Q2 2023 Travere Therapeutics Inc Earnings Call
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Good day and welcome to the trivia Therapeutics second quarter 2023 financial results and corporate update conference call. Today's conference call is being recorded at this time I would like to turn the conference call over to the Vice President of Investor Relations. Naomi Eichenbaum. Please go ahead Naomi.
Thank you good afternoon, and welcome to <unk> Therapeutics second quarter 2023 financial results and corporate update call. Thank you all for joining US today's call will be led by our Chief Executive Officer, Dr. Eric Dube bag, Eric will be joined in the prepared remarks by Dr. Julie <unk>, our Chief Medical Officer.
Sir Peter Afirma, our Chief commercial officer, and Chris Klein, Our Chief Financial Officer, Dr. Bill Rote Senior Vice President of research and development will join us for the Q&A session. Before we begin I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward looking statements within the.
<unk> Harbor provisions of the private Securities Litigation Reform Act of 1995 forward looking statements are not guarantees of performance. They involve known and unknown risks uncertainties and assumptions that may cause actual results performance and achievements to differ materially from those expressed or implied by these statements. Please see the forward looking.
Statements disclaimer on the company's press release issued earlier today as well as the risk factors section in our Form 10-Q, and 10-K filed with the SEC. In addition, any forward looking statements represent our views only as of the date such statements are made August 3rd 2023, and traverse specifically disclaims any obligation to update such.
Statements to reflect future information events or circumstances with that let me now turn the call over to Eric Eric.
Thank you Diane and good afternoon, everyone.
The first half of 2023, we made significant progress on our corporate strategy of delivering new treatment standards from our pipeline of innovative medicines for people living with rare disease.
Our growth has been led by the ongoing successful launch of Pillsbury or sports center. So.
So as far as the first and only non immunosuppressive therapy.
Therapy approved for the reduction of proteinuria in adults with Iga nephropathy or at risk of rapid disease progression.
We believe that so far as holds the potential to help 30000 to 50000 addressable patients and our field teams continue to hear from Nephrologist that their experience with <unk> is reflective of an efficacy and safety profile demonstrated in the interim readout from the protect study.
In fact last week I spent a day in the field with a bill as far as sales representatives visiting community Nephrologist.
One physician surety compelling patient story about a young woman with I guess at risk of rapid disease progression and struggling with proteinuria levels above two grams per day, despite treatment with several therapies.
After a few short weeks until Sparger proteinuria level has significantly dropped below one gram per day.
A physician noted that these types of results provides us with confidence to prescribe <unk> to a greater number of their addressable patients with I guess.
We're encouraged to hear this positive feedback from the field and the nephrologist or both re prescribing and proactively identifying more eligible patients to use <unk> in their practices.
Insights on physician feedback and demand provides us with confidence in the potential of <unk>.
Ultimately become a new treatment standard for <unk> in.
In the second quarter of 2023, we executed on our <unk> strategy and are observing strong performance on the two most important indicators of success.
<unk> reflected in the growth of patient start forms for PSS and patient access driven by increasing and broader payer coverage. In fact, we delivered the highest number of PFS in the first quarter launch.
This launch amongst other rare renal launch benchmarks.
Later this year, we expect to announce the complete results from the protect study that we believe will have the potential to support traditional approval and the potential for a broader label I feel sorry again. The study is ahead of our initial guidance and we now expect a top line readout from protect late in the third quarter or early in.
The fourth quarter.
Looking beyond the U S. We continue to work with our collaborators CSL before regulatory reviews in Europe are underway for <unk> and we anticipate an opinion from the <unk> around the end of this year.
Our top priority is ensuring a successful launch of <unk> and we believe that we are off to a strong start in parallel. We have also continued to make progress on our other pipeline programs. We continue to believe that <unk> may represent an important treatment option for patients with <unk> in May we reported topline results from the phase III duplex.
Study of <unk> and <unk>.
And which percentage demonstrated significant and durable effects of proteinuria reduction positive trends on Egfr and a well tolerated safety profile over two years of treatment. While the study did not achieve statistical significance on the Egfr endpoint. We are encouraged by the totality of data we are scheduled to meet with the FDA.
To explore the potential for a future regulatory submission for <unk> and <unk> and expect to provide an update on that discussion in the fall.
Shifting to back to that with.
With the recent positive update from cohort six we are even more confident that take about <unk> represents a significant opportunity for us to help patients with HCA, you and for our company to accelerate our growth in the coming years.
Based on our growing body of market research, we understand there to be a population of approximately 3500 addressable <unk> patients in the U S.
Similar number in Europe , and a meaningful number of patients in additional geographies.
Importantly over time, we see this addressable patient population potentially increase by 50% or more with the introduction of an innovative new therapy and advancements in diagnostics.
This is why we are excited to continue focusing our efforts on this program and we are working towards initiating the pivotal study by year end.
Outside of our innovative pipeline, we recently announced that we've entered into an agreement for the sale of our bile acid product portfolio for up to $445 million.
