Q4 2022 Roivant Sciences Ltd Earnings Call
Okay.
Good day and thank you for standing by welcome to the <unk> Sciences fourth quarter and fiscal year 2022 earnings call. At this time all participants are in listen only mode. After the speaker's presentation there'll be a question and answer session.
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I would now like to hand, the conference over to your Speaker today, Stephanie Lee with <unk>. Your line is open.
Good morning, and thank you for joining today's call to review <unk> financial results from the company's fourth quarter and fiscal year ended March 31st 2023, it's definitely with frightening presenting today, we have Mark Klein CEO , Brian Vance.
For those dialing in via conference call you can find this I think but that's today as well as the press release announcing these updates on our IR website at Ww Dot Dot dot com.
That would be providing the current slide number can be for them to help you follow along I'd like to remind you that we'll be making certain forward looking statements. During today's presentation. We strongly encourage you to review the information that we filed with the SEC for more information regarding these and.
And related risks and uncertainty and with that I'll turn it over to Mike.
Thank you Stephanie and thank you everybody for listening this morning, it's great to be back.
Yeah.
I was wondering if take it feels like a slightly anticlimactic because we were obviously just together.
Last week, you talked about that really exciting data from our chronic period of August 31 of one study, but actually an enormous amount has happened for us both in this fiscal year generally as well as us.
Specifically in recent quarters, so looking forward to providing updates on those topics, we'll talk a little bit about where we are through the course of our year I will give some some great updates on the progress that we're making with the ongoing launch of the camera as well as a reminder of our atopic dermatitis results I will do a quick quick refresh of the data we put out last week on our.
Or was it anymore.
A quick update on our CRM program, our financial update and then we'll turn the line over to Q&A.
Starting on slide five.
As a reminder, a level setting we're really proud of the continued progress that we've made here.
We are we celebrated this quarter with enduring one.
10th consecutive positive phase III study to run.
The most recent 10 studies that we've run have been successful. We now have six products that we have gotten approved by FDA out of my model.
We reported at $1 7 billion in cash as of March 31 at which supports our cash runway into the second half of 2025 crore, which will have a tremendous amount of data to share.
We are incredibly proud of what we now believe is an industry leading pipeline, especially in late stage I and II.
With over $15 billion of sales potential as supported by the ongoing launch of the gamma and with a number of potential Bachelor or first in class programs.
We've said all along on slide six the 2023.
Going to be our biggest year.
We are right at the Midway point, both in terms of your and in terms of that.
The data that we've been looking forward to sharing with.
We continue to provide updates on how much we will do today and this has been another great.
Great quarter of progress for that launch we've now shared data for both of our phase III studies in atopic dermatitis asthma data that we think is really really exciting and will support.
An important product.
In that class pending potential FDA approval next year.
We've now supported data from both the induction and chronic periods.
Our study of <unk> 31 to one our <unk> antibody.
And ulcerative colitis, which again is phenomenal data, we think sort of really chop and efficacy EBIT.
Has the potential to really matter for patients and to be an important new option. So what I'm hearing you right updates on that program still coming and obviously closely watched or a number of updates from R&D FTR and franchise, including the healthy volunteer study for <unk>, which we hope and believe will establish that program is a best in class anti <unk> antibody as well as a number.
Of ongoing trials in the total Nab show continued efficacy of that age who've done the classic multiple indications.
And then finally in the fourth quarter of this year and we will talk more about this before we have a readout on purpose statement of Arctic two JAK, one each of potentially pivotal one or two studies.
In SLE, which we think has the potential to be again transformational top level efficacy in that patient population.
On slide Kevin just as a reminder, we are very proud of our portfolio of our pipeline overall here with a number of late stage agents.
Think matter and some of the biggest classes I certainly in immunology.
And we will continue to add to this pipeline as opportunities present themselves. Obviously, we made some really important additions.
In the last 12 months with MPT 14 or to an average of 31 to one.
And I hope, we can find more just like those two to bring on in the coming year.
So I will start in the next section here with an update on the commercial launch of the camera.
On slide nine I'll say, we are very excited about the way that demand continues to evolve.
For <unk>, we are the best launching novel topical we believe in <unk> history.
Obviously, the best selling branded topical in psoriasis and have been since very shortly after our launch we continue to like the way that the demand has grown.
We expect to see it continue to build through the end of this year.
Things are putting coverage in our DTC efforts.
Built.
On slide 10, some really great progress here in the early launch that we just wanted to make sure. We hit our first of all we get $13 7 million in net product revenue for the March 31 quarter, which is up a pretty good degree from 9 billion or $9 2 million in the prior quarter. It's obviously happy with the sales number maybe frankly, even happier with the progress that we made during the quarter.
In gross net yield up from 18% to 25%, which is a reflection of the breadth of coverage that we added frankly faster than I expected in the first quarter of this year and we've continued to add Ed covered since so we're really happy with that in some ways I think managed to pull forward gross to net improvements earlier this year and we continue to feel good about.
Our trajectory through the year, we'll talk more about that over time.
