Q3 2023 bluebird bio Inc Earnings Call
Good day, ladies and gentlemen, and thank you for standing bar walk you to the Bluebird Bio's third quarter 2023 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question at any time. Please press star one one.
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If your question has been answered or you wish to remove yourself from the queue simply press star one again at this time I would like to turn the conference over to your host Ms. Courtney Oldbury Ma'am. Please begin.
Okay.
Good morning, everyone and thank you for joining our third quarter results call. Today. My name is corneal Greene director of Investor Relations at Bluebird bio.
Before we begin let me review our Safe Harbor statement. Today's discussion contains statements that are forward looking under the private Securities Litigation Reform Act of 1995, including expectations regarding our future financial results and financial position. In addition to statements of the company's plan.
Expectations or intentions regarding the regulatory progress commercialization plans and business operations.
Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results.
A description of these risks is contained in our filings with the SEC, which are available on the Investor Relations section of our website Www Dot Bluebird bio dotcom.
On today's call and your urban Shane our CEO is going to provide some opening remarks on our overall business and potential lovers all approval.
And Tom Klima, Chief commercial and operating officer will discuss the positive momentum in ours, and tableau and especially on our commercial launches as well as launch preparations for Louis L. And finally, Chris Koch, Our Chief Financial Officer, who will provide some color on our financial results before opening the call up for Q&A.
With that I will turn it over to Andrew.
Thanks, Courtney and thank you everyone for joining our call. This morning.
As I did today to update you on <unk> Q3 results and our preparations for the potential upcoming FDA approval, let yourself.
This has been a transformative year for the field of gene therapy, and Bluebird bio <unk>.
We validated the commercial model for gene therapy, with ours, Integra and Sky solar watches.
As a reminder, blue bird occupies a unique strategic position that's why the only standalone commercial to yourself there be companies with <unk>.
Stenseth platform of gene therapy expertise.
Potentially enable growth profitability expansion for years to come.
And we are an incredibly exciting moment for our company, but most importantly for patients as we approach the potential FDA approval of love yourself for sickle cell disease in December.
In a minute, Tom and Chris I'm going to provide more details on our commercial launches the financials, but I want to focus my comments. This morning, I'll love itself as we approach the key regulatory milestones.
We are six weeks away from a little bit cell producer date of December 20th this.
This potential approval there'll be a significant moment for the sickle cell disease community.
Major milestone for our company and if approved will be the main driver of profitability for Bluebird for years to come.
I will review remains on track and our team remains confident in the robustness maturity of our BLA package for individuals' 12, and older with sickle cell disease, and a history of basal occlusive events or Bo.
We believe the fact that an FDA Advisory Committee wasn't requested for love Us out as a testament to the breadth and the depth of the Lotus all data.
Significantly more than any other gene therapy program for sickle cell disease. Additionally.
Additionally, this is the third anti viral vector gene therapy that the FDA has reviewed from Bluebird and thus a technology they are very familiar with.
Our lucky viral vector technologies also uniquely traceable, giving us an unrivaled understanding of our therapies and the ability to conduct a rigorous monitoring we understand it can measure how we modify the shell and monitor effects over time.
Last week, we announced that in early December will be presenting long term follow up data from rising peglow and lower cell programs at a 60 bed ash annual meeting.
With an unparalleled up to nine years of follow up and transfusion dependent beta thalassemia and five years of follow up in our sickle cell disease program.
We continue to progress plans for our anticipated commercial launch in early 2024, following its potential FDA approval.
With that I will turn it over to Tom to highlight how our launches are progressing.
Thanks, Andrew and good morning, everyone. We have made tremendous progress this quarter and it's exciting to be here. This morning to discuss our commercial advancement in greater detail.
<unk>, we continue to see strong linear growth with 16 patient starts or unique cell collection since launch as a reminder, patients starts remains the key commercial metric to watch in the early stages up is integral to watch as it's the value creating moment for the company and represents a commitment from the patient it is <unk>.
Our experience that once a patient goes through self collection. They will continue on the treatment journey and this will ultimately result in revenue for the company.
Our qualified treatment centers activation has accelerated this quarter and has nearly doubled since Q2 with 29 <unk> now activated at leading adult and pediatric centers across 16 states.
We remain on track to scale, our GTC network to between 40 and 50 by the end of this year as we prepare for the loved to sell watch looking ahead to 2024, we will carry our momentum into the new year likely continuing to expand our <unk> footprint to extend our reach and meet patient demand.
