Q2 2023 Aurinia Pharmaceuticals Inc Earnings Call
Greetings and welcome to.
[noise], Yeah Pharmaceuticals incorporated second quarter 20 twenty-three earnings call at.
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Now like to turn the conference over to your host Jamie Harel Investor Relations for Iranian Pharmaceuticals. Thank you you may begin.
[noise] you opt writer and thanks, everyone for joining today's call a webcast to review and discuss Irenaeus second quarter in six months of 2023 financial and operational results.
Joining me on the call this morning, or Peter Green Leaf Chief Executive Officer, and Joe Miller, Our Chief Financial Officer.
This morning, Urania issued a press release announcing his financial results in operational highlights for the second quarter and six months ended June 30th 2023 and.
In addition, the company filed his quarterly financial statements on Form 10-Q.
For more information please refer to Iranian filings with the U S Securities and Exchange Commission, which are also available on <unk> website at <unk> Dot com.
During this call Iranian they make forward looking statements based on current expectations. These forward looking statements are subject to a number of significant risks and uncertainties and actual results may differ materially.
For a discussion of factors that could affect erroneous future financial results in businesses. Please refer to the disclosures Erinyes press release and is clearly report on Form 10-Q, along with a rainy as annual report on Form 10-K, and all of its recent filings with the U S Securities and Exchange Commission and Canadian Security authorities.
Please note that all statements made during today's call. Our current as of today Thursday August 3rd 2023, unless otherwise noted at are based upon information currently available to us at this time, except as required by law Iranian since no obligation to update any such statements.
Now, let me turn the call over to a <unk> President and CEO Peter Greenleaf Peter.
Thanks, Jamie and good morning, everyone I want to thank you all for joining us on the call today.
On this morning's call, we will focus on the company's second quarter inch six month performance.
Our key commercial metrics furlough kindness as well as a brief update on R&D in our progress outside the U S.
I will then turn the call over to Joe Miller are CFO to provide additional detail on our financial results.
I'm pleased to share that we've continued to make significant progress over the last three months recording our highest quarterly sales since the launch of loop kindness with net product revenues of $41.1 million.
These results spring our year to date loop kind of snap product revenue through the end of the second quarter to $75.4 million.
That represents an increase of over 52% versus the mid year Mark of 2022.
Underlying this top line financial performance, we had our best quarter to date across a number of commercial metrics, including numbers wallet shift.
Patient conversion to drug <unk>.
Processing speeds in terms of time from psf to drug shipped.
As well as patient persistence rates.
Patients can vary from patient star forms to therapy was at an all time high of 89%.
Insurance processing speeds were improved as well we are now converting more than 65% of our patients from a natural psf to drug being shipped within 20 days.
And importantly are 12 month persistency rates improved from 51% in the last quarter to 54% in Q2.
Lastly, we now have a total of 1900 11 patients currently on therapy as of June 30th of 2023, and nearly 3500 patients exposed to the drug since launch.
As I stated on previous calls our business plan for Luke kindness is focused on three major interrelated strategies.
The first is driving patient awareness an activation.
The second being clinically differentiating loop kindness.
And the last is ensuring that patients get access to therapy because.
Cause of course getting patients on drug and keeping on drug is critical.
So how are we doing on the patient front, we believe an informed patient can play a major role in their own disease management by understanding the need for and seeking routine urine screening and treatment.
At the beginning of the second quarter, we announced and drove awareness across traditional and social media platforms with the launch of our unbranded disease awareness campaign get uncomfortable with our new spokesperson Toni Braxton.
This initiative reinforces the need for screening routine monitoring and treatment by engaging in educating SLE patience to get uncomfortable and get serious about their kidney health by engaging with their physician.
I'm pleased to report that through the first 100 days of this campaign, we've seen marked increases in overall awareness media impressions in online activity.
The campaign has already reached over 750 million people across social and digital media with hundreds of thousands visits to the campaign website.
Patients and family members are coming to our customer education web site to learn more about the importance of screening and early treatment.
Also this site is where patients can find a specialist in their area to complete routine testing and discuss management of their lupus nephritis.
While our consumer marketers are reaching patients via social media indirect a patient marketing campaign or commercial sales team is continuing to drive in in the field execution by delivering the loop kindness clinical message.
They are reinforcing the treatment guidelines for patient screening and treatment as well as the Aurora data to our top decile customers.
