Q2 2023 Jazz Pharmaceuticals PLC Earnings Call
Good afternoon, and thank you for attending the jazz Pharmaceuticals second quarter 2023 financial results call My.
My name is Melissa and I will be your moderator for today's call.
All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
I would now like to pass the call over to the jazz Pharmaceuticals team.
You May proceed.
Thank you operator, and good afternoon, everyone today, Jonathan Politicals are part of the second quarter of 2023 financial result.
The slide presentation accompanying this webcast is available on the investors section of our website.
You May also refer to the press release, we issued earlier today, which is also posted to our website.
On the call today are <unk>, Chairman and Chief Executive Officer, Renee Gala Executive Vice President and Chief Financial Officer.
Dan Swisher, President and Chief operating Officer, and Rob <unk> Executive Vice President Global head of R&D.
Timothy Lynch Executive Vice President and general manager of the United States will join the team for Q&A.
On slide two I'd like to remind you that today's webcast includes forward looking statements such as those related to our future financial and operating results growth potential and anticipated development and commercialization milestones and goals, which involve risks and uncertainties that could cause actual events performance and results to differ materially from those contained in these forward looking statements.
We encourage you to review the statements contained in today's press release, and our slide deck and in our latest SEC disclosure documents, which identifies certain factors that may cause the company's actual results.
And results to differ materially from those contained in the forward looking statements made on today's webcast.
We undertake no duty or obligation to update our forward looking statements.
Turning to slide three on this webcast to discuss non-GAAP financial measures.
Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the investors section of our website.
Now I'll turn the call over to Bruce.
Thanks, Andrea good.
Good afternoon, everyone and thank you for joining us today I'll start on slide five in.
In the second quarter of 2023, we once again delivered strong commercial results advanced our efforts to unlock the tremendous potential of our pipeline and built on our record of driving operational excellence in particular, our results in the second quarter highlight the durability and growth potential of our commercial portfolio.
Capabilities and productivity of our R&D efforts and our focus on operational excellence.
We are pleased to report strong execution across our commercial portfolio with all three key growth drivers of our commercial business.
<unk> <unk>.
Achieving year over year double digit growth.
<unk> grew by 39% in the second quarter compared to the same period last year and is annualizing at well over $1 billion in revenue.
<unk> continues to be the oxidative choice.
Only approved therapy for idiopathic hypersomnia.
We expect our ox debate franchise to contribute $2 billion of the $5 billion in total revenue component of vision 2025, and are well positioned to reach this target.
As a reminder, our 2023 neuroscience revenue guidance, which we are raising at the midpoint today.
Vision 2025, both account for the availability of high sodium oxalate authorized generics for Ags and branded fixed dose high sodium ox debate.
<unk> growth remains strong and we are confident in its potential to reach blockbuster status.
Double digit net sales growth and <unk> 23, compared to the same period last year as we continued to drive prescriber growth across our global markets. Our launch in Europe is gaining momentum with additional international launches and indication expansions expected this year.
And oncology Riley has continued to grow in the U S underpinned by strong demand and our increasing emphasis on the adolescent and young adult market.
Moving to our pipeline given the level of productivity in our R&D organization I'm going to call out just a few items, Rob will cover our R&D progress in more detail later in the call are.
Our pipeline continues to advance towards meaningful catalysts with the potential for as many as four late stage data Readouts through 2020 for the first being <unk> hundred 50 late this year, followed by Suva, Kalsomine and Sandy data Mab and Gea next year and topline PFS for <unk>.
Alka in combination to centric and first line extensive stage small cell lung cancer at the end of 2024 or early 2025.
In addition to its strong commercial performance in the U S. We were extremely pleased that we recently received a positive <unk> opinion on our marketing authorization application for JCB $4 58 marketed as <unk> in the U S and expect European Commission approval later this year.
Since we added zany data mapped to our pipeline last year. It has continued to impress and were excited by its broad applicability, which we believe represents 2 billion plus and peak sales potential.
Positive pivotal data from our phase <unk> trial in biliary tract cancers or BTC were featured in an oral session. At this year's Astro conference and concurrently published in the Lancet oncology. These data were also selected for the best of Astro meeting.
Topline data readout from the ongoing phase III gastroesophageal adenocarcinoma or Gea trial is expected in 2024.
I'm also pleased to report that we recently received IND clearance for <unk> hundred 98, and engineered interferon Alpha cytokine prodrug that is activated specifically within the tumor microenvironment, where it can stimulate interferon alpha receptors on cancer fighting immune effector cells.
This milestone achieved we remain on track to initiate a phase one trial of <unk> hundred eight later this year.
On the operational side, we generated continued top and bottom line growth in the second quarter, our commercial execution, coupled with our focus on operational excellence.
Put us in a strong financial position, enabling us to execute a focused capital allocation strategy to invest in the products pipeline programs and corporate development opportunities with the highest potential to deliver sustainable growth and enhanced value.
Given our financial strength and our current stock price, we have resumed share repurchases under our existing program, which Renee will expand upon shortly.
Based on our performance in the first half of 2023 and expectations for the remainder of the year, we are raising our full year financial guidance for 2023.
And longer term, we believe we are well positioned to achieve vision 2025, Renee will provide additional commentary on our financials and guidance later in the call.
Turning to slide six we are excited about the progress we've achieved in the second quarter and believe it is substantially advanced us in all three areas of vision 2025, and we are well positioned to achieve these important milestones in our transformation to a high growth global Biopharma leader.
I'll now turn the call over to Dan to review, our commercial performance after which Rob will share an update on our R&D progress Renee will provide a financial overview and then we'll open the call to Q&A Dan.
Thanks Bruce.
I'm excited to provide an update on our commercial progress starting on slide eight with neuroscience Knox today, we remain confident in the strength and durability of our Oxidate franchises <unk> continues to be the oxidative choice and the only approved therapy for IH.
<unk> revenues.
$327 million for the second quarter of 2023, representing growth of 39% compared to the same period in 2022.
I'll note. This growth was against the backdrop of high sodium oxidate competition entering the market in January of this year.
In narcolepsy, our focus remains on educating patients and prescribers on the benefits of reducing sodium intake.
Message continues to resonate in addition, the health benefits of lower sodium.
And our discussions with health care professionals and experienced oxidate patient dosing flexibility is a valued attribute in sideways.
In the second quarter, approximately 9300 narcolepsy patients were taking sideways and <unk> continues to be the oxidative choice in the marketplace.
NIH, we see continued growth in new prescribers with approximately 2200 active patients taking evaluated for treatment of IH exiting the second quarter IHS. The 24 hour sleep disorder, despite sleeping a normal or a longer than normal amount of time each night.