We anticipate patient demand for his integrity will continue to grow steadily through the end of 'twenty three and into 2024 as more <unk> are activated and gain experience treating multiple patients.
Shifting to reimbursement I'm thrilled to announce this morning that we have signed outcomes based agreements for as integral with Michigan, and Massachusetts State Medicaid agencies. Additionally, we are finalizing an agreement with a third state, which may enable us to reach a large portion of patients with beta thalassemia.
This significant development demonstrates government payor support for these types of innovative arrangements and eagerness to bring gene therapy to patients.
We continue to see strong access for his integrity and have received zero ultimate denials across commercial and government payers.
Prior authorization approvals for drug product remain consistent at approximately two weeks.
All of this progress continues to underscore that payers recognize the value of <unk> and the high burden of disease for patients with beta thalassemia, who require regular transfusions, we look forward to closing out the year on a strong note having delivered on every key milestone and anticipate giving 2020 for guidance on <unk>.
<unk> launch metrics early next year.
Moving to Sky sooner, we have completed six patient starts activated <unk> and receive zero ultimate denials from government or commercial payers to date.
We remain on track with our guidance of five to 10 patient starts this year and anticipate giving 2024 patient start guidance early next year.
And in recognition of growing patient demand, we're seeing across the <unk> and Sky zone of launches. We recently signed an agreement with <unk> to enable increased manufacturing capacity.
Shifting to lower sell PREPA.
Preparations are well underway for launch in early 2024, and we are operationally ready to capitalize on our 18 month head start and gene therapy.
Against our nearest competitor.
Patients are waiting for this transformative therapy, we have consistently seen strong patient excitement and in market research that more than 70% of patients say they would consider gene therapy, if recommended by their doctor.
Demand is clearly there and continues to grow.
<unk> has been a trusted partner of the sickle cell patient community for over a decade, and we've recently expanded our team as part of an investment in patient education about gene therapy, which was in direct response to patient community feedback.
As mentioned, our Q Tc network, which is 100% synergistic between Integra and <unk> is rapidly scaling.
The network can be converted to include logos. So within weeks, a key competitive advantage and our intent is to reach an estimated 65% of sickle cell patients within 50 miles of our plant UTC and 95% within 200 miles of a plan to UTC.
Moving to access and reimbursement.
Particular focus has been on ensuring timely and equitable access to logos up at launch Blue Bird has long been a leader in value based payment models and low yourself for sickle cell is no exception. We are currently in late stage negotiations with a number of national payers on our innovative contracting approach.
These pending contracts represent a significant percentage of sickle cell covered lives.
The positive response were seeing in advance of our potential FDA approval underscores payers confidence in our offering and to recognize value of low yourself and gives us further confidence as we prepare to make gene therapy available for individuals living with sickle cell disease in early 2024.
And finally on manufacturing we are applying many learnings from <unk> to optimize commercial manufacturing from cell collection.
Through delivery of therapy back to the hospital.
We are excited about our potential load with cell approval next month, and we are well positioned to compete with.
We plan to share more details on launch plans at that time and with that I'll turn it over to Chris to talk through the financials.
Thanks, Tom and good morning, everyone.
As Tom mentioned to date, there have been 22 combined patient starts Chris <unk>. This translates over time to a potential $63 million in gross revenue.
In Q3, we reported $12 4 million in total revenue, primarily driven by product revenue from the <unk> zone again, underscoring that strong linear growth.
We remain on track with our full year 2023 cash burn guidance in the range of $270 million to $300 million and continue to prudently deploy capital to bring our therapies to our patients.
Additionally, last week, we announced that we've entered into an advanced agreement to sell a priority review voucher if granted for local sell for sickle cell disease for $103 million.
This would be an important source of non dilutive capital and has the potential to strengthen our financial position ahead of the anticipated launch of <unk>.
As of September 30, we had $227 million in cash cash equivalents restricted cash and marketable securities.
Not including the potential proceeds from the <unk> sale or the release of our $53 million in restricted cash we have a cash runway into Q2.
Of next year.
We plan to provide an updated cash runway guidance by early 2024 and continue to explore additional financing opportunities to further extend our cash runway and with that I'll turn it back over to Andrew.