From a coverage perspective on slide 11, we're now up to 76% of commercial lives covered within the year launch this is better better by a meaningful margin than our expectation at the time, we launched the product. This includes the addition of two major two national Pbms Formularies to National Health plan Formularies during this period.
An important regional PV on formulary with 18.
<unk> plans to just really great coverage and as a reminder, the significant majority of that coverage is single step through steroids.
Which is exactly where we want it to be when we launched the product which gives us access to.
The patient population that matters most to us as a reminder, there are.
Almost 400000 topical corticosteroids scripts every week between psoriasis and atopic dermatitis and.
We're currently doing about 4000 or a little bit more than 4000 scripts a week. So we have.
A ton of room to grow into that opportunity and we're really excited to do that both in stratasys today and.
Pending FDA approval in atopic dermatitis as well.
Speaking of atopic dermatitis on slide 12.
12 here just a little reminder, we've talked a lot about the data we got together to talk about the during two data on our call in March we put up the during one data as well which is extremely consistent. This is just it's great data. We are really excited about this data.
It's really it's terrific response rates really really good easy 75, so I am very happy with the quality of its David here.
Reported data was in adults it looked very good in children as well.
About equivalent and we feel like it.
Which is really as these markets by <unk>.
Data are going to make a really big difference for patients and as a reminder, this study went all the way down to pediatric patients with <unk> II, which is right because the pediatric patient population is large and the unmet need there is significant.
Across all patients and especially pediatric patients on slide 31 thing that you really care about with a topical agent to safety and I think it's clear from our data that the tolerability of this agent in atopic dermatitis is very very good frankly, even a little bit better than we saw in psoriasis with very low rates of contact dermatitis very low rates of follicular events.
So just a clean profile that tax.
It gives us exactly the profile of the product, we think we think no matter of physicians and patients.
Really excited about this data from a safety perspective, well I won't spend too much time on the crush on comparison in slide 14. This is data in a moderate to severe patient population that looks competitive with or better even a number of systemic agents and certainly in the same in the same ballpark as or better than anything else. It is a topical in atopic dermatitis.
So.
More updates to share on <unk> over the course of the year looking forward to continued coverage looking forward to progress in the franchise.
Got it looking forward to providing updates on the SBA filing for <unk> for <unk>, which we expect to be at the very beginning of next calendar year looking forward to sharing those on quarters to count.
So I'm going to pivot now and give a brief reminder.
This is data that we put out just last week, so I won't spend a lot of time on it with <unk> 31 to one on slide 16, we really believe that.
This program is in a class of its own right into Q&A antibodies at this point between our program in one of our competitors that also reported data earlier. This year. This is a remarkable class of drugs that have shown incredible efficacy and we are very proud to be the first agent to show sort of a real sort of proper blinded 52 week data last week.
It's great data, we showed substantial improvements between weeks working with 56 across basically all of the endpoints that are go forward dose.
We're the only anti <unk> antibody at this point.
Validating long term efficacy data and we have over 200 patients have such data.
Have a biomarker that we've talked a bit about that is relevant to 60% of the UC population with meaningful improvement in efficacy even relative to the all comers population and then.
Safety has been it's been very good for the agent in the study so far we've seen no impact of Immunogenicity on the program, which we know it was a question that you were hoping to get that.
To get run to ground in this trial. So we're now full speed ahead here with a plan to run a simple phase III program.
With a single subcutaneous dose.
In the <unk>.
In the near future and will provide updates on that just after our discussion with FDA, which is coming this summer and as a reminder of the data and I'll go quickly on this on slide 17.
We saw a modified Mayo clinical mission in our in our <unk>.
Phase III dose go from 29% to 14 reached 36%.
Six weeks a.
A remarkable 50% at week 56, endoscopic improvement and endoscopic remission and endoscopy sure zero is something that are frankly, very few agents and so we don't typically see it reported and we were really excited with what we saw there with 21% of patients in the all comers population on the phase III dose achieving a clearer endoscopy.
Once you overlay the biomarker on slide 18 that data looks even better.
It gets up to a 43% clinical remission and the phase III dose at week 50, 664% of patients meeting the bar for endoscopic improvement and again, a really exciting 36% of patients.
And then just Catholic remission by week, 56, which look we didn't measure specific anti fibrotic markers here, but personally I look at this data is suggesting that we are having.
Potential disease modifying impact on these patients so really exciting.
Another topic and this is also data that we shared but just as a reminder.
In a large patient population here are really the whole study.
Patients who are biologic experience with our biomarker we saw frankly.
<unk> data at <unk>.
Six weeks, 34% clinical remission for biologics experienced patients 45 percentage of African movement. This is some of the best data that's been shown in biologics experienced patients, which are generally recalcitrant in hard to treat and as a reminder, this includes patients on doses other than our optical and chosen dose. So we expect when we generate large and data in our phase III studies.
There is room for improvement even over these really great numbers. So.