Consisting of $210 million upfront and up to an additional $235 million and potential future sales based milestone payments.
This divestment, which is expected to close during the third quarter will meaningfully strengthen our balance sheet and most importantly has clear strategic benefits for our organization.
Strategically it will enable us to focus even more clearly on the successful launch of <unk> and again pursuing a potential regulatory path for <unk> in <unk> <unk>.
<unk> are pegged at that base for the treatment of HCV, we believe successfully developing delivering on these priorities will position our medicines to become potential treatment standards each end markets with billion dollar potential.
Overall for the second quarter I am incredibly proud of our team's performance. We continued to progress each of our strategic priorities and have made important advancements with our pipeline of innovative products. We have successfully delivered a strong first full quarter of the launch laying the groundwork for our goal of enabling <unk> to <unk>.
Ultimately become the foundational therapy in <unk>.
Let me now turn the call over to July for a clinical update July .
Thank you Eric and good afternoon, everyone.
I'd like to start by reflecting on the exciting development for <unk> in the first half of 2023 and touch upon the important updates to come later this year.
While there have been meaningful developments in nephrology over the last decade.
<unk> remains one of the greatest unmet needs and rare kidney disease.
Again patients are often uncontrolled and on average progress to kidney failure within approximately 11 years.
Therefore, <unk> was a major focus at the recent European Renal Association or <unk> Medical Congress, where the severe team showcased significant advancements in the field of rare kidney disease with nine posters and presentations.
The analysis from the UK National registry of rare renal diseases or radar demonstrated that most <unk> patients will face kidney failure within their lifetime typically occurring in Ah patients late forties.
Importantly, the radar study confirmed the relationship between reductions in pulmonary at nine months, which is aligned to our 36 week protect study interim analysis proteinuria time point and.
And subsequent preservation of kidney function.
The landmark analysis from radar showed that a 50% reduction in proteinuria at nine months reduce the rate of Egfr decline and delayed time to kidney failure or death by eight five years.
These results highlight that patients with <unk> need the early and effective treatment options capable of significant chronic reduction of proteinuria to preserve kidney function.
Currently there is only one approved non immunosuppressive therapy that has demonstrated such a rapid and sustained proteinuria reduction and early positive trends on kidney failure outcomes and that is still sorry.
At the interim analysis of the protect study, which supported <unk> accelerated approval, we observed a 50% reduction of proteinuria from baseline compared to 15% with Max May Titrated Irbesartan.
Additional data showed that greater proportions of patients on irbesartan as compared to feel sorry reached a 40% decline in egfr from baseline kidney failure or death.
Furthermore, new data from interim assessment of the protect study presented at <unk> showed that a significantly greater proportion of patients on <unk> achieved complete and partial remission of proteinuria.
Which continue to accrue over the study period, demonstrating the rapid and durable effectiveness I feel sorry.
We head into the upcoming two year top line readout from protected with confidence.
Just on the magnitude of proteinuria reduction observed with <unk> as compared to Irbesartan and encouraging encouraging trends on kidney outcomes at the interim assessment and protect we believe the trial is well powered to show a clinically meaningful and statistically significant treatment difference on egfr at two years.
This is well supported by the robust clinical literature from precedent studies, demonstrating the relationship between preliminary reduction and long term egfr benefit in <unk>.
Furthermore, as part of our NDA review, we provided the FDA with conditional power calculation based on trial level analysis, and the available interim Egfr data.
Please egfr trend analysis supported the accelerated approval I feel sorry for patients with ICANN and further support our expectation of a statistically significant to your benefit on Egfr.
We remain very pleased with the ongoing conduct of the protect study.
As Erik highlighted we're now scheduled from a top line readout in the late third quarter early fourth quarter of this year. These.
These data are expected to support the submission for traditional approval, which we anticipate should include a label expansion to reflect the broader population and long term benefits of pillsbury.
Listening to become the foundational therapy and again.
Moving to Fnf's, Jeff since we.
Ported the results from the duplex study our team has been actively engaging with rare kidney disease experts practicing nephrologist and patient advocacy organizations.
The overarching theme of these discussions is the high unmet need the.
The difficulty in studying a heterogeneous disease, such as <unk> and strong support for the scientific rationale of sparse intent and FX Jeff.
This brought encouragement combined with the positive trends seen in the ongoing analysis of the duplex data support our justification to speak a path forward with regulators.
A meeting with the FDA as scheduled and we expect to be in a position to Bryan to provide an update from the meeting in the fall.
We also are planning on presenting a more comprehensive analysis of the duplex study data at a scientific meeting later this year.
Moving beyond <unk> I'll briefly touch upon the advancement of <unk> for the treatment of classical Homo cystinuria or HBO.
In late May we provided positive topline results from cohort six of the phase <unk> <unk> study.
Pacifically treatment with <unk> resulted in a consistent benefit across the patient population with a mean reduction in total <unk> of 67, 1%.
And achieved total homocysteine levels that according to physicians could support diet liberalization.
