Q3 2023 Aurinia Pharmaceuticals Inc Earnings Call
Greetings and welcome to <unk> Pharmaceuticals third quarter 2023 earnings call. At this time, all participants are in a listen only mode.
And answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
Now I'd like to turn the conference over to your host Jamie Harrow invest.
Investor Relations for <unk> Pharmaceuticals.
Again.
Thank you operator, and thank you to everyone for joining today's call and webcast to review and discuss are waning as third quarter and nine months 2023 financial and operational results.
Joining me on the call. This morning are Peter Greenleaf, Chief Executive Officer, and Joe Miller, Our Chief Financial Officer.
This morning, Irina issued a press release announcing its financial results and operational highlights for the third quarter and nine months ended September 32023.
In addition, the company filed its quarterly financial statements on Form 10-Q for more information. Please refer to <unk> filings with the U S Securities and Exchange Commission, which are also available on <unk> website at Iridium pharma dotcom.
During today's call Iranian may make forward looking statements based on current expectations. Those forward looking statements are subject to a number of significant risks and uncertainties and actual results may differ materially.
For a discussion of factors that could affect <unk> future financial results and business. Please refer to the disclosures in our rainiest press release and its quarterly report on Form 10-Q, along with the <unk> annual report on Form 10-K, and all of its recent filings with the U S Securities and Exchange Commission and Canadian Securities authorities.
Please note that all statements made during today's call are current as of today Thursday November 2nd 2023, unless otherwise noted and are based upon information currently available to us at this time.
Sept as required by law Iridium seems no obligation to update any such statements.
Now, let me turn the call over to Iranian President and CEO, Peter Greenleaf Peter.
Thanks, Jamie and good morning, everyone I wanted to thank you all for joining us on today's call on this morning's call will focus on the company's third quarter and year to date performance, we will discuss key metrics and significant commercial highlights for Luke <unk> will then provide an update on our progress outside the U S and close with.
A brief update on R&D activities for both live kindness as well as our pipeline assets. I'll, then turn the call over to Joe Miller, our CFO to provide additional details on our financial results.
Now, let me dive into our overall business performance.
I'm pleased to share that we continue to make progress over the last three months and year to date with loop kinase, both domestically and abroad.
Highlighting the third quarter, we achieved $48 million in loop kind of snap product revenue, which represents an increase of 60% versus the prior year's third quarter.
We're quite pleased with these results in particular in light of the impact that the summer months have had on our business historically.
This brings year to date loop kindness net product revenues through the end of the third quarter to $116 $2 million.
This represents an increase of 55% versus the same year same same time prior year.
As a result of our strong third quarter, we're narrowing our net product revenue guidance for 2023 from $150 million to $160 million to $155 million to $160 million.
Additionally, in the quarter, we recognized a 10 million dollar ex U S milestone from our collaboration partner Otsuka pharmaceuticals for securing the pricing and reimbursement approval in Europe.
This plus royalties from ex U S sales brings our total revenue for the third quarter to $54 $5 million.
Leading the Companys key commercial metrics for the quarter patient start forms remains strong throughout the period with 436 P. S fs in the quarter.
This represents a growth of 17% over the prior year's third quarter.
Driving new patient starts continues to be an important area of focus for us and we're pleased to see that psf's remained relatively stable throughout the summer.
Through the end of October we recorded approximately 1500 10 Psf's since January <unk> 2023.
Patient conversions to therapy remain at high levels with approximately 90% of all patients who have a patient start forms submitted receiving actual treatment.
We're very pleased with the majority roughly 65% are now starting therapy within 20 days.
This represents continued strong execution from our best in class patient support services group a rainy alliance.
Once you get a patient onto therapy equally important is how long they stay on therapy as we know their underlying disease as a continuous inflammatory process requiring maintenance therapy.
Our 12 month persistency rates remain around 54% with 15 month persistency at about 48% and now we're seeing 43% persistency at 18 months.
We had a total of 19 <unk> hundred 39 patients currently on therapy as of September 30th 2023.
While this number continues to grow there's been a slight increase in the quarter of discontinuation was it which is a function of when patients initiated therapy and when they're falling in the persistency curves at the quarter end.