Thanks, Chris and thanks, Tom to walk us through those updates it's an exciting time for Bluebird as we stay on six weeks out from our <unk> date, and our largest opportunity yet the potential to bring a gene therapy to individuals living with sickle cell disease in the U S.
Looking further out the horizon, we remain committed to our near term path to profitability and delivering on the promise of bringing a potentially curative gene therapies to patients and their families.
And with that we'd like to open it up for questions operator.
Ladies and gentlemen, if you have a question or comment at this time, Please press star one.
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If your question has been answered or you wish to remove yourself from the queue simply press star one again.
Please standby, while we compile the Q&A roster.
Our first question or comment comes from the line of Dane Leone from RJ asked Mr. <unk>. Your line is open.
Alright, thanks for taking the questions and congratulations on all the progress in moving towards that.
<unk> Hello to sell maybe a few questions for me.
Firstly could you just give us some color in terms of the patients that were actually infused and recognized as revenues.
In the quarter and what the remaining balances.
Ah patients I've had cell collections that you added.
I expect there.
And recognize revenue before your items.
Is there just a little bit more color on the general guidance for that.
The remainder of the year and then secondly could you provide us some.
Expectations around R&D burn as it relates to low sell.
Probably the biggest bucket of R&D burn on a quarterly basis does that expectation that after the approval.
The burn well maybe go down a bit.
Or is there still just obligations given the long term follow up required from the clinical studies. Thank you.
Great. Thanks, Dave So I think two questions in there.
Diffused in verse collected in guidance for rest of the year and R&D burden Hello change of Chris do you want to address those.
So let me start with the patients infused so we'll continue.
We're going to provide cumulative guidance on both some turbulence Gregg not individually.
Because we're just in the early stages of where we are and our commercial launch.
As you see we've infused.
We have 22 patient starts in both in both products.
And this translates again to about $63 million in gross revenue and that will come in over time again.
Our kpis for the company is patient starts.
And then as it relates to your question on what has been deferred.
And.
Patient revenue that's been deferred it's about $8 $5 million thats sitting on our balance sheet.
And then can you repeat your question two and three R&D I believe yes.
Yes, so thank you for that.
On that subject.
Then correct interpretation of what you just said is there is $8 5 million of.
Deferred revenue recognition that would still occur before year end and would there be incremental revenue recognition beyond that deferred amount.
And then secondly on R&D I was just commenting that.
In the Q. There is I think there is somewhere around $17 million to $18 million of R&D burn so associated on a quarterly basis with Louis L.
Is that expected to.
Go lower as we head into 2024 post the approval of the drug or are there still substantial remaining commitments for long term follow up from the clinical studies.
Yes, So let me take that so as it relates to R&D. The predominance of the R&D spend in the quarter contributes to lower sell in level sell spend because their products unapproved Theres also R&D spend that sits in the R&D line for both <unk> and Skype Zona and Thats attributable to our long term follow up.
And then any ongoing clinical work associated with the programs that we've got today.
As it relates to 2024 and beyond certainly as if and when <unk> gets approved the R&D expense will go down and Youll see those costs coming through either in Cogs or inventory and no longer in R&D. However, there will likely be long term follow up and up optional pay.
Registry cost for all three programs.
Thank you Chris.
Thank you. Our next question or comment comes from the line of Jason <unk> from Bank of America Securities. Mr. <unk>. Your line is now open.
Thanks, guys for taking my questions. So.
When you're launching lower so just wanted to understand a little bit more of the dynamics with.
The Medicaid reimbursement and how you expect that to phase in.
How long would that roughly taken absent Medicaid policies in place at key states.
Would you just expect revenue recognition to be deferred.
So just if you could speak to those dynamics and then.
I appreciate the comment about sort of the 70% of patients.
More interested but do you expect there to be an early bolus of sickle cell patients that.
Our pent up and when we think about the early launch just curious if you can speak to that dynamic.
Yeah, Thanks, Jason and good morning, I'm going to hand that to Tom to respond.
Yes, good morning, Jason Let me start with the last question first we would expect that the launch of lowest cell would look like other gene therapies, specifically would look like this integral launch in that we expect strong linear growth. We believe that there is a bolus of patient excitement in patient demand, but as we've seen it just takes time to get patients through the <unk>.
Through the process of getting gene therapy.
And then on top of that the Q Tcs qualified treatment centers are a very be working through the reimbursement process upfront. So.
Although we believe there is a bolus of excitement and bolus of patients that are eager for gene therapy, we would expect it to be.