This is very important for patients that are typically on a highly restrictive low protein diet.
There have been no significant safety concerns reported to date with <unk>.
Mild injection site related reactions were observed and manage with conservative treatment.
With this emerging clinical profile, we believe that <unk> can effectively replaced the deficient CBS enzyme activity.
Addressing the high unmet need in HBU and can ultimately become the first disease modifying therapy for patients.
Engagements with regulators are progressing well, we currently have alignment on the use of total Homo <unk> as the primary endpoint for the phase III study and the focus of our ongoing regulatory engagements is to align on finalizing details of the phase III program now that the cohort six data in hand.
We look forward to providing an update on the details of the phase III study later this fall with the expectation of initiating a pivotal study by year end.
With that I'll turn it over to Peter for the commercial update Peter.
Thank you.
Good afternoon, everyone.
Our ambition is to make sure the new treatment standard Hagen patients at risk of rapid disease progression.
And I am really pleased how we have thought in the first four five months since launch to realize this ambition.
We have made significant progress on <unk>.
Three strategic fundamentals that are outlined on the approval call in February .
Sure Jamie.
<unk> in the treatment paradigm, but educating physicians emulsions borrowers novel mode of action.
President <unk> and safety profile.
Okay, enabling broad access for eligible patients to increasing payer coverage.
Ensuring a positive initial experience, we still value for patients and the solstice.
Let me provide you with some political from our three areas of focus for successful launch.
Starting with physicians.
Since the launch our dedicated field force has been able to engage with foreign ourselves nephrologist and face to face interactions.
These engagements are having the intended impact.
Before I'll, just increasingly understanding <unk> novel mechanism of action.
Rapid and sustained.
A reduction of <unk> patients, including those risks.
<unk> progress.
We also see continuing increase in wins are still smiling.
Based on market research findings.
<unk> is already at nearly 90% of those surveys and over two thirds of the neurologists know about fuel salary without dumping.
More importantly, 50% of these Nephrologist reports U S. A substantial advance over other therapies and the intense decrease was in the first year of approval remains high at 90%.
Now with our sales force can start using branded campaign materials.
With FDA guidance Marcelo approved products, while also launching speaker programs.
To further strengthen the awareness of <unk>.
This positive momentum is also translating into behavioral changes as demonstrated by the increase in demand.
This has resulted in 417, new patients start forms in the second quarter and in the first four five months since approval. We have received a total of 563 patients start forms.
As we have highlighted principle <unk> patient start forms is the fundamental indicator for treatment demands and it is the key metrics contributing to our confidence in a successful launch.
To put it into perspective.
Q4 hundred 70 patient thoughtful and so we received our first full quarter.
In comparing us to other reason rare nephrology launches the demand fulfilled outperformed these benchmark within that same period.
Additionally, we continue to observe an increase in number of prescribers can repeat prescriptions by the same nephrologist, indicating that they are seeing the potential treatment benefit for their addressable EGEN patients and starting to change the treatment paradigm with sainsbury.
Let me now shifts to the progress we have been making on the payer access films.
We are very pleased with the engagement, we continue to have with payers and how they perceive the value that <unk> is bringing to patients.
Investments, we made early on in generating the health economic evidence and developing the pillsbury value story has been important in helping patients understand the utility of <unk> borrowings.
We ended the second quarter was 54% of U S lives covered and payer policies.
It was about 50 formulary that haynesville as far as specific policies.
And we are really pleased with the quality of these specific formularies as most of this is Brian .
Sortation requirements with a low for excess aligned with the fewest body language.
Ensuring the patient do.
Do you feel sorry quickly after receiving a patient's platform is a key priority for driving better applecare and our dedicated patient support services team.
We are pleased with the support that <unk> is providing to patients and more importantly, how these services are being appreciated by patients.
This includes personalized education systems was the Rams and reimbursement process.
Reimbursement claims is going to go lower medium. Please <unk> can provide legible patients with limited sleep products through the quick start program for up to 60 days.
Our progress on these three before mentioned fundamentals, we sold <unk> revenues of $3 $5 million in the second quarter and a total $65 million in net sales in the first four and half months since launch.
He is right in line with our expectations.
As expected revenue in the second quarter reflects the reduction in inventory from the initial stocking at the regional sand versus our specialty pharmacies, unless we accrued in the first quarter.
I am pleased with our specialty pharmacies have since placed reorders.
And looking at the overall loans through the second quarter. We are really pleased we see the strongest demand for the second quarter of months amongst reasons launches in rare nephrology and have broadened our high quality payer access.
In the second half of the year, we expect to see patient start forms globe inclusive of any seasonality in the summer months as we are.
<unk> and other reasons than 40 launches, which could result in some variability from quarter to quarter.
We also expect to see continued successful coverage decisions that will enable us to advance access to <unk> funding.
With the strong demands and broadening reimbursement, we expect meaningful revenue growth for fuels borrowings in the third and fourth quarters.
All of this is consistent with our planning and expectations that we set forth at approval.