We're also pleased to report that we have approximately 4000 patients who had been treated with loop kind of since launch.
As stated on previous calls our business plan is focused on activating three main levers in the gross to loop kindness and lupus nephritis market.
Educating health care providers on the need to screen and treat more aggressively.
Activating the patient to advocate on their behalf and then lastly, continuing to clinically differentiate loop kindness and position it as part of the foundation therapy in the treatment of L. N.
We now have the full complement of data to be able to share with the medical community. When we look at the comprehensive data set from the original Aurora trial in our pivotal results.
The Aurora two extension study demonstrating long term safety and efficacy.
And the biopsy sub study depicting tissue level evidence of no net for a toxicity associated with Luke kindness we.
We continue to educate physicians on these datasets as we further work to penetrate and grow the lupus nephritis market.
Our first lever is driving health care providers to act with urgency to screen and treat patients more aggressively getting them to recognize the consequences of their lack of action.
We continue to emphasize the importance of treating the goal and reinforcing the guidelines on rapid and sustained reductions in proteinuria to preserve the kidney patients kidney function.
Over the third quarter, we maintained our call activity on high decile targets driving home the message of treatment urgency goals of therapy, and the benefits of loop kindness and helping physicians meet their ultimate goal of kidney preservation.
In the quarter, we increased the depth of prescribing in our current base of customers as well as expanded the total number of new prescribers.
Additionally, we're starting to see patients come back to therapy as restarts, we have begun to examine this phenomenon. We believe it is a good indicator for the brand one because physicians are comfortable with loop kindness and two if they're restarting therapy. They must have had a good experience with loop kindness during their first exposure to therapy.
We believe this bodes well for the further for further growing the brand with Suez is somewhat unique segment of patients.
It also becomes an opportunity to discuss extending the duration of therapy in these patients based on both the Aurora extension study biopsy data as well as the recently published guidelines for Mueller.
So you have our guidelines further support our messaging and educational efforts they reinforce the need to routinely screen lupus patients to treat aggressively to treat to target proteinuria levels and to maintain proteinuria at manageable levels throughout three years.
Let me go into a little bit more detail regarding the recently published you'll our guidelines and their advancement for the treatment approach to L. N.
At a high level four key areas benefit loop China's the first is driving earlier diagnosis.
Early diagnosis and regular screening for Oregon involvement, especially in L. N with prompt initiation of therapy aiming at remission in strict adherence to treatment is essential to preventing flares in Oregon damage as well as improving prognosis and enhancing patients' quality of life.
The need for routine monitoring as a second.
SLE disease activity should be assessed at each clinical visit within a valuation of organ damage using validated instruments vigilant monitoring for new Oregon involvement mainly kidney organ involvement from L N, especially in the first years of disease and thereafter.
The third is that the committee recognize the need for a treatment paradigm shift that moved to loop kind us up in the line of therapy.
Quote unquote with the breakthrough of loop kindness, our novel C&I for L. N consider shifting and introduction and induction maintenance regimen to early use of combination therapies.
And lastly, long term treatment following the following renal response with loop kindness treatment of Ela and should continue for at least three years based upon the long term Aurora extension study, leading that reported stable egfr throughout the three years of data.
We believe these guidelines to actively support our strategic approach to the management of L N and how to use loop kindness and the physician's treatment regimen.
Our second focus is educating patients on the appropriate seriousness of their condition and to advocate for themselves.
We need them to ensure that they're getting screened for kidney involvement with their lupus and that they're routinely monitored to ensure their well being and kidney preservation.
We have several patient directed campaigns ongoing that are focused on educating the patient about their disease and the consequences of not getting screened.
They also advocate for routine monitoring by their physicians. The majority of these campaigns run through that did digital marketing and social media channels to maximize reach to target audiences in a cost effective manner.
We have also been working with Toni Braxton the spokesperson for our unbranded disease awareness campaign get uncomfortable.
To date her message has reached over 750 million media impressions and tens of thousands of SLE and lupus nephritis patients.
Our third strategy is directed towards clinically differentiating loop kindness from sub standard therapies and working to establish loop kindness as a foundational therapy for all all on patients.