Strong linear growth like we've seen with integra it'll be a much higher scale given that there is a much larger patient population and that we already have qualified treatment centers in place.
But we don't expect a bolus like a traditional oncology launch as far as the Medicaid dynamic about 50%, we're estimating of patients who have sickle cell disease are covered by Medicaid.
Put an outcomes based agreements in place and are working with both commercial payers and Medicaid payers right now to get the outcomes based agreement in place hopefully as soon as soon as possible and as close to launches possible clearly patients who have Medicaid might take a little bit more time than a patient with commercial.
Coverage, but if you reflect back on the Integra launch we've seen no denials, either with commercial payers or with Medicaid payers. So the early patients will go through the medical exception process and we would expect a fair and equitable coverage for patients both in commercial payers and Medicaid.
If I could just squeeze a follow up and with some <unk>.
Patients on Medicaid getting coverage through medical exceptions before an official policy that was in place.
Yes, Thats correct okay.
Early in launch there right now we have I believe it's 17 states have coverage policies Medicaid coverage policies. We now have the two outcomes based agreements with Massachusetts in Michigan, We have a third that's really close.
But early on patients, we're going through and getting approved through the medical exception process and we would expect the same to be true for loading so great.
Alright, thanks, guys.
Great. Thanks, Jason.
Thank you. Our next question or comment comes from the line of Eric Joseph from Jpmorgan. Mr. Joseph Your line is now open.
Great. Good morning, Thanks for taking the question.
I guess, just thinking about where we are helping us frame expectations for a little bit launch curve next year can you just talk a bit about sort of the.
Capacity at qualify or do you expect the capacity of qualified treatment centers in terms of.
Bed capacity.
That reserve for patients looking to have a good treatment and then from a sort of pricing and reimbursement.
Perspective.
Just looking for a little more color on these outcomes based agreements.
What outcomes in particular are going to be.
Tract for success, and then sort of.
Where.
They are.
I guess.
A negative outcome sort of might get reflected.
Ultimately.
On the top line.
Whether that's in the form of a of a sort.
<unk>.
Repayments or.
Ultimately, they're kind of looking at protracted.
Revenue recognition pattern. Thank you.
So with the three questions number one bed capacity at hospitals number two what kind of metrics you guys measure outcomes based agreements. If there is one for <unk> and then number three if thats. The case, how that gets reflected in the financials. So let me handle the first two to Tom and then that third request.
Yes, hi, good morning, Eric.
Capacity at ballpark treatment centers has not been an issue and we don't anticipate it being an issue going forward part of that is many of these hospitals are built out huge cell and gene therapy.
Things in big capabilities.
Also because our diseases are not acute.
Hospitals and patients have the luxury and have the convenience of being able to schedule around life events and schedule around busier times are less busy times with the hospital. So so far we have not seen capacity at <unk> an issue.
Number two you asked a little bit about price and then outcomes based agreements. Obviously those go hand in hand, we will be talking more about price as we get closer to launch.
Outcomes based agreements I am not going to give the specific endpoint right now for competitive reasons, but we did take into consideration obviously, a different disease state with sickle cell disease different primary endpoints and then a higher Medicaid population and what I will say is that we have received very positive feedback from payers in fact.
We're close right now to signing with a few large national payers are at Athens based agreement, which we feel reflects.
Deposit, how it's being received and the positive momentum that we have.
Great Eric.
And then just capping off on that the way that we will recognize revenue and constrained the revenue associated with any of the rebates that we will offer as we effectively estimate the number of patients that are coming through that particular class of trade and then constrained the revenue commensurate with the rebates that are being offered particularly like in Medicaid off you're constrained by 'twenty three.
1%, if that's the statutory rate for that particular product remembers case on a $17. One so wed estimate that and then as it relates to the amount of estimated revenue coming through the outcomes based agreement we take a conservative approach here because of the accounting standards require us to ensure there is no significant reversal of revenue so well.
Estimate the outcomes based agreement the number of patients coming through that in conjunction with Tom's market analysis, and then we will constrain the revenue accordingly, and periodically look at.
Markers associated with that outcome based agreements and released to revenue accordingly.
Based on the contract terms.
Okay, Great I appreciate the color.
Thanks for taking the questions.
Thank you. Our next question or comment comes from the line of Jack Allen from Baird. Mr. Allen. Your line is now open.