We're excited about the potential for efficacy in the biologic experienced population I think any way that we look at our data where there is sufficient and to reach a judgment. We feel very confident that this is going to be a great agent in later lines of therapy.
Obviously all of that has to be backed up by a good safety profile and one of the really exciting things about the <unk> class and you can see our safety data on slide 20 is because of the wait till when it works the mechanism because it is really only sort of present into eastern inflamed tissue, it's sort of a signal amplifier.
You don't get some of the some of the infection and other things you see in other anti inflammatory classes and so we have no severe infections observed.
No infections observed in greater than equal to 5% rate in the chronic period.
And just generally we saw a really good.
Safety profile through week, 56, well tolerated at all doses.
I'm serious aes were sporadic and determined by the sponsor and actions related to drugs.
Very very clean safety profile, we think disconnect can help them.
Utility drug going forward.
And then finally on the data on Slide 21, as a reminder, one of the questions that we got a lot going into the maintenance period was weather.
What's going to matter, we were reasonably confident that it was not what you can see on this slide in the chart in the Middle This is.
The data pooled across all nine arms of the study.
Patients with <unk> by and large has somewhat better clinical remission in patients without 80 days and it was uncorrelated with the core tile of Ada Titer. We don't think this is a real effect. Obviously, we just think this is noise, we think 88 or having no impact on safety or efficacy across all the arms of the study.
And we had said we expected our neutralizing antibody rate to be flat to down.
I would say it was zero at week 56, and the expected phase III dose. So we have no patients have neutralizing antibodies at week 36 on that.
On slide 22 without belaboring, the point too much.
We feel really great about the amount of data that we have here and it is quite differentiated relative to the field here, we have over 400 subjects dosed, including.
250 patients dosed across an IV and <unk> subcutaneous doses.
200 patients dosed.
Across <unk> doses out to a year of dosing.
Hundreds of patients dose no matter, how you cut it we are the only agent here with subcutaneous data the only agent here with anything like this quantum of long term data.
Our biomarker would prospectively specified has obviously been been tested in many patients.
We expect a commercial form factor that is a once monthly smart sub Q auto injector, so we really feel.
Feel great about our profile versus the other agents in this class, which also have what we expect will show show promising data given the quality of the target.
Finally on slide 22, I wanted to highlight we have initiated as we mentioned last week a phase II study in Crohn's disease. It's just over 100 patients. It has two doses subcutaneous monthly.
Hi.
Similar in that sense to the phase III study that we just ran in that in UC there'll.
There'll be 12 weeks of dosing followed by 40 week chronic period again, similar with the similar set of endpoints.
You can see on slide 22.
This was a study that we wanted to start very quickly because we realized as we took a step back that we felt like we could run a proper dose ranging study in crohn's patients without giving up any ground on the opportunity to be first in class in crohn's.
And that would allow us to run just as we are doing and you see a straightforward simple single dose phase III study that will not that will be optimal for patients. One question I expect we'll get is why no placebo arm in the study the basic answer to that is we wanted to get the dose ranging study done as quickly as we possibly could and so we wanted to make this a really attractive study for patients to enroll in.
Starting now and so we're trying to have that study up and running so overall as a reminder, on slide 14, I'm sorry slide 24.
Really excited about this program think of it as a major anchor.
Our late stage pipeline, we think it will be the first in class anti <unk>.
Antibody with an efficient well validated path to approval on a single a single a single dose carried forward to phase III.
We think we are uniquely positioned to overcome some of the limitations of IBD therapies, including efficacy in later line therapy with sustained clinical remission and endoscopic improvements among the highest ever reported.
Our biomarker.
Further differentiates this class and our agent versus other treatment options for IBD patients and gives us an opportunity to select for patients with an even higher level.
Emission rate, although notably we think our data clearly supports our study in an all comers population irrespective of biomarker status or line of therapy, and our expectations with batteries the patient population that we're targeting for.
For approval.
And then finally, many opportunities for additional growth, including the Crohn study I just mentioned as well is that the dual targeting of both inflammatory fibrotic mechanism pathways opening up a range of large markets and high unmet need indications that go well beyond IBD and we're looking forward to sharing more unmatched sooners work underway.
With additional studies.
Yes.
Finally, I want to spend a few minutes on <unk> and our <unk> and franchised. Obviously <unk> has spoken about this program and there are no new updates in this section, but just wanted to remind everybody of what was coming given how excited we are about this program. So slide 26 as a reminder, we have a proper franchisee of anti <unk> antibodies with our first generation you're talking about.
Currently in multiple pivotal studies across <unk> with data coming.
Over the next couple of years in those studies as well as others and then we have our next generation antibody <unk>, which.
Which we believe will have the same.
Best in class Depression of ITG as program, while showing minimal impact on how we've been in LDL and therefore being useful for chronic dosing in diseases with an even larger population we.
We have data coming from that program.
August timber for single ascending dose data in October November for multiple ascending dose data.
We think that has the potential to establish that agent is best in class. As a reminder, both of these agents are proper classic subdues their subcutaneously administered they are simple sub Q injection space.