The company recently announced the launch of the Aurora two extension data for loop kindness and September the extension data was published in arthritis, and rheumatology the official journal of the ACR.
This publication, along with our biopsy data gives us a great opportunity to go into the remainder of the year reinforcing our long term safety and efficacy of loop kindness.
In addition, our ongoing medical affairs initiatives are focused on evolving the treatment approach for L N and educating healthcare professionals about loop kindness.
Our medical teams continue to work with the global key opinion leaders to ensure that they have the latest information in support of their guideline writing efforts.
This holds true for the recent <unk> guidelines as well as the upcoming Kid ego and ACR guidelines that our continued underdevelopment.
Throughout the third quarter, our medical team engage with physicians and health care providers over 1000 times. They engaged over 100 clinical data presentations 95 follow ups to medical information requests and 150 in light L and relative relative related visits.
For the two upcoming major medical meetings of the American Society for Nephrology, a S N and the American College of Rheumatology ACR in November they have 14 abstracts and posters that were accepted and being present brand being presented.
Now moving onto our globalization efforts for loop kindness, our collaboration with Otsuka has resulted in significant launch momentum outside the U S. This year.
Having received European Commission, British and Swiss marketing authorizations.
Soup is now focused on launches in securing pricing and reimbursement approvals in various countries throughout Europe.
In the third quarter, we recognized a 10 million dollar milestone from otsuka for securing pricing and reimbursement approval and three of the five major countries in Europe.
In addition, this quarter, we started recognizing collaboration revenues related to our motto plant and offsetting a portion of our fixed facility fees as well as royalties on our European sales for loop China's.
Our work without Zug in Japan remains on track for regulatory submission before the end of the year.
Upon approval in Japan, which is currently anticipated for the second half of 2024, we would be eligible for an additional $10 million milestone around the approval in Japan, along with low double digit royalties on net sales once launched.
Now, let me close with our R&D activity, we continue to enroll patients in our L. N registry and currently we have 71 sites activated and a total of 113 patients screened with a 111 are rolled.
The vocal pediatric study also remains ongoing.
As for our pipeline, we remain on track to file an IND for a EUR 200 are bad April inhibitor by the end of the year, we continue to evaluate potential autoimmune and kidney related target indications with a high unmet medical need for this asset.
As for EUR 300, our novel peptide therapeutic that modulates M. Two macrophages via this anti CD 206 receptor. We are currently in reformulation work on this product as we work towards an IND submission by the end of 2024.
Before I turn the call over to Joe I'd like to give you a brief update on the ongoing strategic review, which we now announced a few months back.
As a reminder, we initiated a strategic review of the company at the end of June.
We continue to work through the process of reviewing strategic options for the company, which include a variety of possibilities ranging from a potential sale or merger or other strategic transaction. We have no further updates on the matter other than that the process is actively ongoing we remain committed to run.
A fulsome process that reflects the best interest of the company, our shareholders and other key stakeholders, including our patients health care providers and our employees. We asked for your patience in these matters and know that when we have something material to share at the appropriate time, we will share it.
With all of our stakeholders.
I'd now like to turn the call over to Joe for a more detailed review of our financial results and of course I will then return at the end of the call for a quick recap and open up the line for any questions that you might have Joe.
Thank you Peter and good morning, everyone as of September 32023, we had cash cash equivalents restricted cash and investments of $338 5 million compared to $389 4 million at December 31, 2022, and $350 7 million at the end of Q2 2023.
The decrease in cash cash equivalents restricted cash and investments is primarily related to the continued investment in commercialization activities and post approval commitments of our approved drug loop kindness inventory purchases advancement of our pipeline and motto plant payments, partially offset by an increase in cash receipts from sales of the kindness.
<unk>.
We believe that we have sufficient financial resources to fund our operations, which include funding commercial activities, including FDA related post approval commitments manufacturing and packaging of our commercial drug supply funding are supporting commercial infrastructure advancing our research and development programs and funding our working capital obligations for at least the <unk>.
Few years.
Now, let's take a few minutes and go into detail regarding our financial results for the third quarter and the nine months ended September 32023.
Net product revenue was $40 8 million for the quarter ended September 32023, and $25 5 million for the quarter ended September 30th 2022.