Great. Thanks for taking the questions and congratulations to the team on the progress.
A lot of discussion about the commercial dynamics around Picasso and rightfully so.
One of the questions I had was how are you looking to leverage our long term follow up as you look at commercializing medication.
Do you have any thoughts on the ability to get that into the label and how you see that shaping up.
Yes go ahead, Tom Yeah, Hey, Jack Good morning, obviously, as we've look back over the last many years in the market research and been out there in the <unk> recently the amount of long term data data that we have and the most robust package of any gene therapy in sickle cell disease is a big difference when you talk to a thought.
Peter you talked.
Describing physician both.
Either a referring community physician or a transplanted. So we obviously will continue to leverage the amount of long term follow up that we have and that will continue to be an advantage for us and I would just say a lot of times you see just a point in time efficacy in this particular case, we will get published and all of this long term follow up so it's a much more robust picture of the <unk>.
Overall profile of the product, which I think will be important and differentiating the product in the market.
Yeah.
Got it thanks question.
Yeah.
Thank you. Our next question or comment comes from the line of Gena Wang from Barclays. Mr. Wang Yu. Your line is open.
Yes, I think the sweet quick questions. The first question is regarding this quarter the product revenue $12 3 million could you give a little bit more color to breakdown will be guardians and tableau and this guy So no rescue and my second question is regarding the lungs.
Ma'am.
The manufacturing capacity.
So what is how much increase man that is and what is the expanded capacity.
So if a patient numbers and the lastly regarding the outcome based Medicare all companies focus on <unk> just wanted to ask.
A clarification for the revenue recognized or at least.
Also.
Proactively track taking into account the possible.
<unk> seemed like a 10% discount for your revenue recognition.
Okay, Great I will let me take the first bit of that which is about lines and then I'll hand, the second bit.
Chris.
Christopher the breakdown and then what I'd ask you did as you know once we get through those two if you can repeat your last question is I'm not sure we got it but.
Regarding the lines Amendment, we are not providing manufacturing forecasts. Our plan has always been to scale up commensurate with demand and we initiated this process in Q1, where we're pleased to have completed this agreement as we see encouraging demand for integrity. So it's really just part of our plan and then Chris do you want to talk about that.
Quarterly revenue.
Dana Thanks for the question and look we're not reporting infusion numbers, but you can see that patients are completing and moving through the process, which effectively them is translating to cash collections of reinforcing our balance sheet.
As a reminder.
We have had 22 patient starts which effectively represents approximately $63 million in gross revenue. So you can see that it's strong linear growth as we've described and that will continue.
And then can you do me a favor and repeat your question on the outcomes based agreement I'm sure yesterday I'm sorry, yes. So I think that you lay out very clearly like Medicaid 23, 1% and 17, 1%.
Discount when you recognize but there is undoubtedly assay outcome based <unk> tractor fleet.
Our pre book see like the U S.
Maybe 90% success, all 10% will be slightly will you proactively putting that 10% discount on top of say 23 line of $17. One when you recognize the revenue.
Yes, so I'll start here and of course, Tom and I will complement this I think it's a mutual question.
So what we do is we look at how the patients will flow through to a particular channel which to rich rebate. They qualified for and then we make estimates based on that I think Tom throughout an estimate earlier on how many patients work in market research on <unk>.
What I'll call professional expertise estimates the number of patients that will come through the outcomes based rebid or would qualify for an outcomes rates rebates.
Then whittle down the population in that regard and then what we do is we evaluate.
The patient coming through that outcomes based agreement the duration of time that patient enters in and kind of hits, a particular marker and then we constrained the revenue associated with that particular patient rebates in that case.
Each quarter. We will then look at that outcomes based agreement rebate and that patient and we'll follow that patients through.
Using not only of the clinical trial information as it's informed our our outcomes based agreement, but actually the patient's health et cetera. So it's a very collective effort that we look at it and make estimates on that outcomes based agreements, we will never be in a situation where we recognize revenue ahead, we will for conservative purposes, we will.
The revenue.
And then what we'll do is we'll release the revenue when that particular endpoint is met.
And maybe hygiene. This is Tom maybe just to add to that four is integral to keep in mind that based on claims data historically about 70% to 75% of patients are covered through commercial insurance.
And the remainder covered through Medicaid so even in the states, where we announced this morning that we have an outcomes based agreement we would still expect to the majority of the patients to be covered through commercial payers.
Thank you.