Our progress to date has created a very strong foundation and as a result, we have great confidence that we will ultimately achieve our goal of inspiring becoming a new treatment standard for <unk> patients at risk.
And potentially reaching blockbuster status in the future.
Let me now turn the call over to Chris for the financial risks.
Risks.
Thank you Peter and good afternoon, everyone. As the team has highlighted we are very pleased with the progress that has been made over the first six months of the year and we're looking forward to a strong second half still to come.
Importantly, we are well positioned from a financial perspective to support our expected growth.
For the second quarter of 2023, net product sales were $57 million compared to $51 million from the same period in 2022.
The increase is primarily attributable to net product sales from the ongoing launch until sorry.
Our legacy products also continued to perform well in the second quarter with the bile acid portfolio contributing $27 5 million and net product sales in our <unk> products contributing $26 $1 million and net product sales. This growth was driven by organic patient demand.
During the quarter. We also recognized $2 7 million of license and collaboration revenue, which translates to $59 7 million in total revenue for the period compared to $54 2 million for the same period of 2022.
Research and development expenses for the second quarter of 2023 were $69 4 million compared to $59 7 million for the same period in 2022.
The difference is largely attributable to the continued advancement of our <unk> program, including the ongoing composed study as well as startup activities for the pivotal program and manufacturing.
On a non-GAAP adjusted basis, R&D expenses were $62 4 million for the second quarter of 2023 compared to $54 4 million for the same period in 2022.
Selling general and administrative expenses for the second quarter of 2023 were $74 million compared.
Compared to $53 million for the same period in 2022.
The difference is largely attributable to the Onboarding. The first foray field team and supporting staff as well as launch related activities, including promotional support and a Rems program. Following the approval of <unk> in the first quarter.
On a non-GAAP adjusted basis, SG&A expenses were $55 6 million for the second quarter of 2023 compared to $37 5 million for the same period in 2022.
Total other income net for the second quarter of 2023 was $2 million compared to total other income.
Other expense net of $1 $5 million in the same period in 2022. The difference is largely attributable to higher interest income earned in the period.
Net loss for the second quarter of 2023 was $85 6 million or $1 13 per basic share compared to a net loss of $67 million or $1 <unk> per basic share for the same period in 2022.
On a non-GAAP adjusted basis net loss for the second quarter of 2023 was $58 2 million or <unk> 77 per basic share compared to a net loss of $41 3 million or <unk> 65 per basic share for the same period in 2022.
As of June 32023, the company had cash cash equivalents in marketable securities of $491 3 million as.
As Eric highlighted earlier, we were pleased to recently entered into the agreement to sell our bile acid product portfolio to mirror in pharmaceuticals for up to $445 million.
This transaction is clear strategic and financial benefits for <unk>.
From a financial perspective, this transaction will bring forward several years of value from the products and meaningfully strengthen our balance sheet with an upfront payment of $210 million of close.
Tomorrow, we will have the potential to realize up to $235 million in additional value from sales based milestones as cobalt makena at all continue to be important treatment options for patients in the future.
For the second half of the year, we anticipate our operating expenses to remain at or modestly below the levels. We reported for the first half of the year with some variability quarter to quarter as we continued to advance our programs and complete the bile acid portfolio transaction, which is expected to close in the third quarter importantly, with our reported cash balance at the end of the second quarter and the expected net proceeds from the biomass.
Portfolio transaction, we expect that we can manage our balance sheet to support operations beyond 2025, and achieve the key goals from our programs with significant growth potential with that I'll now turn the call back over to Eric for his closing comments Eric.
Thank you Chris.
I'm proud of the team's accomplishments in the first half of 2023 and the significant progress we have made towards delivering innovative treatments for patients with rare disease.
We've had an outstanding start to the launch of <unk>, which is performing to our high expectations and on track to potentially reach blockbuster status at peak.
We remain encouraged by the profile of <unk> and <unk> and look forward to engaging with the FDA in the near term.
Talked about and these data from the phase one two composed study represents further evidence of its potential to become the only disease modifying treatment and a potential multibillion dollar market in the future and.
And by entering into the agreement to divest our bile acid portfolio. Our teams will be able to further concentrate their efforts on our exciting pipeline opportunities aligning with our goal of delivering significant value in the quarters and years ahead.
In the second half of the year, we look forward to providing important updates on our pipeline programs.
Milestones all the potential to make meaningful positive impact on the lives of those impacted by rare disease and therefore, we will continue to execute with urgency. Let me now turn the call over to Naomi for Q&A Naomi.
Thank you Eric we can now open the lineup for Q&A operator.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Please limit yourself to one question.
Again, Please press star one to ask a question.
Okay.
We will now take the first question from the line of <unk> Rama.
From J P Morgan and Nippon Ramen Your line is open.
Hi, Thank you for taking the question. This is actually a malcolm kunal on Toronto pump.
Just one question.
Does your market research suggest about.
Prescribing habits under the various possible scenarios of Egfr benefit. Thank you.
Welcome. Thanks for the Great question, and I will turn that one over to Peter.