On our last call we shared that we closed Q1 with our highest average health care provider engagement per day since launch.
In March we had our highest number of repeat in new prescribers in a month since we've launched the product.
As we previously communicated loop kindness is a highly sensitive to promotion drug and there is a strong correlation between call volume in prescribing behavior.
Well today I'm happy to share that we continued that momentum into the second quarter and beat our first quarter watermark. This makes the second quarter of 2023, our best quarter to date in terms of call activity towards healthcare professionals, providing deeper penetration into top decile positions as well as the first time.
And repeat prescribers.
A recent attitude awareness and usage market research study reinforces that are clinical messages resonating.
Intend to prescribe continues to grow and is on the all time high.
Additionally, loop kindness is leading over other therapies in the category unintended to prescribe over the next 30 days and over the next three months.
In regards to our second imperative clinical differentiation, we're excited with the new data, which we launched into the market that further differentiates loop kindness from the current standard of care.
Our medical Affairs team recently released the biopsy Strep study from the Aurora trial.
This poster was presented at the Congress of clinical Rheumatology East. These.
These data demonstrated that loop kind of treated patients showed histologic activity improvement with stable Chronicity score similar to the active control arm of MMF enlow dose steroids alone.
Meaning that the patient's kidney appears to be stable and does not demonstrate any further worsening of kidney function or nephrotoxicity <unk>.
18 months.
Additionally, the Aurora too long term extension study of the Aurora trial looking at Egfr efficacy and safety across two and three years was accepted and published online and arthritis and rheumatology.
A and R. As the official journal of the American College of Rheumatology and it should be in the journal during the month of September .
These two publications provide our medical affairs team with more data to share with prescribing physicians.
These publications reinforce why I live kind of should be the drug of choice and the management of lupus nephritis.
These data also further differentiate loop kindness from the current standard of care across numerous parameters.
Specifically, we're looking at three year, Egfr efficacy and long term safety.
All of the aforementioned activities are having a measurable impact on patients physicians and of course loop kindness.
By educating and activating the patient to get involved with their lupus nephritis care through our consumer marketing campaigns alongside our sales team messaging to physicians, we are helping to expand the market and drive further prescribing.
This leads me to our patient star form activity for the second quarter.
We had a solid performance with Psf's for Q2 totaling 451 patient star forums.
This represents an increase of approximately 10% over the second quarter of 2022 and is reasonably consistent with our first quarter performance of 2023.
Through the end of July we've recorded approximately 100, new psf's.
We can say with certainty that there's this summer effect to erlang care when it comes to seeing patients screening them and absolute treatment. We believe it is most likely due to the asymptomatic effected the condition and patients not feeling the need to check in with their rheumatologist or nephrologist.
During the summer months.
Also there were fewer selling days in July and the timing of the July 4th holiday took more people out of the office.
That said our business fundamentals remain at an all time high all of our other marketing metrics or positive and we believe that Psf's will return to growth over the coming months in in the fourth quarter.
As I referenced earlier in the call. During this period or conversion rates that is converting patient star forms to patients on therapy are at an all.
All time high with about 89% of patients converting on the drug.
Our team is made further progress and continues to reduce time from psf to submission to conversion to patients on drug with approximately 65% of patients getting on therapy, and 20 days or less this continues to improve over the past several quarters and is up over the <unk>.
First quarter of 61%.
Meaningful progress and improvement on all fronts.
At the end of the second quarter of 2023 about 54% of patients remain on therapy at 12 months.
This is an increase over previous quarters.
We are extremely pleased to see this level of patient retention at 12 months. It shows loop kind of persistent C. As in line with the war actually better than treatments for other chronic diseases.
And May we reported about 47% of patients remain on therapy for 15 months and we're now seeing that more than 48% of patients remain on therapy. At 15 months is the number of patients across that time period continues to grow.
And while we've only seen a small number of patients through 18 months of therapy about 44 per cent remain on therapy through that time.
This is up from the previously reported 41 per cent.
We believe this persistence he can be attributed to the products efficacy and safety profile up to three years and are patient support programs pulling through the work that's done by or any alliance.
Consistent with prior periods patients adhering to treatment regimen that is dosing in tablets per day continues through to be stable at approximately 80% to 85%.
Based on everything I've, just discussed we're increasing our net product revenue guidance range from the updated guidance. We gave in Q1 of $135 million to $155 million to $150 million to $160 million for the year 2023.
Turning now to our R&D activity.