Thank you. Our next question or comment comes from the line of Manny <unk> from Leerink. Your line is now open.
Okay.
Hoping you guys can help provide a little bit of quantitative clarity around operating leverage.
So presuming.
Sure.
The approval comes through as expected and presuming that we see the linearity the linear growth that we're expecting as well so you've got a couple of different products launching growing compounding linearly.
How should we think about.
Potential improvement in gross margin profile should we expect gross margin to be relatively flat until there's some prescribed level of absolute scale.
And if that's true how should we think about that scale as a proportion of the market at the absolute number of patients.
Is there some threshold in terms of absolute amount of revenue.
You would think that that operating leverage starts to kick in and Martin improves how should we think about that.
Yes, so maybe I'm going to answer that qualitatively.
Chris So we're not going to give you the how many patients do we need or anything like that to go profitable but.
Once you get to a path to maintain.
<unk> maintains a robust positive gross margin, but sickle cell is different from beta thalassemia and Skype Zona in two ways number one is the patient numbers are higher so youre starting at a higher base in March UTC is just as you guys started a higher base right away and grow from there. So linear growth takes off from a different start point number one.
Number two we switch vectors. So we have a much more efficient vector production.
System for <unk>, which will mean that lower sell in is significantly better gross margin.
<unk> and <unk>, which are rare.
Relatively.
Rare indications and therefore doesn't require that metric change. So there is two things working in favor of Lois out for improving markets.
What's been driving it Christie do you want to add is that the other things I'll add there RMB the operating leverage that we see in the business certainly we have a level of fixed costs in the business and those fixed costs are commensurate with our ability to continue to reserve our capacity against and pace our capacity commensurate with our sales and then the improvement in our margin.
<unk> is really driven by volume.
And manufacturing production yields and those two things will really drive our company from the margins that you see today to effectively the margins that we believe are attainable, which are a minimum of 70%.
Thank you.
Okay.
Okay, a quick follow up.
Now talking about the scaling in terms of gross margin and I understand why you guys answer that qualitatively.
We're through down the income statement a little bit.
How should we think about potential expansion on the SG&A line.
Well with how it grows over time, we do a fairly stable skilled sales force in the U S should we expect the salesforce to expand reasonably linearly.
Function.
Should opportunities that should opportunities expand by number of UTC like how should we be modeling that.
I think Tom has historically described in other other forms and discussions that setting up Q Tcs is relatively low cost really principally focused on time and time commitment.
SG&A to answer your question spot on we will grow literally at the pace of revenue and we continue to kind of look at that we believe our infrastructure. Our commercial infrastructure is pretty well set up to achieve the opportunities that we have in front of us and that was part of what Tom and Andrew has described is leveraging our 18 month head start.
And that's what we've invested in.
So you should see SG&A pace with sales and we will continue to make investments in that regard, but they will pace with revenue.
Obviously it will.
<unk> revenue increases, but not necessarily the same percentage that's correct because we do have a lot of good leverage as a rare disease market. We're going after very targeted transplant centers. So the infrastructure that we need to dealt with most of it has already been built and what we are.
Adding to it to supplement tech versus actually adding wholesale cost.
Great. Thanks, guys.
Thank you. Our next question or comment comes from the line of <unk> Richter from Goldman Sachs. Mr. Richter. Your line is now open.
Good morning. This is Amit <unk>. Thank you for taking my question and congratulations on the progress.
I just have one question on manufacturing.
What issues have you seen to date with manufacturing and tableau.
There's been a hurdle to stock selection and.
Leading patients to date.
Just a follow up on the Q T.
Tcs that are being activated by the end of the year I guess, what proportion of the sickle cell patients <unk> is able to address.
Yes, so Tom let's just start with the <unk> question about how much they can address yes, hi. Good morning. So we designed our CTC network with the end goal being getting to the sickle cell community and our goal with the 40% to 50 <unk> that we plan to have on board by the end of this year was to be within 95% are reached.
95% of patients who have sickle cell disease within 200 miles of our plant to UTC.
We feel that we have excellent coverage for the sickle cell community, we will likely continue to expand <unk> into next year, because we wouldn't want a patient being unwilling to travel to be a barrier for treatment.
And regarding manufacturing so in our clinical trials, we did show that we had to be collections and manufacturing.
<unk> remains true on commercial and this is really just part of us.
