on the timing of an earlier approval.
<unk> has just notified us that the review is.
Archives.
And that it should come sooner provided of course any any review issues, but we believe we provided everything that we need to provide.
And then I think the question was on the do we need to change this supplier.
The supplier network I mean, do you want to take share.
Warren.
As you mentioned already right.
We have already completed manufacturing of arc.
Gotcha is current buses and capsules.
Completed and package right now so we are just waiting for this path to be approved by the FDA for us to do that you have enough quantity to supply for the near term.
For the next several years already being.
Accelerating our effort to produce more he supply capsules, yes.
In the long run we would be.
<unk>.
Second supply source and other activities also.
Okay, and then just on the EMA any comments there.
Their review of the CMC.
So I can I can address that so the.
And clearly was identified after we had submitted the MAA to the EMA is not aware at this time.
The impurity.
That we that we observed so we plan to actively look to update the MAA either pre market or a post marketing and we're trying to do that as quickly as we can.
Alright, Thank you very much.
Okay.
Our next question comes from Matthew <unk> with Goldman Sachs. Please go ahead. Your line is open.
Okay.
Hey, everyone. Thanks for taking our questions. So maybe to think about the impurity situations, but thinking more about the cadence of kind of news flow between now and mid August . So you mentioned in the prepared remarks that the timeline for the FDA suggested substantial efficiencies that would be the kind of June timeframe. So should we think about it kind of it.
I mean, no news is good news type perspective, then if it goes through June and there hasnt been any note disclosure from you all about the agency that that should be kind of considered that things are running along smoothly and then kind of practically from that would you announce that kind of resolution of the pads and kind of the official formal commercial launch.
The drug.
Yes, I think I'll, just take that and Android feel free to chime in but we wouldn't expect to we view it as a routine review we wouldn't expect we think the filings adequate.
Yes, I would say no news is good news are just proceeding with their review.
I assume that we're going to make an announcement when drugs available in the channel, particularly for the patients and for the health care providers. That's correct, yes, that's the plan yes.
Yes.
Okay, and then a follow up question. So you guys just talk about your expectation towards kind of getting to breakeven status and that it made certain assumptions around operating expenses that kind of does it assume some level of our docs loan investment so given today's discontinuation of <unk>.
And does that change what those metrics look like what do you think that gets kind of skycars patient number that you think gets you to breakeven now versus before the official continuation of Barton <unk>.
Sure.
This is Len.
Great question as you know, we don't guide on our operating expenses and on revenue yet, but if you.
Do a calculation based on the U S pricing and you look at our current run rate of expenses right I'll start with the expenses our expenses have been quarterly expenses have been in the.
Run rate of <unk> $75 million, a quarter, which equates to a $300 million of your expense rate.
And if you think to get to the self sustainable breakeven point.
You need approximately one patient.
Scott <unk> right to reach that point and as Don mentioned since we are very excited with the current flow start in first two months to reach 500 patients. We believe stock point could come pretty quickly after lunch.
Okay, great. Thank you very much everybody.
The next question comes from Mig <unk> with Guggenheim.
Please go ahead.
Okay.
Yes.
Thank you for taking the question.
Sorry, you're asking more question again on this impurity issue so.
So it seems like.
I mean, if you read the press release, you were trying to ask the FDA to increase is that an acceptable torrential up the impurity.
I quickly to read it have you actually resolved. It can you just tell us what the.
The impurity was so that's just on the impurity side I do have a question on.
On Basel I was curious.
If you can comment on what did you see.
Would you see.
Any worsening of the anemia and that sort of just trying to understand what the read through would be to the product.
Pipeline for <unk> at.
Early stage pipeline. Thanks.
Okay, Andrea do you want to address the yes.
Yes, you are correct, we are proposing to increase the.
And surety.
Specific impurity specification.
B B.
Basically to the reporting threshold above the reporting threshold, but not.
Beyond the qualification thresholds, which does require qualification additional toxicology qualification the impurity itself as an acetone act of that.
As part of our normal process chemistry.
That basically formed in the presence of of acetone and so again, we saw that in our drug process validation and this is the appropriate controls strategy to manage what is what we believe to be inherent variability to our process.