We'll be at home administered we believe sort of very straightforward comparable to other programs on the market, which we think is also at this point something differentiated and something we do not believe any of the other agents in the class have today.
<unk>.
Our phase one study thats ongoing and I am getting to is as I said single ascending.
And multiple ascending dose cohorts that study is underway and we are looking forward to sharing that data.
Later this year as I mentioned.
We believe that.
The data that we have in hand is likely we have HP data that we've shared on these calls and in other forums and based on our data for <unk>, both on albumin and non Agg, we think the safety data, which we will be putting out.
At the end of the summer may be usefully predictive.
Data.
A fair number of questions on the bar for success and I guess, the one thing I'd like to say is look we believe based on the data and based on the way. These programs are engineered.
Should be clean and albumin in LDL remember that the LDL assay is about a 10% variability in the albumin assay is a little bit more specific on that but has some variability and frankly, although we have seen to be clear. None of this data today. So I have no information of what this show and our expectation from the NHS data that ought to be clean our advisors tell us that even up to for example.
Ample at 10% matures in LVL would not be clinically meaningful so looking forward sharing that data optimistic given the way that drug was engineered as well as the HP data that we should have a good result, there and look forward to getting back together with immuno Matt team later this year to go through it.
Finally, I'll give a brief financial update on slide 21, and then we will open the line for Q&A. So we showed net revenue.
$27 million, including net product revenue of $14 million for the quarter, ending March 31, or net revenue of about $60 million and net product revenue of about $28 million for the fiscal year.
For the quarter, we had our.
R&D expense of $130 million or.
Adjusted R&D expense by $126 million.
And SG&A was 126 or adjusted about 100.
Sorry.
Consistent with prior quarters from a spend and burn perspective.
Notably we ended the fiscal year with about $1 7 billion.
Cash cash equivalents, which we feel good about it.
As far as carrying us into the second half from 25 guidance Youre, giving us lots of opportunity to turnover data cards.
Look I won't go through all of the catalysts on slide 33, I'll, just say, we've talked about some of them here, but there is a.
Long list to come of important developments, including and programs, we've talked very little about frankly, and so we're looking forward to sharing that data look forward to getting back together.
Been a tremendous fiscal year for us.
We believe this is only the second 10-K, we filed I want to thank you.
All of our all of our patients.
The team at <unk> as well as those listening on this call for being with us and with that I will pause and turn the line over to Q&A. Thank you everybody.
Yes.
Thank you.
As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
Our first question comes from Robyn Karnofsky from <unk> Securities. Your line is open.
Hi, guys. Thanks for taking my question. So just going back on your comments around the bar for Q do.
Do you think given the properties of the molecule that we said look at the graph shown for the sad and Mad data and it will look similar.
Are the properties of the molecule similar enough.
We should expect the curve looks similar that's my first question and then I have a follow up.
So I'll also I'll also provide Frank if he has any.
Comments, there, obviously immuno vacuum talks about this often I would say like.
Overall in terms of the broad properties I think the answer is we would expect them to look generally similar obviously with the notable difference that <unk> two has been engineered to avoid the albumin binding and so we're galvin interferon steric hindrance. So I would not expect to see an impact on outbound LDL, Frank anything you'd add to that.
I think thats, well said, the only thing I'd add to that.
They are not identical antibody is obviously so they have slightly different properties. They are similar.
Encourage.
The investment committed to kind of look at the albumin.
Data is probably the most.
Robust and reproducible assay among the assets, we're going to be.
Presenting in the future, but I do think that the.
Curve should be Directionally similar.
And for <unk>.
<unk> as well that's why I was really asking and then.
Then a question on at the time.
Congratulations on doing a great job selling.
Let's start this quarter I was just curious can you just give us some trends on what youre seeing in feedback from.
There were a net effect.
At what point.
Back to see.
Patients not taking the driver or pausing that drug.
And not waiting for that as it gets to come back a little bit I know, it's early in the launch so I wanted to see if youre seeing anything there and thats. It. Thanks.
Okay. Thanks, Robin it's a great question and I will say broadly first of all physician and patient feedback on the remit of benefit.
I think it's something that patients experience.
Very quickly on drug right people go on they use it for a while they go off basically effect preserved and we get a lot of feedback from docs and from patients that they are excited about it.
I suspect that that is.
Embedded in the renewal rate for the product already that is like the rate at which patients are renewing the number of tubes, but they're using as a function of a bad already it's obviously a little bit too early to tell how that shakes out versus the overall growth in demand.
In general it's not like I would expect to see some sort of significant change in the future because of that effect and I think it's a selling point for the drug I think it's something that physicians are happy to tell their patients that they can go off drug and continue to see a benefit in terms of tubes, I guess im not sure that was exactly your question but.
Yes.
Our view has always been that in order to be successful we need to be a steroid replacement.
Steroids, just over a year, maybe a tube and a quarter a year it already looks from our data like we are in excess of that it's hard to tell how much in excess of that given our leaders, but my expectation is that we will have more for you than steroids, mostly given the lack of duration limit on the on the drug.