Gene therapy specific, particularly gene therapy, where you're collecting stem cells not T cells is that critical differences with T cells, you can expand them or we expand them with sickle cells with foresight with stem cells. Your only option is to collaborate with one mobilization agent to do it. So we do see our chew in the case of days outstanding of one in the case of cycles.
So we do see the collections for various reasons and we uphold the highest quality standards for manufacturing so that means a positive steps in the process that needs to be repeated but I think this is going to be a very normal dynamics across all of the August stem cell gene therapies.
Got it thank you.
Thank you.
Our next question or comment comes from the line of.
Eric Schmidt from Cantor Fitzgerald, Mr. Schmidt Your line is open.
Yes.
Taking my question, it's about <unk> manufacturing I think you have two different facilities that are supporting the manufacturing one for vector and one for drug product.
Maybe you could just confirm whether that's the case and comment as to whether these facilities have been approved to support any other existing commercial products or whether they have been already inspected by the FDA.
So in the last one I can't comment, whether they're inspected by FDA or not because we don't go back and forth with.
I'm just.
I didn't blow by blow with FDA answer actions, but you are correct. We do have two facilities make the vector in Belgium, with Thermo Fisher and we make the drug products in New Jersey with a company called <unk>. We are working with these companies for quite a long time now so I havent really established relationship no. Those are the ones have not gone through other FDA inspections, but arch.
<unk> has gone through two inspections in Europe.
They've gone through the back by inspection, we are one company they run through the Sky Sonars and Teva inspections. So this is our sixth time around so.
So we feel very confident in our process.
Thank you very much.
Thank you. Our next question or comment comes from the line of Jonathan <unk> from Wells Fargo.
Your line is open.
Our questions.
If I may I have three questions first.
Could you talk about weather.
Lola whether youre in a labeling discussion stage with FDA.
A quick question also on oversell.
It talks about this launch for all of Us know.
It's going to be at a higher scale at the starting point.
I think.
There are.
20000, severe sickle cell patients versus perhaps 2500.
PDT patients that's tenex in scale.
Or actually a little more than 10 X.
Is that how you see this launch as well or could there be some other factors like within mis.
Get treated that could affect that scale.
And lastly, a question on GDT launch.
Could you gave us some color on adult versus.
Pediatric patients so far thank you.
Yes. Thank you for the question so on the BLA, we don't comment on ongoing interactions with the agency. So we've submitted the lowest half of the treatment of patients with sickle cell disease is 12 and over the history of basal occlusive events and we are confident in the robustness and maturity of our BLA package and the review process.
Then the last next to him in the past or Tom I think there was a question about the.
Sickle is tenex Dallas should be expecting to see that dynamic.
Play out in the market and then the and then the third is that TVT adult versus pediatrics.
Yes, hi, good morning.
<unk> cel, obviously, a much larger opportunity and just to remind everyone. There are about 100000 patients in the United States, who have sickle cell disease, and we believe that there are about 20000, who have more severe sickle cell disease that could potentially be qualifying for gene therapy with beta thalassemia TVT either about 1500 patients.
In the United States, and we're estimating that about 850 of those 500 would be potentially eligible for gene therapy. So it's actually a.
Greater than 20 times the market side. So it's obviously a much larger patient population addressable patient population and then.
It's hard to comment on individual dynamics with patients coming in for treatment with date with for the beta thalassemia was intaglio and Thats, because we havent seen a huge and yet but we've seen just such a huge range. We have both adult and pediatric centers online now we've seen a lot of patients going forward that.
Obviously meet the criteria and we've seen a lot of different story. So it's hard to say that there is a common theme there, but we're just excited that the demand is there and the demand is there from a wide range of patients.
Thank you. Our next question or comment comes from the line of Luca <unk> from RBC capital.
Your line is now open.
So much for taking my questions. Two quick one here maybe for some pricing I believe your producer days 12 days after your competitor, which means you'll have an opportunity to see their pricing before you make the final call is there a scenario where you price the drug in a discount versus them to gain faster commercial adoption or should we assume.
As you are priced on par with Dan any color there much appreciate it and then maybe on safety.
Based on the two patients that develop AML and the trial for some of these wondering if you could comment on how they are doing today and maybe bigger picture, whether there is a scenario where you get a label that includes risk of secondary malignancies. While your competitor does not any destiny or how should we think about implications for the launch thanks.
So much.
Thanks for the question.
I'll take the first fit Sir hi, good morning Luca.