And then Colin would you like to address the question about.
Safety read through proteinuria.
Yes, and so Kieran and their kols will be presenting the data at a future medical meeting when we are publishing the results.
But at a high level I can say that we were pleased with the safety.
Number one there.
There were no adverse cardiovascular finding so no imbalances in endesa adjudicated cardiovascular events.
Including.
CHF events no differences in blood pressure from a renal safety perspective, I think it is important to note that there is no evidence of hybrid filtration. There was no worsening kidney function relative to placebo. What was observed was that there was a modest increase in kidney function that was not sustained.
Patients who are <unk>.
And so the drug just from there wasn't enough drug or it wasn't able to.
Meaningfully maintain that separation.
And the album area profile was consistent with what we've seen before and lastly, there is no evidence that any liver injury and so this is a large trial that resolved some overhang from the beacon trial.
Those that we can administer our drug safely to patients and so we think it's favorable for as far as the read through to the class.
Okay.
Yes.
Sure.
Our next question from Charles Duncan with Cantor Fitzgerald.
Please go ahead Charles your line is open.
Yes. Good morning, Thanks for all the color on the initial interest in Sky Claris and taking our questions I had a couple of questions. One is relative to the European.
Process.
I'm wondering.
Andre I provided a fair amount of information, but im wondering if your overall perspective would be that the questions were.
Fundamentally different from those by the FDA can require any new analysis.
Or do you believe that your.
I guess preparations for the NDA really fully addresses all of the questions from the EMEA, but for the in parity.
Hi, Charles Yes, I will take this actually we think theyre very consistent with the questions that were.
Addressed.
<unk> by the FDA during the review process I think they basically want a summary of the totality of the data some of the things that we provided in the FDA review process were.
Things like that Andrea mentioned like we looked at the imbalances in the baseline characteristics.
It showed that those favorite placebo in that when you adjusted for those actually strengthens the value of the primary analysis.
I think that the FDA did a thorough review of where the drug should be used based on like the subgroup analyses.
Through the various various groups, including the pest cabot's patients.
So again I think we're in very good shape to answer those questions.
Okay, and then my follow up is relative to pediatric expansion.
I guess it seems to me like that's a really important thing for the patient community.
Don could you anticipate that PK PD study to be complete.
And file for an S NDA.
And then I guess.
The associated thing is pier B I know, it's not directly related but any current update and in terms of how to monetize that.
Yes, so I'll start with the first one on CME feel free to chime in.
With respect to the U S adjusting the.
The label for pediatric patients in the United States.
The forthcoming interaction with the FDA will be critical to understanding what that path is we have a number of approaches.
To that so I want to make clear we don't anticipate that the PK study alone would support it may be great. If it did.
But we haven't yet had that interaction with the FDA, we're actively in preparation for that too.
Get their feedback on a number of approaches to expanding to expanding that label, having said that when would we anticipate having the PK PD data and see me.
The level of interest is very high at the moment as we have discussed earlier on.
So the PK PD study will initiate the last quarter Q4, this year and the <unk>.
As you mentioned it.
Short term single dose study, we anticipate that within a few months, we will be having the data we are anticipating at the moment three to four months.
Yes, there has been a high level of interest we think it'll we will enroll relatively rapidly.
Do you want to comment on the pediatric review voucher sure.
Charles system.
Yes.
The grant of <unk>, we always have the option to monetize that and we actively look into those options, but right.
Right now I think with this new funding that is no.
Got it.
Need to do an instant monetization if anything I think they are both self funded and sufficiently funded for now.
Okay. Thanks for taking the questions.
Sure.
Our next question comes from Casa <unk> with Barclays.
Please go ahead.
Great. Thank you for taking the question maybe first just.
Just a clarification.
Andrea Thank you in your comments you made.
I think I heard really some clients offered some commentary.
Jerry around.
<unk> an impurity can you just make sure I want to make sure I get that.
Clarified and secondly, maybe just on the.
On the change in the Blackstone structure can you talk a little bit about the decision process.
So just to start offering there.