Great. Thank you.
Thanks, Ron I appreciate the question.
Okay, one moment our next question.
We have a question from David Risinger from SVP Securities. Your line is open.
Thanks, very much so congrats to you Matt in your team for all the.
Nice updates and corporate progress so with respect to my questions I guess I'll start with the Tam. So the trends are obviously moving in the right direction, but on slide nine it does show that the Trs peaked and I know that there are sometimes anomalies in the data, but the <unk> peak for a few weeks close to five.
And they are not back at that level, yet so could you just talk about the trajectory ahead and.
The commercial drivers for the continued ramp of the product.
And then second.
With respect to the approval clock for a D. Once you file it in the first quarter of 'twenty four.
How many months after filing would you expect approval and then finally.
A higher level question could you talk about second half 'twenty three transaction opportunities. So.
Should we expect.
Central acquisition of additional external assets.
Is it possible for ROI van to monetize an undervalued asset.
Framework for thinking about potential external.
Transaction activities would be helpful. Thank you.
Thanks for listening David Thanks for those are all great questions I will take them.
First of all on the script trends.
Thanks for thanks for asking the question look I think first of all there's clearly just like weekend variability in the scripts and that's been true for all of the topical launches its not just ours.
And so I think a little bit of the sort of.
Cologuard Choppiness is noise and I expect we will continue to breakthrough the ceilings that we set for ourselves over time. It may not be linear the particular peak that you pointed out was just on the back of AAD.
There were some docs, who were maybe trying the product out on the back of that first atopic dermatitis data.
And I guess, my hope and expectation is that Thats, a preview of what's to come when the approval comes in in terms of the level of enthusiasm around that data, but obviously the product is.
Currently not approved in that indication.
In terms of.
Timelines. So it's an SBA, we expect a 10 month approval clock.
Is the short answer after filing.
And then in terms of transactions in the second half of the year.
Look I think it is clear from our history that we are not great at sitting skills.
It's a pretty exciting market.
A lot of different directions, obviously some of the targets that we are in our targets that are closely watched their targets that big pharma companies fully care about so you can imagine.
Those are discussions that we're thinking through economically and try and make sure. We do the right things for patients and the right thing for each program.
Turn and then in the other direction. It remains a very fertile opportunity for new programs Big pharma companies are constantly making portfolio prioritization decisions.
<unk>.
Obviously, the patent cliff dynamics and other things facing the industry.
Providing this opportunity in the past still team.
I think you can expect that we are looking actively at lots of things.
And I hope to be able to share some of them with you over the course of the rest of the year.
Great. Thank you.
Thank you Dave.
Thank you.
Our next question.
Comes from Nida, <unk> Garg with Citi. Your line is open.
Okay.
Sorry can you hear me thanks for taking my question.
I just wanted to ask a follow up question to Robin's question earlier about.
What you are looking to see with <unk>.
Just in terms of the albumin reductions since it sounds like that is the most reliable.
Sort of assay to look at how should we think about what an acceptable albumin reduction.
Looks like I believe with the lower dose of the telco math or that I think the 340 Meg.
You saw about a 30% reduction which corresponded to about a 40% increase in LDL.
So I guess is there a benchmark on albumin reduction that we should be thinking about.
In terms of translate ability to that kind of 10% or less LDL increase thanks.
Yeah. Thanks Nina.
I'll ask Frank if you had any comments as well, but look I think the short answer is yes.
Lower is clearly better than our expectations that will be categorically different than what we saw with proposal have been much lower I think the sensitivity of these assays in the kind of mid single digit range and so I would say anything within that range should be completely acceptable as noise and will in our view lead to very low LDL in any reasonable patient.
So that's probably how I'd answer that question, Frank anything you'd add to that.
No I think that's it sounds like no.
Perfect Okay great.
I appreciate the question.
Yes.
One moment for our next question.
We have a question from Karen Jenkins with Goldman Sachs. Your line is open.
Yes, thanks, good morning.
Maybe a couple of questions from US first what can you share with respect to celebrate in the time from prescription to fill for tomo and it sounds like it's early but whatever color you can provide on refill rate at this point would be helpful.
Maybe I'll start there.
All of that.
Thanks, sure and I appreciate the question.
And I'll ask again, I'll ask Franco to anything to add here I think are our general view is.
Patients getting scripts filled has not been a significant challenge at this stage early in our launch, especially we were.
Heavily seeing fills through specialty.
Retail Durham, pharmacies, which which are a direct channel that the dermatologist work with all the time that were very knowledgeable about the talent knowledgeable about our copay card program and so on so I think that was helpful. At this point with our insurance coverage frankly, many patients who show up at the pharmacy or just covered at the pharmacy and so again feel was as easy as any other product at Walgreens or Cvs and so on.
I think we're not seeing much in terms of challenges getting scripts filled.
On refill rate look I think we've been happy to see growth in <unk> as well as well.
Well as good growth in <unk> and I think we're seeing a good number of refills.