We remain on track to filing an I N D for AUR 200 by the end of the year.
And we continue to enroll in our lupus nephritis registry and our post approval regulatory commitment of a pediatric study.
Lastly, let me close with our globalization effort per loop kindness.
Our partnership with Asuka has resulted in significant launch momentum outside the U S. This year.
Our partners now launch loop, kindness, and Germany, Austria, Sweden, Finland and Norway.
Luke kindness was recently approved in Switzerland, and has received formal reimbursement approval in both the UK and Italy.
And as a reminder, upon pricing and reimbursement approval and three of the five major you countries. The company would be eligible for an additional 10 million dollar milestone for mazzuca, which we still expect in the second half of 2023.
In addition, our work in Japan remains on track for regulatory submission towards the end of the year.
Upon approval in Japan, we would be eligible for an additional 10 million dollar approval related milestone along with low double digit royalties on net sales once the product is launched.
So with that I'd like to turn the call over now to Joe for more detailed review of our financials and all then return at the end of the call for a quick recap.
Open up the line to see your questions you might have so with that let me turn it over to Jo Jo.
Thank you Peter and good morning, everyone as of June 30th 2023, we had cash cash equivalents restricted cash and short term investments of $357 million compared to $389.4 million at December 31st 2022, and $361.5 million at the end of the first quarter of 2020.
Three the decreasing cash cash equivalents restricted cash and investments is primarily related to the continued investment and commercialization activities postapproval commitments of our approved drug looped kindness inventory purchases advancement of our pipeline and the second capital expenditure payment for the motto plant partially offset by.
An increase in cash receipts from the sales and with kindness.
We believe that we have sufficient financial resources to fund our operation, which include funding commercial activities, including F. D. A related post approval commitments manufacturing and packaging of commercial drug supply funding are supporting commercial infrastructure advancing our research and development programs and funding are working capital obligations for at least the next few.
Yes.
Now, let's take a few minutes and go into detail regarding our financial results for the second quarter and the six months ended June 30th 2023.
Total net revenue in the second quarter increased 47 per cent to $41.5 million from the prior year second quarter of $28.2 million.
Total net revenue increased 52% to 75.9 million from $49.8 million for the six months ended June 30th 2023, and June 30th 2022, respectively.
Increase is primarily due to an increase in net product revenue from our two main customers for loop kindness, driven predominantly by further penetration into the Ellen market.
Net realizable revenue per patient for lip kindness remains higher than our initial guidance of 65000 per patient per year on a quarterly basis.
As we discussed previously we expect net realizable revenue per patient to continue approaching this finger on an annualized basis as more patients go on and stay on therapy over time, and as persistency dosing impair mix evolve.
Total cost of sales and operating expenses for the quarters ended June 30th 2000, twenty-three and June 30th 2022, $57.7 million and $64 2 million respectively.
Total cost of sales for the six months ended June 30th 2023 was $121.7 million versus $123.7 million in the prior year period.
Let me know I'll give you a further breakdown of operating expenses drivers and fluctuations.
Cost of sales were 1.6 million for the quarters ended June 30th 2023 and June 30th 2022.
Sales were 2 million and $1.9 million for the six months ended June 30th 2023, and June 30th 2022, respectively.
Lots of sales for both periods remain consistent do an increase of revenues offset by right down to the F. D. A process validation batches that occurred during the second quarter of 2022.
Gross margins for the quarters ended June 30th 2023, and June 30th 2022 was approximately 96% and 94%.
Gross margin for the six months ended June 30th 2023 in June 30th 2022 was approximately 97% and 96%.
Selling general and administrative SG&A expenses inclusive of share based compensation expense, we're $47.1 million and $51.5 million for the quarters ended June 30th 2023, and June 30th 2022, respectively.
SG&A expenses inclusive of share based compensation expense, where $97.2 million and $96 7 million for the six months ended June 30th 2023, and June 30th 2022, respectively. The.
The primary drivers for the decrease in SG&A expense was a decrease in professional fees and services, including legal fees incurred during the respective quarters.
For the six months ended June 30th 2023 compared to the prior year period. The increase was due to an increasing share based compensation expense and marketing expenses upset.
Set by decrease in professional fees and services, which includes legal fees.
Non-cash share based compensation expense included within SG&A expense for the quarter was 9.8 million versus 8.9 million for the prior year period.