With IH may still experience debilitating symptoms during the day.
<unk> is the first and only treatment approved by FDA to treat the full conditions by H well.
We are focused on educating prescribers on the importance of proper diagnosis and identifying appropriate patients who can benefit from <unk> therapy.
In a survey of sleep specialists indicated that 70% anticipated increase in their prescribing in the next six months.
With regard to the average number of patients on <unk> exiting the quarter. There was an operational change in our specialty pharmacy, which caused delays in getting refills on time for some <unk> patients. This.
This is being addressed and importantly, overall second quarter XI with HCP and patient demand were in line with our expectations in prior quarters.
As Rene will review in more detail, we have raised our neuroscience revenue guidance at the midpoint, reflecting our continued confidence in the growth opportunity for XI ways and the durability of observation.
Total revenues for the combined business, including royalties from a high sodium Ostomate AG.
<unk>, 2% to $492 million in the second quarter compared to the same periods in 2022.
There were approximately 16200 total average active jazz ox stage patients.
In the second quarter, a decrease compared to the end of the first quarter, primarily reflecting the expected impact of Xyrem as a result of the availability of our high sodium Oxidate AG. Our focus is on continuing to grow low study and evaluate cross both narcolepsy NIH and we are pleased with <unk> growth across both.
Indications.
Even as additional high sodium oxidate competition make available for patients with narcolepsy.
Continued growth of <unk> is one of the factors that contributed to our increased 2023 neuroscience revenue guidance and as Bruce mentioned, we are well positioned to achieve our vision 2025 targeting $2 billion in revenue.
Our <unk> franchise.
Slide nine highlights the compelling low set in health benefits, we are sharing with health care professionals and patients as narcolepsy is a debilitating chronic condition. We are focused on educational efforts around the lifelong burden of high setting that take for narcolepsy patients who live with two to three times higher risk and the general popular.
<unk> of cardiovascular Comorbidities.
Stroke and heart failure.
<unk> the only approved low said remarks today and the only auction date without a label warning about high studying intake as 92% less study and then high sodium oxidate.
The American Heart Association recommends a maximum of 500 milligrams of sodium per day.
Well, hi, <unk> and branded updates at 1100 to 1640 milligrams of sodium.
The Iowa has only 100 to 140 milligrams a reduction of 1000 to 500 milligrams of sodium per day.
Put this in perspective, it would take 12 years of treatment with <unk> to equal the setting them take of one year of high sodium oxidate treatment.
This has significant potential health benefits, including lower blood pressure and improve cardiovascular health.
To add to the literature on setting the impact we presented data at this year's American Academy of Neurology meeting and showed narcolepsy patients treated with <unk>. They had a higher risk of new onset hypertension diagnosis are antihypertensive medication initiation within 180 days is starting.
Therapy, when compared to the matched control group of narcolepsy patients not being treated with <unk> and.
In fact, the risk of those taking high <unk> state was approximately twice that of the control group. We believe these data highlight that sodium intake is a health concern for all narcolepsy patients and one that can have near term consequences.
FDA has recognized that the difference in studying content between <unk> and high sodium oxidase, including Xyrem Xyrem and loom right.
Is likely to be clinically meaningful in all patients with narcolepsy and <unk>, the safer and all such patients.
Memorizes, the recently launched branded fixed dose high study amongst today.
Has the same sodium content xyrem.
We believe that the majority of patients and healthcare providers will continue to prioritize long term health when evaluating octavate therapy.
With respect to competition from high sodium oxidate authorized generics for <unk> and <unk> announced the launch of their AG in early July .
Two additional companies looping in par also have rights to launch an AG product at this time par and loop and have elected not to launch.
These three AG suppliers are each restricted to a low single digit percentage of Xyrem sales volume as a reminder, earlier this year.
<unk> launched a volume unlimited AG jazz received meaningful royalties on all <unk> Oxidate AG.
Moving to slide 10, we remain confident in the blockbuster potential of the dialogues with yet another quarter of double digit year over year revenue growth net product sales increased 15% to $202 million in the second quarter compared to the same period in 2022.
Driven by underlying demand.
We have seen increased penetration in the long term care setting driven by additional in person engagement with physicians and we have additional opportunities for growth.
Turning to slide 11, we are focused on multiple opportunities to drive up the direct to blockbuster status. We continue to see a positive impacts from our educational efforts focused on optimal dosing and caregiver reported outcomes beyond seizure control from the becomes survey.
Which further differentiates <unk> from other anti seizure medicines.
In particular, our reports from the field indicate that to become data has been very impactful with both hcp's and caregivers.
The compelling clinical data regarding the use of <unk> in combination with club with them versus using the agents individually continues to resonate our commercial team also has an enhanced focus on further penetration into the adult setting.
We're also pleased our commercialization efforts outside the U S continue to gain momentum.
Mid 12 illustrates our progress in expanding that the dialogues outside of the U S. <unk> is now launched and reimbursed in 23 countries around the world, including all five key European markets. While it's early we are very encouraged by initial uptake in these markets with favorable pricing and access.
Paid additional reimbursement decisions and submissions through this year and next.
Moving to our oncology franchise, beginning on slide 13, net product sales for <unk> were $102 million for the second quarter, a 39% increase year over year and our fourth consecutive quarter of growth. We continue to see strong demand for <unk>, reflecting the significant unmet patient need for a high quality.
Reliable supply of our linear asparaginase for patients with acute lymphoblastic leukemia based.
Based on the availability of Riley healthcare professionals have indicated they are.
Returning to the best clinical practice and switching therapy at the first signs of hypersensitivity.
We continue to receive positive feedback from health care providers about the adoption of the Monday Wednesday, Friday dosing regimen, which allows a dosing schedule that is more in line with preferred clinical practice.
<unk> been almost universally adopted in pediatric oncology protocols and we are encouraged to see that there is increasing use of <unk> in the treatment of adolescents and young adults or DIY market, which is an area of increased emphasis for us in 2023.
Outside of the U S. We recently received a positive <unk> opinion with the positive opinion granted we anticipate EC approval of our MAA submission later this year.
Regarding the market opportunity I will note that there is competition in many European markets Jazz has consistently delivered a reliable high quality supply of this important therapy in the U S.
We are excited for patients and healthcare providers in Europe to have the opportunity to complete their full course of <unk> therapy.
Turning to slide 14, we rapidly established <unk> as a treatment of choice in second line small cell lung cancer.
Net product sales increased 3% to $70 million.
In the second quarter compared to the same period in 2022.
We have achieved significant penetration in the second line setting.