Net product revenue was $116 2 million for the nine months ended September 32023, and $75 1 million for the nine months ended September 30 of 2022, the increase for both periods is primarily due to an increase in product sales to our two main customers loop kindness driven predominantly by further penetration of the Ellen market.
Total net revenue was $54 5 million for the quarter ended September 32023, and $55 8 million for the quarter ended September 30 of 2022. The decrease period over period is due to the recognition of a $30 million regulatory milestone from otsuka following the EC marketing authorization of loop kind of since September 2022.
Partially offset by the recognition of a 10 million dollar pricing and reimbursement milestone in 2023 as well as additional collaboration revenue from Otsuka in 2023.
Total net revenue was $130 4 million for the nine months ended September 32023, and $105 6 million for the nine months ended September 32022. The increase is due to the affirmations aforementioned increase in net product revenue, partially offset by the change in milestone related revenues.
Total cost of sales and operating expenses for the quarter ended September 30 of 2023 was $70 8 million and $65 3 million for the quarter ended September 30 of 2022 total cost of sales and operating expenses for the nine months ended September 32023 was $192 4 million versus 189 million in the prior year Pearce.
Should.
Let me now give you a further breakdown of operating expense drivers and fluctuations.
Cost of sales amounted to $6 8 million and $2 4 million for the quarters ended September 30 of 2023 and September 30 of 2022.
The increase was primarily due to increased sales of loop kindness, coupled with the amortization of the mono plant finance right of use asset which was placed into service in late June of 2023.
Cost of sales was $8 8 million and $4 3 million for the nine months ended September 32023, and September 30 of 2022, respectively. The increase was primarily due to the increased sales of loop kindness, coupled with the amortization of the model plant finance right of use asset partially offset by higher inventory reserves in 2023 due to the <unk>.
Down at the FDA validation batches.
Gross margins for the quarter ended September 32023 was 88% versus 96% at September 32022.
Gross margins for the nine months ended September 32023, it was 93% versus 96% at September 30 of 2022.
Selling general and administration expenses inclusive inclusive of share based compensation were $47 8 million and $52 2 million for the quarters ended September 32023 September 30 of 2022, respectively.
The primary driver for the decrease in SG&A expense was a decrease in professional fees and services, including legal fees incurred during the quarters with respect to litigation matters that occurred during the three months ended September 30 of 2022, partially offset by an increase in share based compensation.
SG&A expenses inclusive of share based compensation was 145.0 million for the nine months ended September 32023 versus $148 9 million at September 30 of 2022. The decrease was primarily due to a decrease in professional fees and services, including legal fees and other corporate costs.
Including rent and insurance, partially offset by an increase in share based compensation expense.
Noncash share based compensation expense included within SG&A expense for the quarter ended September 32023 was $9 6 million versus $6 6 million for the prior year period noncash share based compensation expense included with an SG&A expense for the nine months ended September 32023 was 27 million versus 21.
One 5 million for the prior year period.
Research and development R&D expenses inclusive of share based compensation were $13 6 million at September 30 of 2023 versus $11 million for the quarter ended September 32022. The primary driver for this increase in both quarters was due to an increase in C. Our own development cost as the company's advances as pipeline assets.
R&D expense of it inclusive of share based compensation expense was $39 4 million and $35 1 million for the nine months ended September 32023, and September 30th 2022 the primary drivers for the increase in the nine month period were an increase in cost to advance its preclinical assets and an increase in share based compensation expense.
Partially offset by the decrease in costs associated with the completion of the Aurora continuation study and drug drug interaction study, which were substantially completed in 2022.
Noncash share based compensation expense included within R&D expense was $2 million and $1 5 million for the quarters ended September 30 of 2023 and September 30 of 2022.
Noncash share based compensation expense included within R&D expense was $5 7 million for the nine months ended September 32023, and $3 5 million for the nine months ended September 32022.
Interest income was $4 5 million at September 30th 2023 versus $1 5 million for the prior year period.
Interest income was $12 4 million and $2 2 million for the nine months ended September 30, 30th 2023 and September 30 of 2022, respectively. The increase for both periods is due to higher yields on our investment as a result of increased interest rates.