Cashier based compensation expense included with SG&A was $17.4 million and 14.9 million for the six months ended June 30th 2023, and June 30th 2022, respectively.
Research and development R&D expenses conclusive sure based compensation or $12.7 million and $11.5 million for the quarters ended June 30th 2023 and June 30th 2022.
R&D expenses inclusive of share based compensation expense or $25.8 million and $24 1 million for the six months ended June 30th 2023, and June 30th 2022, respectively.
Primary drivers for the increase for the quarter and six months ended June 30th 2000 twenty-three as compared to the same periods ended June 30th 2022, where an increase in salaries and related employee benefit costs sure based compensation expense.
Clinical supply costs and the company advances and say you are 200 or 300 programs and fulfills the post approval FTA commitments related to the kindness <unk>.
The increase was partially offset by decreasing contract resource organization costs related to the completion of the Aurora two continuation study and drug drug interaction study, which was substantially completed in 2022.
Non-cash share based compensation expense included within R&D expense was $2.1 million and $1.1 million for the quarters ended June 30th 2023, and June 30th 2022, respectively.
Cashier based compensation expense included within R&D expense was 3.7 million and $2 million for the six months ended June 30th 2023 and June 30th 2022.
Other income net was $3.6 million and 500000 for the quarters ended June 30th 2023 in June 30th 2022, respectively for the six months ended June 30th 2023. Other income expense net was $3.3 million in income versus 1 million expense in the prior year period the.
The increase in other income is primarily related to a change in fair value assumptions related to our deferred compensation liability coupled with the foreign exchange gain related to our motto plant finance liability.
Interest income was 4.1 million at June 30th 2000, twenty-three versus 500000 for the prior year second quarter interest income was $7.9 million and 700000 for the six months ended June 30th 2023, and June 30th 2022, respectively.
Increase between periods is due to higher yields and or investment as a result of increased interest rates.
But the quarters ended June 30th 2000, twenty-three arena recorded a net loss of $11.5 million or eight cents net loss per common share as compared to a net loss of $35.5 million or twenty-five cents net loss per common share for the quarter ended June 30th 2022 for.
For the six months ended June 30th 2000, twenty-three arena recorded a net loss of $37.7 million for 26 cents net loss per common share as compared to a net loss of $73.1 million or 52 cents net loss per common share for the six months ended June 30th 2022 with that I'd like to hand, the call back over to Peter for some closing remarks Peter.
Thanks, Joe as you heard throughout the call, where obviously excited about our strong results for the second quarter and our momentum through the first half of the year hitting many all time highs across the business.
We remain focused on delivering loop kindness to patients in need and driving results in the U S and globally and we look forward to keeping you posted along the way I want to thank everyone for joining US again for the call will now open up the call for any questions you might have.
Thank you the Florida, how open for questions. If you do have a question you May press star one on your telephone keypad at this time. If your question has been answered you can remove yourself from the queue by pressing one again, ladies and gentlemen, it star one.
My first question comes from Joseph Schwartz from Lyric Partners go ahead Joseph.
Hi, This is <unk>. This morning, and thank you for taking our questions and congrats on there the progress this quarter to one for us to start just on seasonality tend to kind of keep it on the market for several years now and as a company is more experienced the launch can you maybe provide some color on the strategies in place to help.
Mitigate this impact of seasonality and ask you to look to the third quarter, how should we be thinking about sales relative to the prior quarter and have a quick follow up thank you.
Let's see thanks, well so I you know as I said on the call. If you. If you go back not just quarters, but the last few years since launch we've seen an impact in the summer time, and I think moving into this summer. Our biggest question was being able to peel back whether.
The impact was I.
I hate to seasonality cause it brings people to viruses and infectious disease more so than you know typical specialty business, but but clearly in our business. The question was.
Is this is summer effect or was it a COVID-19 hangover COVID-19 impact prior during the company. The shutdown, we song Covid and I think what we've clearly seen coming into this year is that during the summer time, there's an impact on patient flow. So because this is a quiet disease and patient.
And an asymptomatic patients aren't running into the physician office during the summer months to get regular screening second that that we've seen office staff physicians et cetera spending less time in the office, we clearly saw that during the month of July and.
And we can track this not just through what we hear qualitatively, but we can see it quantitatively and our numbers in the diagnosis numbers that we track and even in the testing numbers have we track and then lastly, you know even even in our own company. We have the effect of people, taking summer vacations et cetera, even though we manage that.