Significant unmet need for patients diagnosed with small cell lung cancer with five year overall survival rates of less than 10% and median overall survival of 6% to 24 months, depending on the stage of diagnosis.
Given this prognosis there is a further opportunity to both improve patient lives and drive growth through our pivotal phase III trial in first line small cell lung cancer in combination with centric.
We expect top line PFS data readout at the end of 2024 or early 2025.
In the U S. There are approximately 27001st line small cell lung cancer patients treated annually depths OCA has the potential to increase the duration of response with these earlier stage patients.
With that I'll turn it over to Rob for an update on our pipeline and upcoming milestones Rob.
Thanks, Dan.
Starting on slide 16.
We provided an overview of the key clinical programs and our diversified pipeline.
We are excited about the advances we've made so far this year with the potential for as many as four late stage data Readouts from 2023, and 2024, which include GBP one side, though in PTSD.
<unk> in essential tremor Samad.
Diamond data Mab, Gea and <unk> in combination with centric firm.
First line small cell lung cancer.
I'll discuss a few of our programs in more detail shortly but.
They wanted to broadly highlight our progress across the pipeline before moving to <unk>.
Starting with neuroscience.
We expect topline data from our phase II trial of GBP, one five in PTSD by the end of the year.
JCB score for one our Orexin two receptor agonist that has the potential to treat narcolepsy.
And other sleep disorders, we anticipate initial proof of concept and healthy volunteers later this year.
In addition, we.
Ongoing trials receive accounts an item both essential tremor.
In Parkinson's disease tremor, the topline data from the <unk> trial expected in the first half of 2024.
Moving to oncology.
And the data that is a priority program for us.
We aim to advance that data map to the market as rapidly as possible. The second line BTC, representing our first potential commercial indication.
We are planning for a potential accelerated approval examine data in second line BTC.
Have alignment with the FDA on a confirmatory trial in first line metastatic DTC.
It remains unmet patient needs.
We are also evaluating any GE.
Breast cancer and other her two positive solid tumors.
Whereas at <unk>, we expect top line data.
Data readout at the end of 2020 for early 2025.
Small cell lung cancer patients.
Particularly poor outcomes with a five year overall survival rate of less than 10%.
Currently <unk> is indicated to treat patients in the second line setting.
See a clear mechanistic rationale or is it so it gets it potentially benefit more patients.
Increase the duration of response and the first line setting as maintenance therapy.
Combination with the standard of care.
Beyond small cell lung cancer, we have elected to close our phase II basket trial based on limited responses in three solid tumor cohorts. We're analyzing the findings from that trial and continue to explore additional tumor types that may benefit from treatment with <unk>.
As Dan Bruce mentioned earlier, we are very pleased to have received a positive <unk> opinion on JCB for five days.
Which is marketed as <unk> in the U S.
With Monday, Wednesday, Friday, and every 48 hour dosing regimens as well as IV administration.
Administration.
We anticipate EC approval later this year.
Moving to slide 17.
And on my earlier comments regarding data.
And the data Mab is a novel bi specific antibody that can simultaneously buying two non overlapping epitopes of her two noticed by parents apples behind.
This unique design results in multiple mechanisms of action, including dual her to signal blockade.
Receptor clustering on the cell surface, leading internalization.
Parrot topics.
And potent immune effector functions, including antibody dependent cellular cytotoxicity.
Antibody dependent cellular phagocytosis and complement dependent cytotoxicity.
Leading to encouraging anti tumor activity in patients.
Now the data Matt has shown compelling activity across a broad range of her two positive tumors.
And we presented promising efficacy early survival data, both <unk> and <unk> this year.
Additional data presentations are planned for later this year, including quality of life outcomes from the Horizon BTC one pivotal study at the European Society of medical Oncology annual Congress.
This slide speaks our development strategy present.
Which is focused on four key areas first.
Areas no approved her two agents such as the significant unmet need in second line her two positive DTC as well as other solid tumors.
That can maximize the opportunity and gea and other her two positive tumors, where we believe samad data map has the potential to be the her two targeted treatment of choice some cleansing Turkey.
<unk> targeted agents.
Compelling data demonstrated samad data map has the potential to be a foundational treatment for <unk>.
With her two positive gea.
Third we see substantial opportunity in settings, where standard data and that could be used in combination with standard of care for other novel therapies, particularly in breast cancer and in earlier lines of treatment.
Fourth we plan to build upon the compelling activity, we've seen across a broad range of her two positive tumors.
To address the patient needs in additional tumor types.
We believe this approach will allow us to deliver an important new therapeutic option to patients and maximize the value of their data.
Yeah.
On slide 18, I wanted to provide more insight into our excitement about the long term potential data Matt.
Which we believe could go beyond addressing significant unmet needs in BTC and gea.
Breast cancer as well as multiple additional cancers over express or two.
With the potential to transform the current standard of care in multiple her two positive cancers.
We are committed to rapidly advancing and expanding our development program.
We believe the diamond data map has the opportunity to be differentiated by specific treatment of choice for her two positive cancers.
We expect to enter the market first and second line BTC, where physicians will gain important experience was that of a data map.
The approach is supported by recent compelling data presented at <unk>.
And previously treated her two positive BTC.
We are pleased to share that we are planning for a potential accelerated approvals diamond data Mab and.
In second line BTC based on the Horizon and PTC are one data.
And are working to rapidly bring this therapy to patients in critical need.
We shared the impressive second line data with the FDA.
And have alignment kind of confirmatory trial in first line metastatic BCC.
Or is it remains an important unmet patient need.
We are continuing to work with FCA regarding timelines.
And as our conversations progress, we will expect to be able to provide further updates.
Following market entry in BTC.
To have a path to approval in first line gea.
Supplemental BLA submission.
Which provides a more streamlined approval process compared to the full BLA.
With the treatment landscape evolving recent data readouts.
We continue to strongly believe that substantial opportunity remains.
To address the unmet patient need to first wondering gea.
Including the her two positive.
<unk> negative patient population.
Where the standard of care remains Trastuzumab plus chemotherapy.
For patients who are PD lone positive.
We continue to believe that then a data map has the potential.
To be the her two targeted treatment of choice, but also combining with <unk> <unk> and.
Order to treat those who are eligible to receive anti PD one therapy.
Further it remains an opportunity to move into earlier stages of Gea, where we see the potential to help those patients.
Higher to the metastatic setting in.
In the neo adjuvant and adjuvant settings.
Gea represents a significantly larger patient opportunity.
<unk> to PTC.
In a prior approval in BTC may also accelerated adoption into treatment guidelines and protocols.