For the quarters ended September 32023 Arena recorded a net loss of $13 4 million or <unk> <unk> net loss per common share as compared to a net loss of 9 million or <unk> <unk> net loss per common share for the quarter ended September 32022 for.
For the nine months ended September 32023, a Rooney I recorded a net loss of $51 1 million or 36 net loss per common share as compared to a net loss of $82 1 million or 58 net loss per common share for the nine months ended September 32022.
With that I'd like to hand, the call back over to Peter for some closing remarks Peter.
Thanks, Joe as you heard throughout the call. We're obviously excited about our strong results for the quarter and our momentum through the first three quarters of the year.
We continue to focus on business fundamentals and commercial execution.
Our commercial teams are concentrated on delivering the newly published data from the Aurora two extension study and educating healthcare providers on the promise of kidney prevention for their lupus nephritis patients.
Our R&D teams are focused on our regulatory commitments for loop kindness and advancing our two pipeline molecules into the clinic.
And our executive team and our board are working behind the scenes of our day to day business on the strategic review process to deliver value to all stakeholders in our NDA.
We remain focused on delivering loop guidance to patients in need and driving results in the U S and key markets globally.
We look forward to keeping you all posted along the way I want to thank you all for joining us today and I'd now ask the operator to open lines for any questions there may be operator.
Thank you if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is it. The question Kim you May press Star two if he would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our first question is from Maury Raycroft with Jefferies. Please proceed.
Hi, Good morning. This is finally getting on for Maury.
Good to see the persistence stabilizing so far at 12 months and 18 months.
Can you talk more about the feedback you're getting from the prescribers.
For those spaces any payer how much leveraging how much leverage you know doing the guidelines.
Great.
Yeah, I mean listen I. Thank you for the question Yeah. We're encourage by not only a 12 month persistency, but 18 month. Then was we didn't report on the call. It 24 month persistency kind of shows a flattening of the curve. After after 12 months to 18 months, which which is encouraging.
I think the key takeaway should be most of this was driven in a time period, where we had launched the product and got approval with the Aurora. The original Aurora data, which was one year data and since that time period and has recently come to a head with the publication of.
The Aurora extension study, which has added an additional two years of data on top of the one year data. So three years of safety and efficacy now and the biopsy data, which was recently presented at one of the regional meetings.
And we will continue to be presented at ACR and ASN are all adding to our ability to go out there and promote actively through the right channels and the right way.
Through medical affairs, and through providing information on medical requests on that data to physicians. So we're encouraged by feedback we get from physicians and patients as you know historically this has been sort of a start and stop disease and patients actually show a reducing of proteins.
Many times physicians will remove meds and that includes MMF and steroids.
The new guidelines publisher, you Lar future guidelines coming from ACR and ASN. We're encouraged that we already see a reinforcement of the importance of keeping patients on therapy in maintaining.
The control of that inflammatory process, because obviously the results are or would be quite negative for patients. So there's a shift happening and we're encouraged by the data. So the feedback we've gotten so far has been good.
Great and then based on your efforts. So far do you have a sense of whether they are leading to increase diagnosis rates yet.
Yeah.
You know all we have is qualitative data at this point on that front and what I would tell you is the qualitative is yes, but we look forward to reporting more quantitative as it's important for the future growth not only of the brand part of the market in total so encouraging qualitative data, but nothing quantify.
Side yet.
Okay, and then quickly for Joe the.
The box came in significantly higher versus prior quarters. If you can provide some color about that.
Yeah foreseen as mentioned in the prior quarter call. The motto plant came online right at the right at the tail end of the second quarter. So this quarter third.
Third quarter, we had a full absorption of the mono plant facility of which a portion approximately 50% is actually reimbursed via tsuga under the supply agreement, which is reflected in the collaboration revenue. So you see a little bit of an offset.
<unk> and the collaboration revenue.
To answer your question, yes, perfect. Thank you so much.
Yeah.
Our next question is from Joseph Schwartz with Leerink partners. Please proceed.
Hi, Thanks, very much I was wondering first of all if you could talk a bit about how you arrived at your new guidance and why it might not be proportionately higher to what you delivered this quarter it looks like you'll be able to hit the low end.