Can manage that clearly the easier time periods, where there's just less activity. So if you look at the July performance as it relates to PSS, because we've not we've not talked about you know patients on therapy, we've not talked about <unk> revenue performance through the first month of the of the quarter three.
Clearly, we've we've seen some impact, but if you look at the trending so far this year in the trending into July it's fairly predictive of what we've seen over the last two years.
So R. As we sat on the call belief is that we'll get back to a growth pattern as we move into August and we'll see that get back to continued growth into 2423 in queue for just like we saw last year. So we we feel confident that we'll be able to continue on the growth pattern, but as.
As thinking about forecasting this business moving forward and although we don't give quarterly guidance, it's clear that during the month of July .
Time period that we see a little bit of a depth and that this summer has impact your question on mitigating strategies, while we do everything from special incentive compensation and our sales organization to increasing the flow of our marketing spend two targeted initiatives during the summer time to try to it.
Increase awareness of patients to continue or have continuity within their care and you know really we put a bullet during pre summer and through this summer. So that's why I say this as a predictive thing that we're going to have to continue to manage through and I think as I think about forecasting the business Ford at this summer is going.
Be something we need to take an impact as being potentially softer than other quarters on a go forward basis in the queue for we feel very confident not just based on past trends, but the tactical activity, we have and the the amount of emphasis we're gonna have you know in terms of the flow of our tactics people in field and laugh.
The Aurora too messaging that we're working through our medical team and through the publication. That's now been initiate it issued out there I think we'll have big impact as well and remember the extension study was a three year data not just looking at safety measures like Egfr, but also bomb clinical efficacy.
Measures as well.
Great very helpful. Thank you and then if I could just sneak in a quick follow up here could you just remind us on the biopsy data. If you are gonna be submitting the C. F D. A and what your thoughts are potential timeline for an updated label to include the theater. Thank you.
Yeah. So the short answer is we've been in regular dialogue and have submitted a package of data to the F. D. A not just including the biopsy data, but also including the extension data and other cuts of data that we have from the original Aurora trial as we've said in the past you know our goal will be to.
Try to get this added to the label, but that's in negotiation with the F. D. A we don't have a set timeline for it but when we get more concrete dialogue back from the agency will communicate that to you. Our hope would be we believe this is extremely important to the prescriber and can affect.
You know the patient benefit so that's the way we're positioning it to the agency, we think it's important as to where it will appear on the label how to fix it you know affects the indications statement usage statement and or the clinical trial section has to be determined but no that we've we pack.
It's to the agency and our hope is that we're gonna see this appear and hopefully appear prominently but that's a discussion we have to have with the agency.
Great. Thanks again.
Excellent.
And our next question comes from Ed <unk> from H T. Wainwright go ahead at.
Hi, good morning, everyone and thanks for taking my questions and congrats on the corner.
So I just wanted to ask.
Sort of what underlying drivers are here I mean, this is the second sort of being raised quarter in a row.
And.
Are are down slightly this quarter, while all other metrics are basically.
Your all time highs.
And there hasn't been a pricing change since December of 21, So I'm just wondering.
How you would characterize as sort of put some pics and how you get too.
The increase in New York.
And then I have a couple of calls.
Okay. Thanks for the question that yeah, I I think you characterized it well I mean, we were just about every metric retract into business was at an all time high in the quarter and we saw that last quarter too so whether it's converting patients onto drug we're doing it faster keeping patients on the drug.
At three months six months nine months 12 months, you know 15 months 18 months, all seem to be doing well and in some cases improving right.
These these types of measures and then compliance to the regimen has been fairly consistent but but in the past two quarters has been almost at an all time high too so with those types of measures, we're keeping patients keeping patients on drug obviously those are having impact on revenue every quarter.
We look at PSS as are leading indicator R. R. N R X R equivalent of in N R X and that.
Leading indicators won't change in terms of the measure until we change we would have to change our distribution pattern in order for that measure to change. So for example, we do limited specialty distribution and the.
Prescription star former the patient Star form is our initial prescription process. If we were to open up our class of trade go broader you could see you know typical I Q V. A data and prescribing data to become more of an actual prescribing at the retail level to become more important but at this stage, it's not for us but it.
Is a leading indicator and if those patients are getting on now as we said 20% are at 20 days 65 per cent or get non drug there's at very least 465 per cent of our patients 20 days delay before those psf's become reality so any prior quarter, we're working knows psf's from that.