We look forward to additional data from the ongoing pivotal phase III <unk> trial.
Ryzen <unk> alone.
Expected to read out in 2024.
May support U S and global regulatory submissions breast.
Breast cancer also represents a considerable opportunity.
Supported by promising early data as monotherapy and multiple combinations across lines of therapy.
Based on the efficacy and safety seen studies to date.
We believe that a data maps well suited for early stage disease, including potential use of <unk>.
<unk> therapy.
Further we believe there is potential to help patients.
Obviously treated with Trastuzumab <unk> or <unk>.
For those patients are eligible to receive treatment with TD XD.
<unk> has also shown promise in her two positive and hormone receptor positive breast cancer as part of a novel combination supporting this.
Ongoing trials, and new adjuvant breast cancer and the opportunity to expand.
So both combination regimens and later lines of therapy in her two positive and hurts your HR positive breast cancer.
We are also evaluating diamond data, Matt through multiple earlier stage trials in other tumor types, where few hershey targeted treatment options that are available.
Non of data, Matt has shown clinical activity across a diverse set her two positive indications such as colorectal cancer.
Non small cell lung cancer and multiple other cancers, where there remain a few targeted treatment options available to patients.
Turning to slide 19, I would like to highlight GBP one five.
Our novel highly selective fatty acid amide hydrolase or four inhibitor.
It is currently in clinical development.
The potential treatment of PTSD.
The phase III top line data expected later this year.
PTSD as a psychiatric disorder that affects millions of people and patients frequently have uncontrolled symptoms.
It impacts their ability to perform activities of daily living and function socially.
Currently two anti depressants have received approval from FDA.
Treatment of PTSD symptoms in the past 20 years.
Current first line pharmacological treatment for PTSD.
Just selective serotonin re uptake inhibitor mitigate some symptoms of PTSD.
They're not designed to address the core underlying crump.
Fear extinction learning and its consolidation.
Response rates existing pharmacological treatments rarely see 60% and even fewer patients achieved clinical remission.
We have been granted FDA fast track designation for <unk>.
Underscoring the significant unmet needs of PTSD patients.
<unk> is a once daily oral medication.
Has the potential to impact the pathophysiology and symptoms of PTSD Dave.
Data to date.
<unk> benefits with fear extinction.
Jeff's response in healthy volunteers.
Slide 20 shows the PTSD pathophysiology and <unk> hundred 50, <unk> mechanism of action and treatment rationale.
PTSD can result from direct or indirect exposure to traumatic experiences and events.
Individuals with PTSD have intense and disturbing thoughts and feelings related to their experience that persist long after they're traumatic event.
They may relive the event through flashbacks nightmares and feel sadness fear anger and catastrophe from other people.
In PTSD.
Their extinction deficits contribute to the persistence of traumatic memories.
Intervention to promote fear extinction learning.
Foundation of PTSD treatment.
Preclinical and clinical data indicate that exposure to stress and anxiety.
Associated with activation of.
Fatty acid.
Or <unk>.
Inhibition of <unk>.
<unk> has the potential to directly target pathophysiological processes with PTSD.
The enzyme responsible for the degradation of the NAND demand.
<unk> reduced in PTSD and failure of anandamide to return to normal levels can result in a number of behavioral conditions underlying PTSD.
Including increased anxiety and impaired extinction processing of emotional memory.
Inhibition of <unk> results in an increase in the NAND demand.
This has been shown to reduce anxiety.
Crude CRE distinction in recall and improve sleep architecture, and self reported sleep quality.
GBP, one five hours a potent highly selective.
Irreversible inhibitor.
Designed to address the underlying cause of PTSD.
Moving to slide 21, we have outlined the design of the phase II PTSD trial.
The primary endpoint of the trial is change in total symptom severity score using the clinician administered PTSD scale for <unk> five.
From baseline to the end of treatment.
<unk> five is structured 30 item clinical interview.
It is a validated instrument considered the standard for diagnosing.
Assessing patients with PTSD and.
And as an endpoint that has been determined to be appropriate for regulatory purposes.
Beyond PTSD diagnosis.
It also allows physicians to evaluate the severity of symptoms and <unk>.
Impact on social and occupational functioning.
The trial in a several secondary endpoints, including changes in scores on.
Clinical global impression of severity.
And the patient global impression.
Verity scales.
From baseline to the end of the treatment.
The ongoing trials enrolling approximately 270 patients and assessing two doses of <unk>, one five hour compared to placebo.
Which we believe adequately powers to trial.
So by the GBP one five out.
Clinically meaningful in this patient population, we expect top line data by the end of this year. We are excited about the potential of GBP, one five hour and look forward to updating you on our progress.
Turning to slide 22, we have.
Pleased to recently received IND clearance for GBP, eight eight and expect to initiate a phase one trial later this year.
J P. P 898 is an engineered interferon alpha cytokine prodrug.
Activated specifically within the tumor microenvironment.
Can stimulate interferon alpha receptors and cancer fighting immune effector cells.
I guess interferon Alpha therapy is approved in multiple tumor types, but is used sparingly based on its toxicity profile.
Delivery of cytokines can cause serious toxicities in peripheral tissues. This leads to poor clinical outcomes, given ineffective anti tumor immune activation and unmanageable toxicity in patients.
<unk> has conditionally activated interferon alpha.
Which is selectively activated.
Tumor microenvironment.
Through this approach.
<unk> relevant exposures, coupled with optimal cytokine potency limiting toxicity in other tissues.
We're excited to bring this novel molecule into the clinic later this year.
Overall, our R&D team continues to advance multiple programs from our neuroscience and oncology pipelines.
And we're looking forward to multiple near term data readouts.
Now I'll turn it over the call to Rene for a financial update Rene.
Thanks, Rob I'll start with our top and bottom line results on slide 24.
As a reminder, our full financial results are available in our press release and 10-Q.
In the second quarter of 2023, we achieved $957 million in total revenues. This was driven by growth of our key products in both neuroscience and oncology, including another quarter of double digit growth at <unk> at the dialects and relays compared to <unk> 22.
We're particularly pleased with the continued trajectory of <unk>.
Even with competition since the beginning of the year couple.
Coupled with the continued at the dialects momentum and strong growth for relief. We saw total revenue increased 3% compared to <unk> 22.
Our disciplined capital allocation and focus on operational excellence drove adjusted net income of $325 million growth of 6% compared to the same quarter in 2022.
We continue to generate significant cash from our business recording approximately $617 million of cash from operations in the first half of 2023, an increase of more than $100 million compared to the same period in 2022.
Our strong overall financial position means we have significant flexibility to invest in priority commercial and R&D programs as well as corporate development opportunities.