We're going to run the same process on our <unk>.
Price for low sulfur that we ran was integral in sky soda, obviously different dynamics in sickle cell disease, but we'll take into.
Into consideration and clinical benefit of quality of life improvements cost saving system impact to society, just like we do with.
Our other therapies, obviously a onetime.
Potentially curative therapy in a chronic condition. Many many youre seeing the values recognized by payers is recognized recently by ICR. So clearly the models are out there we won't comment on our competitors' pricing. We don't obviously have any privy to that we believe that we are leaders in establishing value and setting price for.
These therapies and we will continue to price the way that we price.
And then looked at just on the safety.
As a reminder, there have been no cases been searched on to Genesis with low yourself. However, there have been cases of cancer related to the transplant procedure.
All of them will oversell and unfortunately, two of those patients in our early clinical trials, where we our procedures work.
In the earlier phase of generation, one procedure says the group a.
Did develop leukemia AML in those two patients did pass away. So although they are not those two patients are not in our efficacy data set.
There it is likely that we will have I mentioned that the safety events in the label and what.
Part of the label aware is yet to be.
Determined, but certainly they will be and that is something that we've known for quite a while.
Again, I think a really important point is with no cases have been social oncogenesis. This is these are our cases that were related to the procedure.
Got it thanks, so much frightful.
Thank you. Our next question or comment comes from the line of Sami Corwin from William Blair. Mr. <unk>. Your line is now open.
Hi, there. Thanks for taking my question I was curious is there any incremental costs or opening new ptc's.
And then thinking about here commercial manufacturing time for low with cell how should we be thinking about that will likely be closer to the deterioration in manufacturing touch produced integrity or will be closer to Skype sooner and then across all three products.
Take that it's possible to increase efficiency and decrease that manufacturing time and the long term.
Okay first of all I'll take the second two top yeah sure. So we've done a lot of ROI analysis on our <unk> network and the only cost is really just the time and the head count to get them qualified treatment centers up and running so.
Roy analysis, if they just treat one patient over the course of two years, then that's a very profitable endeavor for us so we.
We will likely continue to expand our qualified treatment center network beyond the 40% to 50 that we said we would do this year.
Not hardly any incremental cost at all.
And then.
On the commercial type of release, Lois Hill will be closer to.
<unk> then it will be two <unk>.
Because these tests are relatively similar.
Those products and that's what drives timeline I.
I will say just in terms of your question about timelines overall.
The biggest impact timeline will be how many times you have to collect cells from the patients right.
And that's going be the biggest driver timelines that we do anticipate bringing that down nicely over time with agreement robust process that allows us to do that.
And then the second considerations as to how long this with these tests take some of those are the these testers as long lead time that to incubate, so you're never going to get down get below a certain threshold, but you can imagine some time being taken out of that that does lead times.
Great. Thank you.
Thank you our next question or comment comes from a line of Jeffrey.
Geoffrey <unk> from Morgan Stanley Mr. Hung your line is now open.
Hi, This is Michael Rehaut answer Jeff home. Thank you for taking my question.
On the outcomes based agreement, specifically affirms intaglio with Michigan in Massachusetts, maybe indicated.
Given that there then ultimate denials.
This is slowly becoming a formality or do the state agencies generally have uncertainties on outcomes and feel that they can benefit when the agreement I guess I just want to understand the rationale given that that's been done out today. Thanks, so much.
Go ahead, yes, hi, good morning.
We are seeing is that state Medicaid agencies, obviously recognize the value of onetime therapies in a disease state like beta thalassemia thats very costly to the system.
However, I think they also appreciate our outcomes based agreement, where we're saying if if a patient doesn't achieve transfusion independence and maintained transfusion independence than they should be rebated at least a percentage of the cost of the therapy that just gives them. The additional security that they're not paying for something that doesn't work. So it's an added assurance.
And in this case, we feel that it is.
Obviously, a testament to the values integrity and their willingness to work with us.
Yeah.
Okay. Thanks, so much that's really helpful.
Thank you.
I'm showing no additional questions in the queue at this time I would like to turn the conference back over to Mr. Andrew <unk> for any closing comments.
Great and thanks, everyone for joining our Q3 call. This morning and for your thoughtful questions. Its very exciting time for Bluebird and the patients that we aim to serve if you have any.
No questions I would like to set up a follow up call. Please reach out to Cory. Thank you.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.
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