Even if sales decrease from the third to the fourth quarter.
Especially given the robust.
Patients start forms numbers, we've seen for October. So I was just wondering if there's any reason for pensive newness or if you can give us your your your insight into that and then I have a follow up.
Yeah, I I expected the question Joe on the short answer is we raised the low end of the guidance because I think you're right I think you'd have to decline to even get to the low end of guidance. We've tightened the range because based upon the quarter and the new patient starts that we actually saw in the quarter.
We want it to be somewhat conservative about you know, where we were going to fall in that range. So for example, if we saw the same sort of new patient starts in Q4.
We feel conservatively that we can still hit that guidance range. You would have if you fell below you'd have to decline in the quarter to be below that guidance range and I think there's just a level of conservatism there that we wanted to be predictable and be.
Consistent with our with our performance had we seen a higher number of new patient starts in Q3, there's no doubt we would have taken up the upper end of that range.
Okay. Great. Thanks, that's helpful. And then how has the number of prescribers and repeat prescribers and trending relative to the total number of patients on drug.
We appreciate the the latter numbers, but any insight into the former would be helpful. I'm. Just wondering how satisfied you are with the breadth of prescribers relative to the penetration for a little guidance within each practice.
Yeah, I think as you know Joe we haven't given the total prescriber numbers, yet, but it's one for us to go back and Chew on and think about reporting some of that's been for competitive reasons, but what I can tell you is there now are thousands of physicians within that total universe that have have utilize the product.
That we've seen double digit increases in terms of percentages on both.
Volume of prescribing from our from from our are repeat prescribers and in our prescriber base. So we're happy with the the penetration as we've said all along is that you mean of the universe of Nephrologists and Rheumatologists have prescribed products for the treatment of lupus N L N.
The 80 20 rule applies here, you know 80% of prescriptions come from somewhere around 20% of the prescribers and we think our penetration within that universe is actually quite good and the depth of our prescribing and there continues to improve as we get on future calls, we will look into whether we want to start reporting this specific numbers, but as.
I said, that's more for competitive reasons as to why we haven't rolled that out.
Thanks again.
Thanks, Joe.
Our next question is from Stacy <unk> with TD Cowen. Please proceed.
Hi, Peter Joe Thanks for taking my question and congrats on a very strong quarter. This is vishal on light they see them.
So given we have three of US are results from three quarters behind US could you talk a little bit more about your expectations for next year, how do you see sales and Ah patients start forms panning out over 2024.
Yeah, So I think our system did.
Did you have another question.
I can't I cannot that after this one thank you yeah I have a fast response to that I mean, we're going to try to stay consistent with what we did last year and give some sort of steer prior to her around or before JP Morgan next year and I think there's a lot of things weighing on that but that's that's what we did last year.
Year I think we gave some characterization in Q3 due to the summer challenges. We saw in 2022, and then we reaffirmed that or it got tighter on it prior to J P. Morgan. So we're gonna stay consistent with that and and not give any look for 2024 until then.
You had another question Bush.
Yes, I had a question regarding the net pricing so based on the information given in the press release and on the call. It seems that even for Q3, the guided price. The net price that we're seeing is a little bit above the guided price how do you see that settling over Q4.
I think the best way to think about this and I realize.
We have been pretty dogmatic about this at our estimated average net of 65000 per patient per year, but I think I would hope that everyone can appreciate that we have slowly.
Sale down closer and closer to that point, we don't give quarterly guidance, so not going to be much very helpful. There, but I guess, what I would encourage you to do is just look at the trend and then continue to trend downward into the quarter and we think as that settles out and it'll be closer to an average of 65 net per patient per year.
Yeah.
Got it thank you.
Our next question is from Olivia Brayer with Cantor Fitzgerald. Please proceed.
Hey, good morning, guys. Thank you for the question I wanted to drill down on Psf trends it looks like there's a downward trend in October versus what you saw in August and September So how should we be thinking about patient start form growth over the next few months and then I've got a quick follow up.
Yeah, well first thing I would just take you backwards a little bit on is it was encouraging to see the psf work that we did in those summer months that we had not historically seen the two years before that and then the trend in October was still higher than what we had seen in the same time period last year, So I guess what I.