In our view a measure of the fact that patients on drug are happy to be on drug and continue to use it and again, we don't have that duration limit. So I don't have much to add beyond the data of that said I think it's clear from our current refill rate as I said before that we will be in excess of steroids in terms of <unk> per year, Frank anything you can say on either of those points.
I think the only thing to add is as you know our coverage has been increasing meaningfully over time and that is.
There's a little bit of a lagging effect, obviously in how that coverage comes into play and implant its way into downstream plans and so I think I think youll CR.
The ease of prescriptions at the point of sale will only continue to get better as that coverage has come in and continues to come into place.
Okay helpful. And then as you think about I think you referenced some direct to consumer campaign and just how do you think about balancing that spend versus.
The coverage annual rates Youre working with today and how can that change over the course of the year.
Yes, I'd say, yes look it's a great question and obviously I think we've talked about this in various forms before early in the launch when we didn't when we didn't have the kind of payer coverage that we do know DTC is a real balancing act because you can definitely drive volumes or did you see.
But if youre not getting coverage youre driving volume that is not sort of.
Commercially helpful volume per se it does cut against GTS, where we are now with 76% commercial coverage.
In general demand generation is going to be helpful.
We've increased sort of the picture on DTC. The Durbin team has put together a great campaigns.
It's out there now that we're sort of still in the early days of figuring out exactly the right targeting plans and so we're getting real time feedback from the marketplace, but feel good about what thats going to mean I would expect to see that take some time to filter into the script trajectory as it takes a number of impressions before patients respond as you'd see it come into the office and so on.
So that's something to watch for through the end of this year and beyond but in general I think it will matter.
And then in terms of spend I'll just say it's included in the various guidance that we've given in terms of.
Where we expect it to be and I'd say in the Grand scheme of things it will be well worth it for the demand that we generate on the back of it.
Okay. Thank you.
Thank you thanks for your questions.
One moment, we have a question from Dennis <unk> with Jefferies. Your line is open.
Great. Thank you so much for taking our questions just.
<unk>.
Just two for me on <unk>.
Cross program, Thanks, Berke Perth diaphragm in your deck can.
Can you comment on if you will use similar doses as you could in theory could you explore higher doses.
Maybe talk a little bit more about the Biomarkers is this the same biomarker from UC and then number two.
I saw in your 10-K that for <unk>, 20% of patients who are biomarker positive did not give consent.
Can you confirm if that's true.
True and maybe give a little bit more color as to why perhaps the commercial implications there. Thank you.
Perfect. Thanks, So on the dose question I'd say, we're pulling from a similar range of doses in the Crohn study as Jim you see so I think that's the answer on dose and on biomarker. We are using the same biomarker algorithm in crohn's as we used in UC and our expectation is that the patient population.
Should be similar.
The patient population.
And our belief based on our understanding of our biomarker algorithm is that it should obtain equally problems. Obviously, we're excited to see that data from the study.
On your question about that.
<unk>.
Hi.
20% so.
So this is something we had shared at the time of the induction data basically the biomarker samples were gathered from all patients in the study.
But the analysis of those samples required a separate consent and the sponsor of the study did not obtain consent for 20% of the patients in the study for those samples to be analyzed because of local IRB and site policies.
Basically all of our biomarker data biomarker positive and biomarker negative effectively reflects.
80% of the study population.
Whereas all comers includes even those 20% of patients for which the biomarker data was not gathered.
Have no reason to believe there's any relationship between those consents and severity or anything else that the data are robust.
There is plenty of Ann but Thats just the way the study was conducted.
Great. Thank you and maybe as a quick follow up around the.
LNP patent litigation.
What's going on there.
The next update are we still waiting for that claim construction order maybe in 2020 quarter. Thank you.
Yeah. Thanks, So those cases and there are several of them at this point are ongoing.
And we.
We continue to be.
Pleased with the overall progress now that we're actually in the medium of the case.
We are in the discovery process and with the Donut case now.
And so you can imagine new information will be forthcoming that will affect the progression of the case, but most importantly, we're gearing up for that same thing construction hearing and claim construction order that will come at the beginning of next year that probably be the biggest most publicly visible next step, although plenty will be happening behind the scenes over the course of the fall.
Thank you.
Thank you.
Okay.
Thank you and one moment for our next question.
We have a question from Iran. Berber from Cowen Your line is open.
Good morning Julien.
Thanks for taking my question maybe.
Maybe just a follow up.
The question was <unk>.
Your line.
Alan.
Sure.
Just given on the fibrotic component.
This disease <unk>.
And then you obviously showed some data and endoscopic remission and GBP study can you just maybe comment on later.
<unk> disease.
Studies done in the past on this endpoint. Thank you.
Yes.
Perfect. Thank you. These are these are great questions back look obviously, yes. The study will show what it will show certainly the line of question that you're asking is one that we follow up to that.
Crohn's is an even more fibrosis is even more involved in crohn's disease. The reason you see and when we look at things like the specific markers of fibrosis that were identified advisors phase Iia study as well as <unk>.