Okay.
Okay.
Thanks, Eric.
I would say is the way I would.
I'd like you to think about just kind of a it's a rolling launch we started.
Promoting fuels by risky Ti materials, only consistent to the FDA guidance that our crews through accelerated approval.
Fast de 120, we have the ability to promote.
And as in every launched adoption as innovators and early adopters and this is what we planned for and our focus targeting efforts.
To your question was more data will further reinforce the sulfide profile and allows the new communication opportunities and I think this will help us to further broaden the prescriber base.
Great. Thank you.
Yeah.
Thank you Michael.
We will take our next question from the line of Tyler Van Buren from TD Cowen.
Tyler Vance Hey, guys. Your line is open.
Thank you good afternoon, thanks for taking my question.
Understand that it could take up to 20% to 60 days for patients to receive coverage.
But of the 563 cumulative patient start forms that you have received can you say approximately how many of these are Hubbard and then also potentially how many of them are on drug.
Okay. Thanks for the question Tyler and Peter why don't you take that one.
Yes, I can take that question Eric.
As you would expect in the beginning of a launch, especially this early the metrics in the fulfillment process are highly variable.
If I look at where we are I would say our metrics are right in line with benchmark in rare disease launches.
To your question on the report of seismic <unk> 63 patients start forms I can tell you that most of these patients have received so far.
And we see a positive trend of conversion to paid bonds that we believe will continue with increasing vehicles with decision to include sales volume and turbulence.
Yeah.
Okay. We'll take the next question from the line of Greg Harrison with Bank of America, Greg Harrison. Your line is now open.
Hey, good afternoon.
Congrats on all the progress and thanks for taking the question.
Yes.
In the prepared remarks, it was noted that.
We now expect the gross foreign label to be expanded along with full approval.
What do you think would change.
And the label and how.
How would that impact the <unk>.
<unk> patient population.
That could get the drug.
Great. Thanks for the question.
So what I would say is that we would expect the label to reflect the full population that we studied in our phase III protect trial.
Which did enroll patients.
One gram per day, and above which is which is far broader than what we have in our indication statement now of those patients that are at risk of rapid.
Progression typically those patients above one five gram.
And.
This was based on Fda's assessment of approval through accelerate approval. So we do believe that there will be an expansion to reflect again the broad efficacy that we have seen at least through the interim.
Our phase III program, and I'll have Peter talked about how that might impact the addressable population.
Yeah. Thanks, Doug I think Theres two elements here I think it's it.
It helps us to further broadens.
How physicians think about their addressable patient within gets one.
I also think that there will be a broadening of the prescriber base.
New data.
Provides the confidence.
Dance, particularly the baby understands right now and that's something that we are have been planning for and our targeting efforts I was calling out the four cells with metrology that we had before and ourselves and charges that we have been able to reach we are planning to expand that further to ultimately 6000, nephrologist and the broadening of the prescriber base wisdom.
<unk>.
Addressable patients I think gives me good confidence for the second policy put EMEA and ultimately.
Lastly, we have announced the data and the FTE.
So David label that we will continue to see growth fulfills barring a year ago.
Great. That's helpful. If I could sneak one more in.
How would you characterize the flow of new patients start forms throughout Q2 was it steady or.
Or maybe accelerating towards the end of the quarter.
Yeah, Great question, Peter would you like to take that.
Yes, Greg I would say it's steadily increasing.
Yes, I think I think that's right what I would reflect is that is increasing and we would expect as we've seen with other launches that there is variability.
In the first year importantly, though Greg as we talked about what we would expect in the second half of this year would be an overall growth in both patient start forms as well as revenues.
Given the strong demand that we've seen as well as the great expansion of payer access that will certainly reflect in growth in both of those in the back half of the year, but quarter to quarter or month to month, we would expect to be see some variability.
But we are certainly in a great position to achieve our ambition of making Phil sorry.
Foundational therapy, and ultimately a blockbuster medicine and Ikea.
Great. Thanks for taking the question.
Sure I will take the next question from the line of Joseph Schwartz with Leerink Partners. Joseph Schwartz. Your line is now open.
Great. Thanks, so much and congrats on the quarter.
I was wondering if you could walk us through.
Some of the.
Powering assumptions that have gone into the protect design I think I saw somewhere that protect was powered to detect a 30% difference in proteinuria. After 36 weeks and also a $2 nine mil per minute per year difference in total egfr slope.
And then I.
Thank you.
Re powered.
The study, but then a paper came out by incur at all the <unk>.
Victor that a 30% difference in proteinuria would produce a $1 67.
<unk> difference in total Egfr slope and so I'm wondering.
As far as intent actually produced.
41% relative reduction.
Which I think incur.
At all would predict to drive a $2 77 unit difference in total Egfr slope.
How to interpret.
These relationships given that.
Companies, usually power studies for smaller changes then they.
Expect to see.
And so my question I guess is.
What would you.
Given given the trial has been.
Repower, one and some of these relationships have evolved over time.