I would lead with is we're trying not to read too much into it and I. You know recent numbers look encouraging as is all I'll leave you with and you know were talking somewhere around five to 10 Psf difference from what we saw in those summer months to what we saw in October So I'd say, there's a level of <unk>.
Consistency, there and our hope would be as we get into now October November December that we're going to see an increase in that trend. So.
Oh, we're not reader.
And can you give us any any color on or any more color on how the strategic review process is going and really I guess my question is whether there've been any learnings or takeaways from our process. Since you began at back in June.
As I'm sure you can appreciate my hands are somewhat tied on on what I can and cant say here, but so I'm going to I'm going to stick to that outside of saying that we're working hard and we're taking a very serious and and that's both at the management level and the board level, we see this as a real opportunity to.
Accelerate our strategy and to keep an open mind in all directions, not that we've not historically done that but this gives us a very focused way to do it when we have more or something material to report its on or it's in our obviously, our best interests to report that out and and we'll make sure to do so but outside.
That I can't give much more color.
Okay, great. Thank you.
Thanks Olivia.
Our next question is from Justin Kim with Oppenheimer and company. Please proceed.
Yeah.
Hi, Good morning from and then actually and you have to come back on.
Hmm.
Question.
That's on a that's a great question again.
You've kind of seen maybe more of a smoothing and avoiding a maybe back to seasonality in the summer.
I'm just curious do you have any color as to what might be driving that thing or whether they're a new level being reached here just any additional color that maybe it's more of a medication and prescriber practice.
What would be helpful. Thank you.
Just south Philadelphia is going well for you all of our team is on the ground as well for ASN.
We worked a lot of different angles, and I think in the summer months and I give a lot I give credit to the people who are driving this which is our marketing and sales people out there doing their work on a day to day basis I think the data around the extension study being published is quite helpful to biopsy data.
Quite helpful.
Blitzer tactical execution during that time period, I think all points to potential levers, but I think as I think the base of your question and the one that we need to continue to prove out is that it's consistent and that it can pull forward and that we're gonna start reaching new levels on psf trends it's important.
No not not just the near term execution, but more importantly, the long term gross and and how how big the product can be in the future. So yeah I outside of you know a host of different tactics and the new data that we have to bring to bear on the market. Those are the two things I would point to and then.
And I guess reinforce what your underlying question is which is we need to continue to see I say well, we need to see a new plateau start to be reached in terms of psf performance moving from that let's call. It 450, or so P. S apps per quarter two.
You know for 80, and 505 hundred and beyond and we believe that this new data alongside of our push on on on talking about guidelines impacted disease treating to target are all parts of key components of unleashing that.
Great. Thank you.
Our next question is from Ed Arce with H C. Wainwright. Please proceed.
Hey, Peter Joe Congrats on a strong quarter and.
Uh Huh, my greetings as well familiar with them.
I wanted to ask you about the guidelines.
And as you mentioned.
Some of the points from the U R guidelines it seems.
They were really quite supportive of kindness.
But wanted to ask as the guidelines from could you go a S. D C R.
Our forthcoming.
How do you.
How do you view these as important in driving.
Awareness with physicians and growing scripts and growing strips more consistently.
And would you expect these other two guidelines to be as supportive.
As you are.
And I guess along with that.
What would they include the three major studies that you mentioned as well as the pediatric study.
Well I can't obviously, I can't predict where the guidelines or go will go but I'm hopeful that they will be.
In line with where you are is which.
With emerging therapies, and and pipeline starting to show productivity for many companies within our space today you'd have to address novel therapies and novel treatment approaches and I think there'll be consistency, although I can't thank for that group as they do their work.
But were predicting that that they'll address more aggressive use of novel therapies, I guess just to rewind back prior to the <unk> guidelines and new ones being published when you know there was the old approach to you or could you go and H C are there are there are several things in.
There that reinforce really important components for US. One is you know doing consistent diagnosis for S. L. Lee patients. We believe only about 50% of SLE patients had visit an office practice on any given day get a you get a urine screen for lupus.