Prior quarter in the current quarter. So all of your financial metrics can continue to grow.
The way I think about Psf's is you know eventually when you six Sigma this business and you work every angle persist and see getting patients on drug fast or keeping them on drug you're eventually going to a psf's don't grow you could hit a a point in your business, where you stopped to stop <unk>.
<unk> new patients come into the mix, but that can still be offset if you see improvements in persistent C. At 18 months said 24 months et cetera, like if we weren't keeping.
40, or 50 per cent of our patients out to three years, Ed you need to bring less patience into the mix in order to keep growing revenue and that'll be a continued learning process as we go through the years of of the product one thing I do want to just correct. I think you said pricing we haven't taken it since 2021, we did.
<unk> 20th you.
You said 2021, we did take a price increase in 2022, which I think and I chose here with me was a total of 779% and through our some of our contracts, where we have a price control mechanism in there for annual price increases it's.
Good to think about our our price increase of the year at or around three ish or so per cent that will net now with some of the agreements that we have in place.
So I think I answered some of your question, let me just check in to make sure. That's what you were looking for.
That's very helpful. I appreciate that and then.
I think.
May have mentioned this before but I didn't I didn't get the number this metric of new patients on therapy. If you have that for this quarter.
Q1.
And then lastly, if you could repeat the milestone payments that you would expect we'd be becoming approvals and launches X U S.
As much.
So within within the quarter itself in terms of new patients on therapy, we had approximately 190, new patients on therapy and a quarter. Your question on milestones and this is driven from our X U S agreement with Asuka, there's two in the knee.
Near term that that we've guided too and and talked about on the call. One is of course in Europe . We continue to get countries approving the drug we have a global you approval, but then the end of the individual countries are doing their own assessments and that continues to go well, but our agreement is.
When three of the five top countries and the E U get pricing approval, which is separate obviously then from actual drug approval in the country. Then we have a 10 million dollar milestone coming from Mazzuca, and we've said, we believe that can happen in the calendar year towards it.
Back half of the year. The second near term milestone is the work we're doing in Japan. We said that we believe we can submit to the P. M. D. A by year end and if we do that under normal review cycle. You should see you know in 2024, but could bleed into <unk>.
Thousand 25, if you have a longer review cycle, a 10 million dollar milestone upon the approval of the drug in Japan and included in that of course, we get low double digit royalties and we have a cost plus management supply agreement with two goes well.
Great. Thanks, so much.
Like I said.
And our next question comes from Jacqueline Lou from Oppenheimer Go ahead Jacqueline.
Okay. This is jacqueline.
Thank you for taking our questions breakfast.
[noise] 12 months would you be able to hear how does the evolving.
Evolving.
<unk>.
Kind of.
<unk>, having especially gave him to add a public.
That's kind of <unk>.
That's a good question. Thank Ya Jacqueline so first off as we've said and I I hope people appreciate that we give metrics to the point, where you know when I go back and look at our transcript them down. So many numbers out there that you guys must have to go back and actually read the transcript to get all the numbers. So just appreciating the fact that.
When we have meaningful information quantitatively, we liked to report it do you think it's important just to give the perspective. So we've not given out to you know 24 months at this stage in the reason for that historically has been when we don't have enough of an N or enough of a number of patients coming into that time pier.
<unk>, we don't Wanna, Gabe and insignificant projection and we've gone pretty low on those numbers, but costing 24 months right. Now we just when we have enough patience crossing that time period will be more than happy to to to provide what that estimate is but as we said on the call 12.
15, and 18 month persistency have all improved they're all around you.
In the vicinity of previously reported but they're up single digit percentages over where they've been so we believe some of our initiatives are helping that we also believe compliance to the dosing regimen on a 30 on a 30 day basis is due to a lot of the work we're doing around persistent seats were Rennie Alliance you the patient.
Awareness programs that were doing et cetera, you know I was I was talking to a commercial team just yesterday one of the interesting ones that I hope will be able to report at some point is what a diagnosis rates look like and are we seen an uptick overtime in the number of patients sort of filling the top end of the funnel in terms of being <unk>.
Noticed with Lucas Friday, because we think there is a big opportunity there as well and are Toni Braxton get uncomfortable campaign centers on a lotta that I'd just staying on your medicines, but also if you have lupus going in and making sure you get checked for kidney related problems anyway will report when we get to 24 months is enough patients, but all.