Development is a core component of vision 2025, and we remain active in exploring opportunities to expand our commercial portfolio and pipeline.
Turning to slide 25, we are.
Updating our total 2023 revenue guidance to a range of $3 75 to $3 875 billion <unk>.
Reflecting a $25 million increase at the midpoint.
This update is underpinned by an increase of $20 million at the midpoint of our neuroscience revenue guidance.
Our increased 2023 neuroscience revenue guidance incorporates our continued confidence in the durability of our Oxidate franchise in part based on their performance and growth of <unk> during the first half of the year.
Time period in which we saw the introduction of high sodium oxidate competition.
With regard to high sodium authorized generics, we expect our royalties from Hikma, which is the only volume unlimited authorized generic to be significantly higher in the second half of 2023 relative to the first half.
During the second half of 2023, the royalty rate from Hikma to jazz becomes fixed at a rate, where we and hikma both have substantial economics.
We also receive royalties on other high sodium oxidate Ags all of which are restricted to a low single digit percentage of Xyrem sales volume as.
As Dan noted earlier currently only one additional AG has been launched.
Our 2023 oncology guidance remains unchanged and reflects expectations of continued double digit growth for this franchise led by <unk> with a revenue range of $915 million to $1 5 billion and a midpoint of a $1 billion.
Continuing to slide 26, our capital allocation strategy includes investment in commercial brands to drive top line growth in our pipeline to drive long term growth and in corporate development, where we remain actively engaged in assessing opportunities and which remains an important pillar of our growth.
Strategy.
We are maintaining our prior non-GAAP SG&A and R&D guidance for 2023.
Consistent with our capital allocation strategy, our enhanced investment in R&D is a direct result of our success in diversifying and advancing our pipeline as well as prioritizing those programs that we believe will have the biggest impact for patients, while delivering value and contributing to our.
Our growth.
We believe there is tremendous unrecognized value potential in our stock and therefore supported by our strong cash flows and aligned to our strategic and disciplined approach to capital allocation, we have resumed share repurchases under our existing repurchase program.
In the second quarter, we completed approximately $100 million of share repurchases.
As of the end of the second quarter approximately $336 million remained available for share repurchases under our current plan.
Importantly, given our strong overall financial position, we are able to repurchase shares without compromising our ability to execute business development opportunities and invest in our innovative R&D programs.
On the bottom line, we expect to continue to deliver strong adjusted net income or ASI and have increased our non-GAAP <unk> guidance to $1 two nine to 134 billion.
Which implies a 41% year over year <unk> growth at the midpoint.
I would also like to highlight we raised our non-GAAP adjusted EPS guidance to a range of 18 15 to $19 an increase of $1 20 at the midpoint, primarily driven by our increased revenue and Eni outlook as well as reductions in our fully.
Diluted shares outstanding.
The decrease to our weighted average ordinary share guidance relates to both our share repurchase and to our recent irrevocable elections to settle in cash the principal of our $575 million exchangeable senior notes due in 2024, thereby limiting.
Dilution from these instruments.
With our strategic investments expanding product portfolio R&D progress and focus on operational excellence. We believe we are well positioned to achieve vision 2025, and deliver further diversification sustainable growth and enhanced value to patients and shareholders.
Yes.
I'd now like to turn the call back to Bruce.
Thanks, Renee I'll conclude our prepared remarks on slide 28.
The first half of 2023 has been driven by focused execution and strong commercial results evidenced by the durability of our <unk> franchise continued growth of epic dialects and strengthen Riley sales.
We continue to advance our pipeline and invest in long term growth and we have as many as four late stage data readouts through 2024 that have the potential to further diversify and transform our business. Our latest pipeline additions any data map is approaching several near term clinical and regulatory milestones given its applicability.
<unk> across multiple tumor types and lines of therapy. We believe has any data map has $2 billion plus in peak sales potential.
We also remain focused on strategic capital allocation.
With our strong cash flow balance sheet and margins, we have the financial flexibility to make significant investments across commercial pipeline and corporate development to drive sustainable growth and enhanced value.
That concludes our prepared remarks, I'd now like to turn the call over to the operator to open the line for Q&A.
We will now begin the Q&A session.
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We will pause here briefly ask questions Register.
The first question comes from the line of Jason <unk> with Bank of America. Your line is now open.
Hey, guys. Thanks for taking my questions.
Mine is on the phase III, Danny Gea study, that's going to read out first half next year can you help frame what sort of data. We can expect on the primary efficacy measures the PFS and OS.
Is this a first interim I'm just wondering if.
CFS and OS.
We'll be mature or focus really is on or off.
<unk>.
In this data cut.
Yes, Thanks, Jason Rob maybe I'll throw that one to you.
So just to clarify what we said previously was in 2024, we didn't specify exactly when.
That.
We are referring to.
PFS is the initial readout.
Okay clarify your question.
Yes.
The next question.
<unk> comes from the line of Joseph Thorn with TD Cowen. Your line is now open.
Hi, there good afternoon, and thank you for taking my question, maybe one on the upcoming PTSD readout.
Maybe worth a critical Gregory meaningful benefit on that cap scale and when you talk about the type of patient enrolled.
On concomitant, an SSRI or SNRI treatment failures can you just.
Regarding the contract is a little different that would be great. Thank you.
Yes go ahead Rob.
Sure. So we haven't said specifically.
What treatment effect that we've powered tube that you could draw some of your own and Francis by looking at the sample size et cetera.
Listed on <unk> Dot Gov.
And you'll note that it's a placebo controlled trial.
With two dose levels.
The total sample size.
Okay.
<unk> aren't allowed other concomitant medications.
Thank you.
Next question comes from the line of Marc Goodman with Leerink Partners. Your line is now open.
Yes, Hi could you please give us a little more color on the comment that you made regarding the operational issues with the specialty pharmacy.
And the <unk> franchise, and just give us a sense of how much you think it may have impacted.
Patients in the quarter or whatever you think it may have impacted or is it impacting anything about third quarter. Thank you.
Yes.
Yes. Thanks for the question Mark Kim you want to take that.
Yeah.
Sure I'd be happy to so let me start out by saying that we continue to be very confident in the strength and durability of our activate franchise as low sodium xyrem continues to be the activate a choice and the only approved therapy for IH. The decrease in total average asking jazz off.
<unk> patients this quarter, primarily reflects the expected impact of Xyrem as a result of.
Huawei of adoption and the availability of AG Xyrem in terms of XI weighed on the average number of patients on <unk> exiting the quarter. There was a what I would call an operational change at our specialty pharmacy, which unfortunately caused delays in some <unk> patients getting their refill.