<unk> mission to the Cleveland atrophy that we saw in our own phase III chronic period.
There's certainly reason to believe that we could potentially be.
Even more differentially efficacious.
<unk> CD.
And look agents typically that work in one typically work for the other.
So I think that's the other.
Other sort of generally historically true fact, and certainly of biology of <unk>.
Suggests the same would be true here and then look our Biomarkers I. Just said also we think should carry through and DCD and should give us an opportunity for a differential efficacy.
And a large subset of <unk> patients as well in terms of endoscopic remission, specifically, it's a good question I don't have a super specific answer I think.
Gross patients may have more tissue involvement in UC patients. So that may be a slightly tougher endpoint in that patient population, but on the other hand.
We're delivering an anti fibrotic benefit that could matter.
I would say it certainly seems plausible that we would see benefit and endoscopic remission as well.
Okay. Thank you.
Thank you.
And our next question comes from Brian Cheng with J P. Morgan Your line is open.
Good morning, guys and congrats on the progress and thanks for taking my question. This morning.
Maybe just first one on <unk>.
<unk> phase III trial design that you have ongoing for Crohn's.
Just curious if you can provide a bit more color on those and make you have selected specifically in that chronic period.
It seems that you it will be only be evaluating one specific maintenance dose.
Based on slide 23.
Just curious if you already have a sense of what the dose will be for the chronic portion.
Not what will be the deciding factors for the chronic portion and I have a follow up thank you.
Yes, Thanks, Brian .
Look I appreciate the question.
We believe we got a fair amount of information from the dose ranging in our UC study that has been helpful. In making a prediction here of a pretty robust understanding from our dose response, there that's given us a good deal of confidence in Crohn's dosing.
We are pretty confident that we know what our chronic period dose will be.
In the Crohn study so theres no.
There's not really any ambiguity for us in that.
For the same reason that we have not shared specific dosing information.
And you see we're not going to share our choice of doses at this stage.
For the <unk> study.
We will be happy to share those around the same time, we will ensure dose ranging data.
Do you see next year, but in general.
The response that has been identified and you see us generally predictive across IBD and so we feel pretty confident in our selection of doses. There as a reminder, we have very robust dose ranging data at this point a quarter for <unk>.
Okay.
I guess related to events, which I don't think a lot of investors have looked at yet.
Just curious one is how should we think about the timing for this update given that you will have you may know van data.
Yes.
And also you have posted an update out in the fourth quarter. So one is how should we think about the timing from the phase one two and then.
So what do we think about what should we think about the expectation for the lower risk Mds data.
How do you think about the bar there.
So for you to move forward to the next stage.
Yeah perfect. Thanks, Thanks, Brian that is a.
It's a great question Youre, absolutely right, we don't get it very often so the study for 2001 is an open label study.
We've had good progress on enrollment so we're going to have a decent number of patients worth of data.
We will provide the update probably pretty late this year.
Because.
The longer we wait the more data we have and I think we want to provide an update on the most comprehensive set of that data.
I think in terms of the bar.
As I think we've said before in the earlier.
Patients in the earlier study that ACI had conducted or the earlier portion of the study and as I conducted there were about at <unk>.
<unk> patients are a little bit less than 20 patients that had the sort of profile that we're looking for here.
We're sort of low risk transfusion dependent mds patients and we saw a sort of.
Little bit higher than 30% transfusion independence rate look I think what we're looking for here as we move into earlier line patients.
Is something that would be sort of obviously competitive with our superior to lift that receptor.
Which as I'm sure you know it was in kind of the mid Forty's.
In patients without prior Lenalidomide exposure.
Think that's probably the first thing the second thing we're looking for is.
We are hoping that a decent number of these patients will have this biomarker aberrant team of <unk> seed transcripts, where we saw a very high response rate in the earlier patients and if that's true we should be able to provide some update on how we're doing in that patient population and whether that opens up our precision oncology strategy.
That's broadly what we're looking for here.
We will share that update as I said very late this year.
Almost certainly after the other thing.
Great. Thank you Matt.
Thank you.
One moment for our next question.
We have a question from Louise Chen from Cantor Your line is open.
Hi, congratulations on the quarter and thanks for taking my question.
I want to ask you. If you were approved for atopic dermatitis is all the work or the payout.
Alright, with the wet AMD <unk> tomo psoriasis cannot elaborate.
Then secondly on rheumatoid arthritis is that a potential opportunity for <unk> and if so what do you think nickel or our plan would be there and then lastly, just wanted to ask you for PREPA sitting there.
Data readout coming at the end of the year, what do you think you need to see to move forward with this opportunity and why do you think you'll be successful when others have failed here. Thank you.
Yes. Thanks, Luis those are all good questions. It's been in the portfolio. So I'll take the term, but thanks for asking and thanks for listening as always.
So on the first one the short answer to that question is definitely yes that is all of the payer contracting work in psoriasis is extremely helpful. In atopic dermatitis, obviously at some level. There is an additional through formulary positioning question that needs to be answered because the cascade of therapies and <unk> is slightly different but the <unk>.