The switch to a royalty on <unk> sales. My my understanding was you kind of were under no obligation to do that so we're just kind of give you. Some background. How you guys sort of arrived at that thank you.
Yes, Hi, this is I'm sorry, so regarding the Nitrosamine impurity. So that that is specifically related to a question that the EMA has asked to US specifically wanting clarification on our next ethylene of risk assessment.
Such as clarifying the manufacturing steps.
We basically have identified in that report.
As a match that up to the manufacturing steps in the MAA itself. So I think this is this is pretty much an expected question based upon the report that we put in and I think we can answer it.
Okay.
With no issues.
Yes.
Okay.
So part of this is <unk> and I will tell.
To your second question regarding the Blackstone.
I think you are right we had no obligation.
On <unk> two.
Towards Blackstone Blackstone had full rights on <unk> development and commercialization and as you know we made the decision to discontinue but ox loan program and it was in conjunction with Kyowa Kirin, our partner in Japan, and our collaboration partner Blackstone. So it was all decided to.
And in order to discontinue our Falcon program and also to make sure. We get released from all future obligations for both development and commercialization and three from liens and security and trust on our whole pipeline.
<unk> decided to do this math royalty.
But it's a slow.
Low single digit number.
And it's also capped.
Okay.
Okay.
Okay.
Our next question comes from Annabel <unk> with Stifel.
Please go ahead.
Hi, Thanks for taking my questions.
Just a quick one on with regard to the PFS, where there any patients who were on compassionate use such as transition to the P. F.
And.
And maybe just a bit.
Bullets.
That you saw and have you gotten any sense of that.
Timing and transition to approval our payors.
<unk>.
Yes.
A six eight week timeframe and an expected timeframe or have they not even considering.
Just released and available.
On to.
To deliver to the patients.
Yes.
Hi, Annabel I'll take the first.
A question not on any number of patients that we had in compassionate use we do have a group of patients that are participating in still participating in open label extension study.
For now we're continuing that study unchanged and so I.
I mean, there may be a patient who have dropped out or something incremental but we wouldn't really be aware of that.
So I don't I don't believe Thats, having any impact on the start form initiations that we've been seeing.
Don do you want to comment on the payer experience so far yes happy too Annabel. Thanks for the question. So we've engaged with payers really for the last year.
And since approval our payer team has reached.
All of the top U S payers responsible for 90% of covered lives and so what we do know about payer policy development is that generally takes three to six months, sometimes a little bit longer with payers with a with a rare specialty therapeutic.
And so we are expecting policies to be published in the second half of this year right now what we're seeing our payer authorizations through medical exception and prior off and Thats really tracking as we had expected. So we're very pleased with that as well.
Okay, great. Thank you.
Yeah.
Our next question comes from Maury Raycroft with Jefferies. Please.
Please go ahead.
Hi, Thanks for taking my questions just clarifying for Sky Claris. It sounds like there is no need or plan in place to change the manufacturing process is that correct and then for the <unk> study starting in third quarter. How long do you think it will take to enroll that study and get to data.
I'll take the first one we're really not changing the process again just to reiterate the impurity that was identified was known impurity we'd observed it in the process. So it wasn't from a change in the process steps.
New impurity it had just been below the reporting threshold basically 0.1, it ticked up just above one and so we needed to amend the specification now.
For it to bring it up to below one five which is the qualification which is the qualification limit, but essentially no change in in the manufacturing process.
And then the second question was the G&P that E&P study <unk>.
Jimmy do you want to comment on that.
The enrollment what we think about enrollment for the <unk> study.
For our team I don't one yeah, I can take that one.
That we have guided that we would initiate the study in third quarter, we have not guided yet on the timing.
We completed enrolment I think we will give some more clarity.
I think we're hopeful that we'll see good.
Enrolment there, there's obviously a huge bolus of these patients is a very underserved.
Thanks, only a 12 week study so got it thank you Shannon enrollment.
Yes.
Okay.
Our next question comes from Brian <unk> with Baird. Brian . Please go ahead.
Hi, This is Luke on for Brian on the preclinical uninterrupted can you talk about how your understanding of the science that's changed maybe since bringing on board to the clinic and how you're deciding what neuro indications on the list you provided you might want to go after first thanks.