Bills on time.
This has been addressed and importantly, I think to understand is that the overall <unk> XI ways HCP and patient demand. The overall market demand for <unk> was in line with our expectations along with what we saw in prior quarters. So this really was an issue of the pharmacy.
That affected.
Some patients getting refills, not but the overall demand for highway.
The benefits of reducing sodium intake in the market continue to resonate with our customers and we're very confident in the growth opportunity for <unk> and the durability of the franchise and while we expect Xyrem. They continued to decline in line with the valuation agent adoption.
Heard we've raised our full year two.
2023 financial guidance.
<unk> increased our neuroscience revenue guidance at the midpoint so.
Our increased neuroscience revenue guidance accounts for the performance and growth in <unk> during the first half of the year.
Time period in which we saw the introduction of high sodium oxidate competition. So our focus remains on continuing to grow the low sodium <unk>, which is already annualizing at well over $1 billion and remain very confident in the durability of the business.
Thank you.
The next question comes from the line of cash to Laurie with Jefferies. Your line is now open.
Hey, Thanks, so much. So can you walk me through your confidence on the $2 billion of remarks to date number for your long term guidance, let's say you continue to add about 250 patients a quarter until 'twenty five that kind of the IH will contribute about $600 million in sales by 2025 that means that your narcolepsy franchise, which is about $1 7 billion today only.
Declines to about one floor for you to hit that 2 billion watermark, how do you achieve that with generic <unk> launching like what are we missing here also I think you've previously mentioned the majority of the erosion impact for the 30 microwave franchise will occur in 2023 is that still the case today given your revised guidance. Thanks, so much.
Yes, <unk> thanks for the question.
Outlined our confidence that oxalate.
Business at jazz would contribute about $2 billion towards vision 2025 at the beginning of last year at the beginning of 2022, obviously, we reiterated that coming into 'twenty three and we've now actually increased our short term guidance in 'twenty three as a reminder, what we meant by that $2 billion was the.
Revenues from sideways.
In narcolepsy and in idiopathic hypersomnia.
Continued brand Xyrem sales and our royalties on any ags that come to market through our system.
And we continue to feel confident in that.
You didn't specifically mention the royalties in your analysis I'll remind you that the contribution from those royalties are expected to be significantly higher in the second half of 2023 relative to the first half and the royalty structure.
Disclosed from the Hikma a relationship will actually reset up again in 2024. So it's the combination of all those things.
Get us to the durability, our big focus as Kim explained is on growing sideways. This is the longer healthier choice for patients.
Given the benefits of low sodium in this chronic treatment.
And we'd like to see more and more patients get the benefit of <unk> moving forward.
Thank you.
The next question comes from the line of David <unk> with Piper Sandler.
Your line is now open.
Hey, Thanks, So I wanted to come back to the vision 2025.
Targets, particularly with $5 billion top line it seems like the street and the broader Investor community is not quite there regarding the $5 billion target. So.
Just can you can you articulate what you think.
We're all missing is it something surrounding.
At the dialogues is it.
<unk>.
Is it.
Zander data Mab for instance is gea nobiliary tract cancer or both.
In that 2025 number just help us understand why there seems to be daylight.
Between.
That target and.
What.
Folks are modeling for 2012.
Yes, well, let's review, where we are towards vision 2025, again, we rolled this out at the beginning of 2022 or six quarters in to a four year period, we're feeling very good about the performance of our business overall.
Relative to our guidance for 2023, which has now been raised on both the top and the bottom line.
And our vision 2025, I, just spoke about oxalate and the durability of that franchise and the positive progress we're seeing with <unk>.
But let me remind you that half of our business today is already coming from <unk> and oncology.
Seeing double digit growth in our three lead assets sideways at the dialects and reilly's, which together accounting for about 66% of our revenues and when you look at the oxalate piece Xyrem is now less than half of that piece of our business. So we've got growth coming in all of our.
Key franchises.
Which we estimated would contribute in 2025, approximately $4 5 billion in aggregate.
We left a placeholder in vision 2025 intentionally.
For our ongoing corporate development activities and said that products that were not part of our portfolio. When we started vision 2025 could contribute that last half a billion dollars is there any data map they will contribute to that we're not saying, it's going to contribute all of the $500 million to be clear.
But that was something added to the portfolio. After we began this process and we remain very interested in continuing.
To access new commercial products and pipeline products through our corporate development efforts moving forward our financial position is strong if you look at our cash and investments of about $1 4 billion. If you look at our cash flow in the first half of the year approaching $620 million or Leverages down. So we feel like we're well.
Physicians.
To continue to bring in new assets as we have over the company's history. If you go back any two to three year.
Period in our history, you'll generally see us do a significant transaction.
And we thought it was unfair to assume that we would suddenly stop doing transactions, particularly given our successful launches of a number of products in a row here and our strong financial position.
Thank you.
The next question comes from the line of Amit <unk> with Needham. Your line is now open.
Hi, good evening, Thanks for taking my question perhaps.
Perhaps continuing on Duane the placeholder for copper.
A couple of development.
Can you talk about your level of confidence in being able to hit the majority of that 500 million.
Two.
Some sort of business development.
And.
Where are you.
I thought that currency in terms of.
Alternative option in terms of use of capital would.
Would you consider.
Buying back more shares.
So do not be in a position to execute on such a deal. Thank.
Thank you.
Yes, Thanks, Tommy Rene can you jump in on this one.
Sure I'm happy to so.
We've talked quite a bit about our.
Strategic and disciplined approach to capital allocation and our priorities first and foremost is investing in growth.
So we're investing behind our commercial launches and growth programs, we're investing behind the pipeline.
And we expect to continue to invest in corporate development as Bruce mentioned previously it has been an important pillar of growth for us and we expect that to continue to be the case. In addition, we also look at opportunities in terms of managing the balance sheet strategically Bruce also mentioned.
De Levered pretty quickly so we're in a great position today to be opportunistic and in terms of additional investments for the balance sheet and we did take the opportunity just given what we view as immense.
Tapped value right now within the stock we did take the opportunity to recommence share repurchases in the second quarter and we we think that was the right thing to do.
In terms of future repurchases will continue to to look carefully at the opportunity set in front of US prioritizing growth and then specific to the $500 million placeholder as you've heard on the call today were really excited about the opportunity for us any data Nab, we think thats going to be.
An important program and eventually product for us and for patients. We don't expect that to cover a large majority of the $500 million, but it's certainly we certainly expect that to contribute and then beyond that we are quite active from a corporate development perspective, as you've heard me say.