Nephritis the guidelines have always been consistent that every time an S. L E patient visits the office they need to be screened we see that as a huge driver potentially newly diagnosed or existing patients that are currently getting diagnosed the second is treating to target and trying to reach certain protein.
And urea levels by three months and six months end of year target levels that we know today, Rheumatologists and Nephrologists don't aggressively treat too and aligned with our data. We're the only product that actually shows consistent performance at those levels aligned to the guidelines so.
There is a lot of gems within the guidelines that if we can just get physicians treating more I guess more in a more can grow in fashion that we can you know actually you know see the market start to grow your last question of whether the all incorporate the new data you published data is usually what they look for.
Or and the extension data has now been published the Aurora study has been published the biopsies in poster form we'll see when they actually published these these these guidelines were working hard to get the biopsy study published two but usually they they point at published data not stuff thats been an abstract or poster.
Sorry for the length of the question is do you have or answer do you have another question Ed.
No that's it thank you.
Thank you.
Our next question is from the Hill.
<unk> with RBC capital markets. Please proceed.
Hi, This is sahil for dog man.
I have two questions. My first question is.
On the comment made in the prepared remarks that there were some higher discontinuation. This quarter's who is it related to summer seasonality.
Or is it more dependent on where the patients are on the.
For how long the patients have been on the drug.
It's the latter I think you have to think about this in a dynamic as you model. It think about it in a dynamic fashion and you know during this quarter, we saw more patients who have seen therapy for longer periods of time, and obviously the discontinue a discontinuation rate for patients who've been.
On drug for 12 months versus patients who had been on drug for nine months. If you see a higher average of them in a quarter youre going to see higher discontinuation rates. There's no that we can tell some are rationale as to why it was more just a mix of the patients in the quarter.
You have another question.
Yeah. Thank you for that response.
<unk> question is.
They need to prescribe cause I know this was asked before but if you could provide more kind of I think in one of the earlier calls you had mentioned that 55, that's enough to prescribe cause I'm not repeat prescribers.
Is that trained teams given the new data that we have on hand.
Thank you.
The short answer is we've seen improvement across the board and and we see less patients then 55% now a higher percentage who are prescribing more than having a higher dependence. Upon you know first time tries you know initial triage, so I as I.
Said the reason we haven't because we segment this data pretty what we we do a lot of quant on this we haven't rolled that out primarily because you know we are.
We think we give a lot of data and this one I think is important at least at this stage to keep a little closer to our best in terms of the competitive set that's out there, but I can tell you that whether it's depth of prescription.
<unk> or total number of prescribers, we've made meaningful movement on both fronts during the quarter.
Thank you.
Our next question is from David Martin with Bloomberg. Please proceed.
Good morning, Thanks for taking my questions. The first one's a follow up to the question.
Hum.
Have you made any progress in getting the nephrotoxicity language changed out in the U S label.
Based on the ore extension on the biopsy data and when the U S. Guidelines are crafted do you think they'll be affected by that language in the label or more by the U R type language.
Well I can't predict where the agency is going to go but I I can reinforce to all to everyone on the call that we announced in June that we had submitted this data to the U S. F D. A.
As expected the extension data in the biopsy data as sub study and the extension study where both expected from the agency. We were hopeful that this will be incorporated in a meaningful way into the U S. The label here in the U S. But we can't predict where the agency is going to land on it and we've not heard back anything from the.
The agency at this stage.
And do you think the guidelines are swayed by the label that much or or not no I think it's a published data.
Okay.
Question.
Do the restarts require new P S House.
Restarts require new PSS no.
Okay and last question.
What pricing did you get in the European countries, where you got the pricing.
We can't speak specifically for every country and sort of it's a it's a soup as domain. So I'm not sure how much of this they wanted to disclose but I cant just give you the color that in terms of appropriate pricing as we see it in terms of reference pricing would be novel third.
Rfps like Benlysta and negative outcome would be you know getting pricing in the generic set like a <unk> or something like that.
Okay fair enough. Thank you.
Thank you David.
Yeah. It appears that that's all the questions. We have for today I want to thank you all for your time and we'll look forward to talking to you again next quarter. Thank you very much and have a great day.
Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
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