Tracking work all of the commercial work in psoriasis will translate and would be very helpful.
And getting quickly onto formulary in a day.
In terms of $14 two look the sky's the limit from an indication perspective.
Especially now that we think we have really the only true at home easy sub Q.
Any indications is eligible.
It's an interesting question biologically, it's probably not something that we were initially very focused on.
J&J has this ongoing study that they've talked a bit about and they've said, they're going to show that data. Later. This year you can imagine in auto antibody all RA patients that there could be an opportunity.
And I would say if the J&J RNA data looks good.
We are.
We could be.
Very quickly in frankly, a pivotal study if we needed to.
And compete with them, probably again sort of a more severe patient population.
That could be a really really exciting opportunity for 14 or two and give them 14 years, we've profiled a simple sub Q, what we believe will be the cleanliness on albumin LDL.
And the depth of Igt's Depression, we think that's an example of an indication where if J&J as data is good we think we.
Clearly to be the best in class agent.
Frankly, it could be neck and neck for first in class at that time as well so.
Really exciting possibility.
Ah.
On on breakfast sit and internationally, we've talked a little bit about this it's not a simple numerical bar.
Look I think it's about building on the data that we've already seen including data there.
As Jack one more recent data and patented <unk> JAK, one and then the data that we've seen in <unk>. There was a tick to combined with the knowledge that <unk>, which has now been in well over 1000 patients has outperformed the cross trial comparisons both Jack ones and twos across many many many studies.
It's been running five large late stage.
Phase III studies at this point and so look I think that combination gives us optimism that the agent could perform very well in <unk>. The other factor with <unk> you mentioned some of the challenge. So there is a base of these studies are difficult to conduct.
Pfizer has the conduct of the study, although we've had a lot of input.
We're doing everything we can to ensure including the study learned for many of the prior designs to optimize for the possibilities for success there.
Thank you.
Thank you.
Yes.
Okay.
Okay. Our next question comes from Douglas Tsao with H C. Wainwright Your line is open.
Douglas Please check your mute button.
Oh, sorry, I was on mute.
Can you hear me now.
Yes.
Matt Thanks for taking the questions and congrats on the progress just given what we saw from Tuscany, obviously with 31 on one youre starting the study in Crohns I'm just curious how.
Much more broader how are you thinking about the opportunity with <unk>.
That asset outside of IBD. So obviously crohn's is a natural sort of first step but are you thinking about other indications.
Yes. Thanks.
Look the short answer is yes.
We are thinking about opportunities that go broader.
Two other inflammatory disease.
Other fibrotic disease, I think the place given the quality of the data in IBD. The playing field is very large.
And so we're thinking about ways right now to narrow it down a little bit and figure out what our best lines are and we're looking forward to sharing more of that color.
As soon as we can look theres, just a lot of biology to support their vacation experience here and frankly.
T O N E knocks down so many different targets along the inflammatory and fibrotic axes that you can look at we have an impact on IL. Six you can look at <unk> look at the all of the many places, but TNF SAR. So theres just a lot of different places to go and I think our goal is to.
Be smart about it to find things that benefit from the full access to find big is big.
That fit from a commercial perspective, together with where we're starting.
Try and learn as much as we can from small studies to guide to guide our decisions.
That's all sort of to come soon.
And I.
I guess, Matt as a follow up within the portfolio Ini has certainly become a clear focus.
A business development standpoint, obviously, bringing in 31 on one.
Sitting up I'm just curious at this point with the portfolio. How are you thinking about the balance between bringing in new additional assets as they potentially might become available versus pursuing some of the natural.
Expansion opportunities or sort of just brought a new studies in different indications.
The initial targets. Thank you.
Yes look I think on the one hand.
We are very pleased with the coherence of our late stage portfolio.
The fact that we've built.
And ini pipeline that we think is among the best out there.
So I think we're proud of that and we think in so far as opportunity begets opportunity. We will continue to get calls and looked at lots of different things within ini that said when we started talking about the <unk> program.
Program with Pfizer <unk> hadn't yet presented itself and we obviously didn't have Tijuana, yet we still had I think at the time, we still had our sickle cell program and we Werent, obviously, an ini company and I think if we had said where something else company, we might not we might not have had the opportunity to work on <unk>. So I guess, what I would tell you is the next.
<unk> if it is outside of ini, but that attractive is still something we will work on it.
So look I think we see lots of opportunity in lots of places, we like the concentration, but not so much the debt.
But not so much that it would stop us from working on something else great in another area and we see plenty of exciting things inside and outside of Ini.
Okay, great. Thank you so much.
Thank you. Thank you I appreciate the question.
I would now like to turn the conference back to Mr. Matthew Cline for any closing remarks.
Yeah. Thank you operator, and thank you everybody for.
For dialing in this morning and for listening.
Major future calls in the space of a week.
We appreciate it we have a lot more share over the course of this year and look forward to getting back together.
Later in the summer so thank you again and have a great day.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Okay.
Okay.
Okay.
Yes.