How was the trial initially powered how do you see it being powered now and we've heard.
Maybe it's just with respect to <unk> that.
Small changes to be clinically meaningful.
Good changes.
Of a smaller magnitude.
Be possible to drive a stat Sig result, and protect.
Yes, Joe. Thank you for the question I think I think July is well poised to be able to provide some clarity on that question.
Yeah. Thanks, Joe just to clarify Youre, correct, we have 90% greater than 90% power to detect a dip.
And slope of $2 nine per minute per year with 380 patients and Thats. How we originally powered the trial that was based on historical data and Youre correct, achieving at least a 30% difference in proteinuria, which we did achieve.
So we now have additional data as you pointed out the inker meta analysis for example, our interim data and we achieved a 41% relative reduction in partnering which was as you said greater than we predicted so we did conditional power calculation based on the available interim Egfr data as well as trial level analysis, which gave us a high level of <unk>.
And that will achieve a clinically meaningful and statistically significant effect at two years and this data that support our accelerated approval I did want to clarify one thing is that we didnt repower, but we did over recruit so we do continue to have a high level of confidence that we will achieve both clinically meaningful and statistically significant.
<unk> effects.
I will just also add that yes, I don't think we need to hit as high based on the additional data of.
While we originally powered on it based on the treatment effect and variability that we remain highly confident that we will hit statistical significance at two years.
Thank you very much.
Yeah.
Okay. We'll take the next question from the line of Maury Raycroft of Jefferies. Maury Raycroft. Your line is open.
Hi, Congrats on the progress and thanks for taking my question.
I was wondering what are your latest thoughts on <unk> revenue for the full year of 2023 as it relates to the consensus number for the year, which you've commented on in the past.
And also wondering separately what feedback you are getting are related to rems and our rems implement implementation and how is this impacting access or psf convergence.
Alright, thanks for the questions.
Ill start with the <unk> revenue for the full year I think we've been very pleased with what we saw in the first half and I think with the demand that we are seeing generated.
Launch to date that we fully expect to see an acceleration of revenue in the second half of this year.
With consensus I think largely in line with how other first year rail rail or renal sales have gone we think that we're in good position there. So.
So I think that we believe that we're going to see a strong second half of the year.
Including some of the potential seasonality in the summer months that we've seen with other rare renal launches to date so.
We're well positioned for a strong launch and again. This first year is really about setting the foundation for us to become a blockbuster in the foundational therapy in the treatment paradigm.
Turn it over to Pierre to give some feedback on what he's hearing in terms of Rems.
Certification and what this means for conversions.
Yes.
Happy to do so Eric and Marty Thanks for the question.
Let me start by referring to the demand that we were able to generate with so far in the first half.
Thanks for that and 63 patients start forms.
Our generators.
During the Rems program.
And what we are seeing is that when the physicians appreciate the strong efficacy and safety profile of <unk>.
In combination with urgency to treat the doctor will have that conversation with his or her patient that has a risk of rapid progression.
So I think it really comes back to focusing on the loan someone enters the articles talking about building the foundation in the first in the first year. The first six to nine months that we have outlined before so this comes back to really educate the nephrology community on <unk> safety profile in mobile monetization as well as ensuring a positive for <unk>.
And as we mentioned in this call we plan for lease and we are making solid progress from here.
Got it thanks for taking my questions.
Thanks Mark.
We will take our next question from the line of Tim Lugo with William Blair, Tim Lugo. Your line is now open.
Thanks for the question and congrats on the good quarter.
The bile acid portfolio being carved out how should we expect gross margins to trend over the next few quarters in the launch and then maybe.
Gross margins would be trending at maturity.
Chris Why don't you take that question thanks for Tim.
Yes, happy to and thanks for the question Tim in terms of specifics for gross margins it will be easier for us to be able to comment on that once we've closed the transaction and we have some of the pro forma and carve out statements.
Statements that will be available, but what I can point you to is that we do expect to see.
A reduction in expense related to the biologic portfolio that will come in both SG&A and R&D and when you think about SG&A.
Got a small sales force that is supporting coal bomb and you've got promotional efforts that go into that so that would transition and then from an R&D perspective, we do have a small phase III study that's ongoing to support keen at all as well as some bio stats and regulatory work and so we do expect that those expenses will transition as we move forward.
And we'll be able to go into a bit more detail specifics on on margins there as we go forward.
In terms of margins for the launch we've commented historically that we expect thus far to get to a stable state of mid to high teens and really there at least on a gross to net perspective.
And everything we see thus far is in line with with obtaining that.
Okay fair enough and yes, there were some comments about.
Seasonality there.
But then also some destocking in Q2, and Reorders, which I assume would impact Q3.
Can you kind of put those together it sounds like you mentioned consensus.
Assuming in line with the rare arena, along with other rare renal launches are.
Are you pretty comfortable with what Q3 consensus.
So Tim what I could characterize it in the second half of the year, we do expect to see a ramp in our revenues and I think in Q3, we do expect to see a pull through of the demand that we were able to generate in patient start forms.