Other metrics, we've reported up to this point in terms of persistence of Europe .
Great. Thank you.
And our next question comes from David Martin from room burden go ahead David.
Hi, guys. Thanks for taking my questions.
Let's see.
Wondering when patients come off with kindness.
For a period.
And therefore dogs think.
Patients can take a holiday on the drug or does it rebounded quickly.
Should the patients come back on quickly.
So when patients come off of drug it is for as we said in the past David a host of different reasons. It can be anything from patients being lost to follow up to patients deciding they don't want to take the drug anymore to a physician deciding clinic.
Glee that they're gonna put him on a drug holiday because they're proteinuria has reduced which by the way it does not align with guidelines, but we do see happen to you know like the list is long all I can tell you is it usually dark driven or patient driven not payer driven in other words, he patient cross the year.
And after a year payers are saying they won't pay for the therapy.
In terms of the positive around like how can you.
If a patient disc continues off of drug do.
Do they come back we do have data, while Bob, albeit not we've not like posted quantitative numbers on this we do know that patience.
And physicians proteinuria elevates again, they they get them back in control and they they almost treated not the majority of physicians, but a grouping of physicians treated there was almost a flaring in remitting disease. Although there is not a guideline out there a program that I've attended to talks about it that way the positive is.
Patients, who do get on our drug can be re addressed with drug so and we do see that happening.
Okay great.
So you.
Strategic review that could possibly includes.
When you had your Q1 call.
Adamant.
Company now.
Do I I'm wondering what are the factors.
Two you changing your mind.
It has changed a bit but you know what.
Why have you changed your mind.
So I just to qualify what I may have said in the first quarter, you know I guess from selling the company standpoint.
I don't necessarily see that as something that's determined by us per se. The S. B two parties in that equation and you know we're a public company, we have a fiduciary responsibility to shareholders. You know it it's we have to always keep.
Keep an open mind to all strategic alternatives and we announced back in June that we were exploring strategic alternatives and as we said we were doing this in response to request from shareholders.
So first exploring we believe exploring strategic alternatives is something that that our leadership team actually does every day.
You know this review May or May not result in a transaction and the nature of that type of transaction could be anything from an outright sale of the company to emerge or to the company requiring your licensing and I'll set to doing nothing and just staying the course and continuing to grow loop kindness and the company and then second in particular, but given the folsom.
This of what a strategic review is because you went right to selling the company and as we've said, we're looking at strategic alternatives, because it's fulsome in nature.
We're not gonna get on every call and say where are we with the strategic review process until we concluded upon it but I you know to your first point about you know Adam being adamant against the sale of the company, it's not probably what we've ever said I think that takes two to tango in that exercise and we are a public company and we understand our.
Fiduciary responsibilities. So we're always open to strategic alternatives for the company outside of what we're doing right now.
Okay got it thanks.
Thanks, David.
And our next question comes from Stacy <unk> from T. The account go ahead Stacey.
See thank you so much for taking our questions and congratulations on another very strong quarter.
So we've done some clinician text on a little kindness and it's striking that all their conditions are very aligned in their longterm positive views on long term potential, but even among those questions. There's prescribing it's very diverse.
Could you maybe speak to a little bit on what you are seeing right now in terms of the percentage of patients that are getting prescribed blip kindness for induction alone versus maintenance alone versus both induction and maintenance.
We can get a sense of how look kindness is being used right now.
And where do you think this adoption pattern will change as longterm experiences gained in in light of the new published data.
You know how long patients stay on drug or the time periods of time intervals in the percent of patients on drug at time intervals that we report as the best way to say Howard Ducks, using the drug right and while there's a multitude of different reasons as to why patients and our doctor discontinue I think the percentage that cross.
A year the percentage across 18 months and two years says something about the how the drug is actually being used we've seen physician lectures from <unk> from the top thought leaders out there they'd say well how long should I actually look to maintain patience and while the guidelines are pretty open ended on this they say you should get a patient under control and <unk>.
Keep them under control, we've heard numbers like three to five years patient should stay on therapy, but there was a mix of of how physicians do that whether they put them on our drug to induce put him on Ben listing combination keep them on M. M F and steroids over the long haul there's a host of different strategy.
That are being being enacted out there and I think there's huge opportunity by data to drive data driven answers to that question. Because there is a lot of new data out there that should drive physician practice and new data being produced that will continue to evolve it so I think.