Colin you want to comment on that sure. So we've been working with the top interrupt you experts for over a decade now to collaborate and understand the role of <unk> two.
Similar to CK to interrupt two is broadly applicable and neurological diseases.
And as I mentioned in my prepared remarks.
A large amount of data in the literature that links polymorphism.
The <unk> II pathway to susceptibility to diseases.
Not surprisingly based upon our FAA data, there's relevance to many other movement disorders.
There is also.
Our relevance to all timers disease and other forms of dementia and so we're deploying these assets.
Neurological diseases as well as potentially other therapeutic areas and it's really the.
The wealth of data, we have non clinically and from the human studies, that's giving us a path, we're having to wait through the inflation reduction Act, obviously to figure out how we triage the opportunities and that process is ongoing but there are opportunities not only in rare forms of neurological disease, a common forms and so we have multiple assets too.
Address those sorts of indications I'd just add I would just add one thing too I think.
Over the past probably five years or so is the biology around interest to.
It has become better understood I think the role of interim two on mitochondrial function.
Been very well delineated and you may recall that prior to initiating RFA clinical trials, we did studies of.
If a patient fiber fiberglass ex vivo and showed that they had as you would expect severely impaired mitochondrial function.
And <unk> was able to restore that we think that is a really important potential biomarker.
For selecting future indication and we'll be looking at that data like that for each of the selected indications.
Thank you.
Okay.
Our next question comes from Matt Kaplan with Ladenburg. Please go ahead ma'am.
Hi, good morning, Thanks for taking my question.
Just going back to the impurity for a minute.
I guess is the supply that you've manufactured put at risk at all by the discovery of this impurity.
We don't believe so again.
<unk> is well characterized it's easily measured.
We're requesting a very slight increase in the specification above the reporting limit, but below the qualification threshold.
So don't expect also based on.
You should comment on this Andrea the safety profile of the impurity, yes exactly. This is this is part of our normal process chemistry as I had stated earlier. So again I think we're confident that the control strategy of adding and increasing the specification limit for this specific security is the right thing the safety testing that we have done.
Which includes Gino toxicity testing as well as in Silicon structural analysis, all indicate that the impurity as non mutagenic and so at this time and I think we're very confident in our manufacturing process and the lots produced.
Just need to get through this the CNS and we'll be fine.
Okay.
Curious where did you change your analytical method.
When you discovered this level of impurity or was it with a consistent and and you just go into a higher level.
Yes.
We're very fortunate that our analytical method are validated analytical method is able to detect that so we did not have to change per se that we obviously had to add in the specific.
Specific impurity.
Look at that now and have that as part of fee.
Validated process and testing.
Okay. Thanks.
And then last question in terms of understanding that you need there.
Strategic decision to discontinue paradox on but I guess, maybe a question for.
Colin and the omni it's not I guess why do you think the improvement in Egfr that you've observed did not translate into an impact on me.
Since these events.
So what we noted in the data is that in the patients who reached ESR D. Both drug and placebo there is separation in.
In Egfr for the first approximately two years.
And then there was conversions and they overlap each other for the following two years.
Don't have any clear answers for why but we noted is that when patients had a 30% or 40% decline in egfr.
The vast majority of patients were still receiving placebo or Barack Sloan.
But after that we noted in the data that both <unk> and placebo treated patients were discontinued from drug and the average duration was five 5% to seven months until they reached ESR D and so we don't know if.
Investigators had a difficult time managing patients as their kidney function approached ESR D. If there were concerns about the large loss that was observed.
But once again.
We just the Egfr increase was not maintained which explains why initially there was an increase while there is separation of 30%, 40% declines, but ultimately not an ESR events.
Okay. That's helpful. Thank you.
Thanks for taking my questions.
Yeah.
Thank you.
The questions. We have time for today again, thanks for your participation on today's conference call. As a reminder, an audio recording of the call will be available shortly after the call. We ask this fall.
This website and we ask the farmer dot com in the investors section.
Very much steel participation you may now disconnect.
Be available shortly after the call we ask this fall.