In Q2.
As we have seen a meaningful improvement in payer access we think a lot of that will convert to paid scripts.
In the first part of a launch it is variable and there is still is some time, even with great access to be able to to really tightened that correlation between demand and and revenue. So we think that that's going to really start to play through in the third quarter and then really by the end of this year we should.
To start to see.
The patient start forms and revenue really tie closely together.
The other thing that I will mention is that with many of the other launches within this space in their first year of launch.
50% of the revenues are generated in the last quarter of the year.
We fully expect that that is something that we could see here.
But taking a step back I think we're very confident in.
Our ability to to meet those expectations and were off to a strong start.
We still have to continue to execute laid that foundation that Peter talked about and continue to deliver on the.
The strong demand that was generated in the first half of the year.
Understood. Thank you so much.
Thank you.
Our next question comes from the line of Mohit Bansal with Wells Fargo.
Your line is open.
Hey, this is Adam on for Mohit.
The current areas of focus to ensure the <unk> launches the success and with certain forms of sales be the better metric to watch over the next two quarters.
Yes, it's a great question Adam.
I'll take that one I would say earlier and launch patient start forms are the best.
Lead indicator it truly is reflective of the underlying demand.
By patient and by physicians and I think as we've seen.
That's a very strong focus I think as we now have.
An increase in access and what Peter laid out in the last couple of calls is it takes about three quarters to lay that foundation for a launch like this and so we're well positioned to do that once we get through that we do expect to see meaningful uplift in revenue and that really should be then the measure of success moving.
Forward, but I think as we demonstrated in Q2 patient start forms reflect a high level of demand out there. We expect that will continue through the rest of the year.
And again, we'll be positioned to have a very successful launch in the years to come.
Great. Thank you.
Thank you.
We will take our next question is from the line of <unk> <unk> with Guggenheim Securities.
Your line is now open.
Great. Thanks for taking the questions and all the color on the call.
Maybe you can provide a little more insight and just sort of exactly which patients are getting.
Prescribed so far im trying to get a sense of sort of.
Are the ones in the academic setting versus the community setting are they being prescribed after they get an STL Q2 before his jokes to also maybe just kind of outdoor payout is fitting into this is generally being given on top of any other sort of added insights on the patient profile thats being prescribed the product would be.
Thank you great.
Great. Thank you for the questions Peter why don't you take those.
Yes, thanks for that question Aneel.
So I think patient characteristic I think several items that we call on.
I think first from a payer coverage perspective, what we said from the onset of that two thirds of those patients are commercial and that is very much in line with our expectations.
It's a patient population is predominantly male that's also in line with our expectations.
I think the evidence as what we're seeing is in the mid 40 <unk>.
Particular question that you're asking like where does that fit in the treatment paradigm.
And when we start to see that physicians understand that this is truly AUM as it is replacing ace and arb.
Often these are rapidly progressing patients and often those patients right now and rasp inhibition together with <unk>. So that we are seeing is that.
For those patients that are being prescribed right now is replacing ace inhibitors or <unk> that.
<unk> implementation was SDLP too.
To your other question was with regards to our payout.
Generally in general.
Kevin laser resource, but it's still on top of Asia.
Arps for now, which goes by and Thats, how we see it being used as well.
Okay. Thank you.
Thank you.
We will take our next question from the line of Laura Chico with Wedbush Securities Go ahead. Your line is now open.
Hey, good afternoon, thanks, very much for taking the questions I just had two quick ones. So first Eric just following up on your earlier comments with respect to potential label expansion.
This might have been asked a little bit but.
Are you not seeing any patients kind of below that threshold.
The proteinuria indicated on the label or is there kind of some indication that they are waiting for label expansion to begin moving into that kind of patient populations. Just real quickly <unk> what are the range of outcomes that we should expect from the upcoming meeting with FDA. Thank you.
Greg why don't I take the first one and then.
Jeweler can take the <unk> question. So we are seeing some patients that are below one five grams of protein urea because there are other factors that physicians do determine the level of risk of progression. So we are seeing that.
But as you can imagine.
Most of the patients early in launch are the most severe that really have very few options if any.
In the treatment arm of materials. So we do expect that a label expansion will help in increasing the number of patients that would be available for us to treat but also just the level of evidence that would be within that full approval light bulb. So as Peter mentioned sort of a rolling launch with additional evidence and support moving forward. So I think.
We've been pleased with.
The clear understanding that physicians have about.
Helping treat patients with thus far that are at risk.
And Julia why don't you address the question about potential outcomes for <unk>.
Yeah. So as we said on the call we Havent meeting with the FDA that scheduled.
And with the duplex results in hand, which we have been analyzing and as I mentioned.
At least the interim data, which showed durable effects on proteinuria positive trends on Egfr positive trends on kidney outcomes and then a great safety profile, we're really seeking to understand the agency's expectations for submission and really overall willingness to accept a submission based on the totality of data and we've already released and the additional data that we have analyzed.