<unk>, we're not going to overpay just to be able to meet this growth objective. We also don't think that will need to we do think there are opportunities out there both within neuroscience and oncology, but also within the rare and orphan segment more broadly as you know.
Vast majority of our commercial products currently do fall within that category and we think there are applicable learnings in terms of.
Working directly with with patient groups and serving the needs of patients our underlying infrastructure.
Those learnings can be shared both from our existing experience to other rare and orphan conditions. So today, we feel quite confident in our ability to transact, we're well capitalized to be able to do so as Bruce mentioned previously and we think we've established a great.
Track record as a partner of choice to be able to do so as well.
Thank you our.
Our next question comes from the line of Gregory <unk> with RBC capital markets. Your line is now open.
Great Good afternoon, Bruce and team.
Congrats on the quarter and thanks for taking my question.
Bruce maybe just a little bit on epic dialects, and just with respect to Dan's comments on the drivers are for potential continued growth. Just curious if you can comment a bit on any particular areas or drivers that kind of outsized and help to propel the growth that youre expecting.
Certainly last quarter first quarter, a little seasonality in and seeing the momentum that Youre speaking about now I'm just curious how you see that playing out in the near term. Thank you very much.
Yes, Greg Thanks for the question, Dan do you want to take out the dialects.
Thanks Bruce.
Without that Alex.
It was another quarter of double digit growth with 15%, Greg So really pleased to see that.
Continued initiatives that we outlined on the call.
We continue to face to face interactions are very important in the treatment centers get into more offices more prescribers.
We've been enhancing our focus on the adult setting.
In particular in the U S. We've got after long term care settings, and seen increasing penetration there.
We've also been educated in Hcp's.
That's the benefit of epidemics beyond seizure control and that was.
Highlighted in that become data.
Which was presented at the end of last year.
Talks about.
And behavioral benefits.
And we look forward to continuing to lean into that area, both with caregivers surveys and even <unk>.
Traditional studies and so we've got a real commitment to.
Continuing to generate data, but within the indications and kind of outside of those indications.
Outside of the U S. The launches continue to go well, we're at 23 countries globally.
We've had six positive pricing and reimbursement decisions to date in the U S. Sorry outside the U S and importantly, we've got a phase III study in <unk>.
What we think could be a very significant market for us without the dialects in Japan.
So thats enrolling nicely and we look forward to providing updates in the coming quarters.
Thank you.
The next question comes from the line of Annabel <unk> with Stifel. Your line is now open.
Hi.
Couple more on other dialects. So you mentioned a couple of times now expanded indications the only indication we know of.
Working on as the EMR syndication so.
Are there others that we don't know about that you plan on expanding into and also with.
The EU launch.
And now have 23 countries.
Approved I guess five in the major major.
Countries, but are all of those countries onboard.
Should we now see a significant expansion and.
Dialogues.
Thanks.
Rob would you like to talk a little bit about some of the additional data we are generating with <unk> and then maybe Kim you could talk a little bit about the potential for broader use of the product over time.
Yes.
Yes.
You are right that we are evaluating <unk>.
The active there is to generate data.
Yet another seizure type.
Having two two.
The three indications, we have really trying to demonstrate that <unk>.
Broadly active across different seizure types.
Regardless of the underlying etiology.
We also continue to provide evidence around the indications we have both in terms of.
Anti seizure effectiveness, but also in terms of.
Other potential benefits of <unk> and you heard Dan referred to as a caretaker survey and we continued to support.
And <unk> studies.
Along those lines as well.
Yeah sure. So I'll say that we've had very nice growth in the three indicated population as well as growth overtime and the base of prescribers that are utilizing epidiorite.
And.
What we see traditionally.
Our customers get more and more experience with the product.
Usually starting in the three indications.
See what it can do for their patients in terms of seizure control and now and beyond.
Seizure control, but frankly, they've been hearing about from caregivers since day, one of the launch and this really gives them the confidence to start using it more broadly across the spectrum of.
Various seizure types and so forth. So we're clearly not promoting it outside that but this is what we hear from the providers once they get the experience.
The efficacy they do start to utilize it earlier and more broadly across their patient population and really the.
The data as we've talked about that we've been sharing to really increase the efficacy perception of the product the <unk> combination data in and.
Of itself get them to stop and think about why am I reserve in this for a certain patient types. Most of my patients are in Columbus, and most of them can still benefit from additional seizure control or beyond seizure benefits.
And it really gets them to start thinking about actually using this more.
And more and more.
Of these patients that are taking club sandwich.
Thank you.
Our next question comes from the line of Jeff Hung with Morgan Stanley . Your line is now open.
Thanks for taking my question for <unk>, you've talked about focusing on adolescents and young adults.
Talk a little bit more about how that's going and how much of that opportunity remains to be addressed.
Yes Kim.
Sure Love two love talking about <unk>.
What we've really seen with <unk> is just lots of excitement in general and I think as we told you early on.
It didn't take very long for health care providers will have confidence in the supply and return to our best clinical practice in terms of switching patients at the first signs of hypersensitivity at this point in the pediatric market.
Tom.
Almost universally to the protocols in that setting so at the beginning of this year. We did tell you that we were looking to start.
Ryan can expand the adolescent and young adult market there are quite a bit of use in a fair amount of usage of the product in adolescents and young adults that were being treated in the pediatric center.
Pediatric protocol.
But in our adult centers or less educated familiar and experienced with.
We use.
Using <unk> in this setting and so bond out there. This year, we have now two quarters educating them on the product about the importance of switching.
As possible and they see a hypersensitivity reaction and we see nice orders coming through and a nice growth rate happening in that setting. So we don't think we're done we haven't gotten all of these centers to start using it some of them are still dabbling, but there definitely is.
Some more growth to be had there.
I think it's important to remember that in the adult setting.
Because this is a weight based product the average dose.
Hire them in the pediatric centers that each about patient.
It is worth more so.
We're really pleased with filings at this date, but we think there's a little bit more room to grow here in the U S. And then of course ex U S.
Thank you.
Our next question comes from the line of <unk> Prasad with Barclays. Your line is now open.
Good afternoon. This is shell on <unk> question, just a quick one on August two our program, although data for Ta <unk> recently published our New England Journal Medicine.
The fab tariff of liver toxicity, <unk> 99, and therefore, what's the impact of reactive Mitel Biotics. Takeda also mentioned that <unk> won and Ta canine landfall do have the overlapping metabolic pathways so listening to Jay.
401 is well differentiated with Ta canine ample to avoid this issue. Thanks.
Yes.
Rob.
Yes. Thank you for the question so the liver toxicity.
Seated with 99 four was known at the time.