Our persistence the numbers that we report across the time periods. We do is the best way to look at.
Whether there's induction and maintenance.
50 per cent or so of our patients are still seeing drug at or around 12 months. That's the best way to think about it and it looks like after 12 months that the curve starts to flatten out more although it's declining it flattened you're not seeing 30 and 40 per cent reductions per month.
On your question about your Doctor or your comment on Doc checks listen to all of our awareness usage data and predictive data, which is more qualitative but we try to take a represents a representative sample of our.
Physician call on universe says they intend to use the product in the next 30 days they intend to use more of it over time and it's all extremely positive to oversimplify, how we need to deeper panic penetrate one is on the patient front, we've gotta get all physicians to.
Universally see that a patient when they're when they're you know at you know a gram of protein that this is inappropriate patient to treat you know there's wide differences in how physicians see and don't at least from what we see always follow the guidelines how aggressively they treat some wait till.
Patient is at three to five grams of protein area of protein in the urine before they actually call. It L. N and if you look the guidelines of guidelines get to L. N at a much lower level. So we've got a push that continuum down and then lastly, we gotta get we have to continue to work on our prescriber base we have to.
To continue to expand the total number of traders and get more depth per prescriber and both of those have have increased significantly year to date, but we we have a we still have a ways to go in terms of the adoption curve.
Perfect. Thank you.
And our next question comes from Maury Ray craft from Jeffries go ahead Maury.
Hi, good morning.
Congress and to update and thank you for taking my questions.
I just wanted to clarify what proportion of prescribed repeat prescribers.
And then on the basis.
What are you hearing from patients remain on therapy.
Can you repeat the second part of that question because I was still just I was I didn't catch it.
And then on the patient side.
Hearing from patience for them to remain on therapy for longer term.
So we've not given percentage penetration numbers, but in terms of total number of prescribers, we're probably at or around call at 1500, prescribers and growing on that have utilized.
Is the product of date and.
A large percentage of that number Ah repeat prescribers so.
We've also said that are decile seven to tens are are are highly concentrated group in terms of the prescriptions that they do so this is not a disease, where you should be thinking okay, well, how many rooms, how many naps and I gotta get all of them using some room. Some naff street very little of this disease, so, but we want to see <unk>.
And this is obviously not.
It is not congruent with the with the guidelines that are out there. So all of these numbers have been improving.
Are on a good pace, but in order to increase Psf's, an increase the revenue run rate, we've gotta go deeper and wider.
Got it.
And then your question on patience I didn't answer so let me quickly answer.
I'm not sure we've seen market research from the patient side to say, what's gonna get him on drugs and keep them on drug we do know that they need to be made aware of the seriousness of their condition. When you have S. L. Lee the predominance of the management of the disease.
Around fatigue and skiing enjoying the things that actually you feel every day. It's the underlying things you don't feel that are the most impactful and can be the the most significant in terms of bad outcomes for the disease like proteinuria and the tactics were using weather.
The Pee in the Cup campaign or the get uncomfortable campaign with patients are to educate them on the more severe component of their lupus and what they need to do to get and acted in part of that messaging is to stay on drug I think the best way to measure the effectiveness out because we don't I.
At least in front of me have a qualitative metric is to look at our persistency numbers and say is it happening and look at our adherence numbers to prescribing regimen and to say if it's happening in both those metrics are not just doing well, but improving so far every quarter.
You mentioned an increase in revenue from two main customers.
If we can prevent them more color on that.
Yeah, we have a limited distribution model, we have two specialty distributors and we've always and Joe section because it's a financial qualification we recognize revenue when we shipped to those D. C's.
Got it and the last question I guess.
Smart.
At this point.
Got it thank you so much.
Thank you.
200 300.
Under that will that will then be able to engage in more of a conversation as to where this goes how it competes where you're going to develop it all all the right next questions for an early stage asset moving into and I and the filing.
We're still doing some tweaking on the formulation and we think that to 24 deliverable for I N D. Nothing off target there in terms of our previous projections, but Ah no change on either and then.
Pipeline you know to some degree was was X.
To a big degree was external as Asian or business development, obviously, I would envelop that into the strategic review process. We're looking at right now.
Alright, great. Thanks, so much.
Thanks, Justin.
Okay. Operator, if that's our last question I just want to close by saying. Thank you for all all for joining US today, we look forward to update you in the next quarter have a great day.
Thank you. This does conclude today's conference. We thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
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