So we do expect to be in a position to provide an update on <unk>.
See you all later in the fall.
Thanks very much.
Thank you.
Our next question comes from the line of Alex Thomson with Stifel.
Alex Thomson your line is now open.
Great. Thanks.
For Peter could you provide any color on patients and liver monitoring the setting in which the blood test is ongoing and patients may be getting a second course of therapy. So far and then maybe for Chris can you talk about what assumptions are embedded in your runway guidance around.
Past 2025.
Alright, Peter would you like to take the first one.
Yes, Alex Thanks for your question if I understand you correctly is like what is the repeat prescriptions filled salary.
With like the monitoring.
Liver testing, but we are seeing so far the patients that have started transpiring there.
There is a high level of repeat prescription and compliance. So we don't see at this point if there is any.
<unk> complication with the monthly delivering testing.
New loans so far.
Hi compliance.
And Christopher runway.
Yes, I'm happy to take that thanks, Alex So included in the cash runway guidance are a number of things. The first is of course, the Iga nephropathy launch.
Being investment and pegged about <unk> pivotal program in that getting off the ground. Later this year also baked into that is maintenance of disciplined spend for <unk>, while we have those discussions with FDA and evaluate next steps.
We also.
Bring into that continued competitive dynamics fourth iola and potential pressure on that business and then any milestones that we would either receive an or pay as a result of the various different programs that are going forward.
And sales trajectory.
So hopefully that gives you a good sense for all of what's in there.
Great Super helpful. Thank you.
Thanks, Alex.
Our next question comes from the line of Ed Arce with H C. Wainwright Ed Arce. Your line is now open.
Great. Thanks for taking my questions and congrats on the progress in the quarter.
A couple from me really just a follow up on some prior questions first.
With regard to meeting with the FDA later this year on <unk>.
I wanted to get a little bit more granularity around some of the scenarios or perhaps proposals that you are coming to the meeting with.
In particular weather.
A new trial will include more patients who are higher power, where perhaps a longer lead in period or some other aspects.
With better correlate protein area with the long term outcome of Egfr and then secondly.
Around the label expansion.
Again.
Just wondering if you can put some type of a quantitative disc.
A description around the incremental size of patients. If you go down from the one five grams now two one gram after label expansion. Thanks, so much.
Thank you for the questions, maybe I can take a.
Establish the FDA scenarios I think fundamentally.
We're looking for FDA to align on our view that the totality of data that we've generated to date with <unk> and <unk> would be sufficient for us to submit an NDA I don't really foresee that we would undertake a large trial with at this point I think that the data that we have is sufficient.
<unk> would you like to add any other color to that.
Yes.
I would echo what Eric had to say and really this is our first meeting with them than being able to see the data. The totality of results that we've generated in a patient population that really has very little else available to them and really consistent safety profile and a consistent and durable effect on primary and positive trends on many other meaningful endpoint that's.
Really just to have our first conversation to show them the data and have a discussion about next steps.
Okay.
And Peter would you like to take the question about.
Have you expanded population.
Sorry can you repeat the question I missed that.
Yes. The question is quantifying.
How many additional patients might there be with the expanded label for <unk> at a full approval.
Yes, I think it is important to realize that even though the label.
Reads right now for patients at high risk.
Disease progression generally as opposed to newly hired one size doesn't exclude patients below one side because there may be other factors why the physician determined that a patient is on a path of rapid progression. So we see also utilization below one five.
But I think to the point that I made earlier on the call with the broadening of the label. We also will see broadening of the.
The prescriber base, because I think it will provide further confidence in profile.
And our opportunity for communication and if you had mentioned earlier initially in the launch after you are being prescribed in patients.
Have not had success has been the other treatment options and as physicians start to see what <unk> can do and use for their own patients that stimulates repeat prescription as well and that's what we start to hear and then really piece.
Yes, I think maybe the only other thing I would add is I think theres going to be two factors for us assuming that the.
Addressable population now with 30% to 50000 expands given that there are up to 150000 patients in the U S with Iga nephropathy, I think fundamentally it's going to be the addressable.
<unk> of those patients that are below one five and I think a very compelling data set that we have.
That julep shared from the radar analysis reflects that even patients that may have been considered low risk you know those patients that may have <unk> five grams.
There is a proportion of them that are that are at risk of progression. So I think theres going to be increased awareness.
Cruise at risk as well as earlier diagnosis as we have more education.
<unk> in the years to come so there's actually several different factors that are likely to expand the addressable population.
Not just in the label expansion. So we can certainly talk about that in future.
Future quarters, but we do believe that there there are several meaningful factors that should expand the population moving forward.
Great. That's helpful. Thank you Eric.
Thank you.
This concludes today's question and answer session I will now turn the call back to Naomi eichenbaum for any additional or closing remarks.
Thank you. This concludes our second quarter update we look forward to keeping you updated throughout the remainder of the year and speaking with you. All again soon have a great rest of your easing.
This concludes today's call. Thank you for your participation and you may now disconnect.
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