That we entered into the partnership with Sumitomo and we focused on chemical series that we thought were distinct enough.
Such that that would be at risk of liver toxicity.
Wouldn't be carried over and so we do think that our molecule is substantially differentiated from the chemical series.
That you referred to.
Thank you.
The next question comes from the line of Mohit Bansal with Wells Fargo. Your line is now open.
Great. Thank you for taking my question.
And congrats on all the progress so may.
Maybe like one question regarding the authorized generics of Xyrem do you think they will have any impact on <unk>.
Each market as we.
Because in our talks with doctors.
This thing that they can prescribe.
Prescribe it.
As long as there is color it appears with body covered it. So do you see this as a threat because doctors could use it off label.
Thank you.
Yeah, well I'll remind you that.
The Xyrem did not do a comprehensive clinical program and the way that <unk> has.
NIH, they're slightly different dosing information in the label.
And while you're right that physicians can prescribe the product that does not always mean that that product will be successfully reimbursed Kim any comments you want to make on the marketplace.
Yes, sure. So yes, we've seen traditionally that payer at that ACP is have had trouble getting coverage for acts the date for idiopathic hypersomnia, because payers restricted it with the introduction of evaluate for idiopathic hypersomnia.
We have achieved nice coverage as we do with narcolepsy at 90% of commercial lives.
Having coverage.
Honestly as utilization management criteria.
In our in place there.
And certainly even heavier utilization management criteria around.
Non indicated products. So we feel confident that while it's more of a small portion of health care plan.
They cover high sodium acetate.
In particular, the AG for idiopathic hypersomnia most of them are following the FDA approved label.
And <unk> is the only FDA approved treatment for idiopathic hypersomnia.
And Rob maybe you could just.
Maybe you could just expand a little bit on that slightly different dosing information.
Yes Bruce.
Specifically with regards to narcolepsy RIAA chair.
I meant IH, but you can talk about dosing flexibility generally.
Sure so starting with IH then.
The clinical trial allowed for an initial.
Dose of up to six grams and at the time. It was designed that way because there was some uncertainty around whether IH patients would wake up to.
To take that.
Dose what we found in the clinical trials with initiation of XI wave.
Patients with IH improved substantially.
And in fact, we're able to.
Go ahead and take the second dose.
And overall that was the more common dosing regimen, even though in the trial and we find that to be the case in clinical practice as well.
Along those lines for narcolepsy as you know we've also has dosing flexibility.
Allow for uneven doses and we find that.
<unk> really do prefer this.
Oftentimes schedules are different from one patient to another.
But even within a patient schedules may different data that different day to day week days weekend, depending on family obligations.
And they like the flexibility.
Of uneven doses.
Potentially.
Thank you.
The next question comes from the line of June Lee with <unk> Securities. Your line is now open.
Hi, congrats on the quarter and thanks for taking our questions.
How does how do you quantify the trade off between having a Wednesday night drug with high sodium versus twice a night drug no sodium.
Isn't isn't having to wake up in the middle of night also unhealthy and as a quick follow up do you have any views on Reboxetine currently in phase III for our core narcolepsy with data expected in the fourth quarter. Thank you.
Yes.
Yes.
Yes, Rob maybe I could.
Have you jumped in a little bit on the night time impact of oxalate therapy.
Yes.
Two Bruce so we know that narcolepsy patients have significantly disrupted nighttime sleep, but we also know that Oxyt Bates.
A very big impact in improving.
The architecture of nighttime sleep, and we think Thats why.
For short acting drug.
Patients then have substantial improvement in daytime symptoms like cataplexy and excessive daytime sleepiness. When you look across studies of auction based whether that be a fixed dose high sodium version.
Or.
Sure.
<unk> immediate release.
To date.
There is improvement.
It's very comparable there is no evidence that that a fixed dose regimen improves disrupted nighttime sleep to a greater extent.
Patients typically do not normalize their sleep and Theres really no evidence that waiting to take.
Second administration.
Impacts one way or another.
And then Rob I think there was a question on <unk> at the at the end of the question as well.
And sorry could you just repeat that for me then.
I think the question was any thoughts on data on <unk>.
I mean I'll jump in.
Historic.
Historically, we and our conversations with Kols, we've not found.
That there is much interest in that as well.
Other drugs available or in development.
This has been available in certain markets for a long time.
In in.
Treatment of other diseases, but we haven't heard of a huge success.
In this patient population.
In the U S. Okay.
Thanks for clarifying that Bruce and I would just say that.
Our focus with <unk> is a nighttime administration.
To address the underlying causes of disrupted nighttime sleep, which has profound effects in daytime symptoms of Oxford team is one of <unk>.
Uh huh.
Several drugs that to use as a daytime alerting agent.
And.
And sometimes complementary to auction based but we don't think.
Substitute for many patients.
Thank you.
The next question comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is now open.
Yes.
Evening, Bruce and team congrats and good commercial performance in the quarter and thanks for taking our question sorry to ask you about a nuance in the pipeline, but it actually relates to the next readout that could come and that's an <unk> 15 PTSD.
Disorder, I guess I'm wondering if.
Given that this is an early phase two would you focus more on stat, Sig and effect size or the overall results of the study to enable the drug to move forward and then in terms of the statistical analysis plan.
It looks like the wide range.
Doses. So I guess I'm wondering is at each dose relative to placebo or would you combined doses.
The analysis of the two dose groups versus placebo.
Rob do you want to say thank you for your question.
Yeah. Thanks, Bruce we do think the cap size is a comprehensive composite endpoint.
It has.
<unk>.
As an endpoint that could be used for approval and it does catch or quite a bit.
Rod range of symptomatology.
PTSD patients. So we do think that Thats, a good way to measure.
<unk> of the drug.
We are measuring other things and exploratory waste as well, which we certainly will take into account.
Youre right that the trial has three arms two active dose levels in placebo and given the sample size that we have we feel we are well powered.
To make comparisons with both of those different dose levels against placebo, we don't have to collapsing across those lines.
Okay.
Okay.
Well I think that was our last question. So I just wanted to jump in and thank all of our questioners for moving us through I think most of our commercial business a lot of our pipeline.
And our strategy hopefully people feel great about the quarter on the topline on the bottom line the new guidance increased diversification and the momentum we have in our business, particularly our three key growth drivers in <unk> <unk> and <unk> I'd, just like to close today's call by recognizing.
All of our <unk> colleagues for their efforts in delivering new therapeutic options to patients and thank our partners and shareholders for their continued confidence and support. Thank you all for joining us today.
This concludes today's call. Thank you for your participation you may now disconnect your lines.