Q3 2023 Apellis Pharmaceuticals Inc Earnings Call
Okay.
Good morning, ladies and gentlemen, thank you for standing by.
Welcome to the Palace Pharmaceuticals third quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.
I ask a question during the session you will need to press star one on your telephone you were down here in automatic message of buys and you'll hear this race.
Please note that today's conference is being recorded.
I will now hand, the conference I'll, let you speak of host Meredith Kaya Senior Vice question Investor Relations answers as you Finance. Please go ahead.
Yeah.
Good morning, and thank you for joining us to discuss third quarter 2023 financial results with me on the call our co founder and Chief Executive Officer, Dr. Cedric Francois Chief Commercial Officer, Adam Townsend.
Medical Officer, Dr. Caroline bomber, and Chief Financial Officer, Jim Sullivan.
Before we begin let me point out that we will be making forward looking statements that are based on our current expectations and beliefs.
Statements are subject to certain risks and uncertainties and actual results may differ materially I encourage you to consult the risk factors discussed in our SEC filings for additional detail now I'll turn the call over to Patrick.
Thank you Meredith and thank you all for joining us this morning.
Has been a busy few months here at our babies in the periods not without its share.
That said I am thrilled with where our company is today and then more confident than ever in the opportunities that we have in front of us.
Importantly, we are delivering on our goals of bringing impact very insightful.
With the $100 million until to the U S. Net product revenue generated in the third quarter and continuing to develop a pipeline potentially transformative new treatments.
I'll begin with faithfully.
Reported $75 million and set for the U S net product revenue in the third quarter.
About 12% quarter over quarter, resulting in more than $160 million U S. Net product revenue generated in the first seven months since launch.
A few key highlights include.
More than 100000 sales of sexual rehab been distributed since launch through our last update on October 5th which.
Which we believe underscores the positive impact it is having on the lives of thousands of patients across the U S.
The permanent J code became effective on October 1st driving even stronger demands to date with some of our largest weeks in October.
The long term data emerging from our Gale extension study continues to show increasing effects overtime.
Eminent feature of safety or efficacy profile.
As additional analyses have been presented this fall demonstrating the visual function benefits offsets co pays.
Patients.
And finally.
Estimated rates of retinal vasculitis with Petco greet continues to be rare at zero point zero percent.
Visual outcomes in these cases are really important.
And the rate of events that resulted in Ccs irreversible vision loss is substantially less than zero to 1%.
Given the continued stability in the rates we plan to continue to provide the estimated rate of events.
No longer discuss individual cases.
The success of states Tobey reinforces the unmet need the NGA and the strength of our product profile.
Faced unexpected challenges with the rare events of vasculitis emerging December.
But we have worked hard to build trust with the retina community through continued transparency and sharing the learnings from our investigation.
In doing so we have provided retina specialists with the information they need to make the right treatment decisions for their patients.
I had the privilege of spending time with some of our key opinion leaders. This fall at both your retina and retina Society.
It was encouraging to hear the discussions shifting back to what this product can do for patients.
After a challenging few months, we have turned the corner and believe we are now back to the demand growth trajectory that we were on in July.
Unknown Executive: Good morning, ladies and gentlemen, thank you for standing by. A welcome to the Pellis Pharmaceuticals 3rd quarter, 2023 earnings conference call. At this time, all participants analyze an only mouth.
Unknown Executive: After this biggest presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If you will down here in automatic message advising your hand is raised. Please note that today's conference is being recorded.
Globally, we are looking forward to the decision on our <unk>.
Submission for the European Medicines agency, which is on track for early 2024.
At your rest of that I was impressed with the incredible amount of work our European team has been doing to prepare for the launch.
Meredith Kaya: I will now hand a conference over to you speaker host, Meredith Kaya, Senior Vice-Grested Investulations and Suspicious Finance. Please go ahead. Good morning, and thank you for joining us to discuss the Pellis 3rd quarter, 2023 financial results. With me on the call, our co-founder and chief executive officer, Dr. Cedric Francois, chief commercial officer, Adam Townsend, chief medical officer, Dr. Caroline Baumal, and chief financial officer, Tim Sullivan. Before we begin, let me point out that we'll be making four looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results made different materially. I'm curious you to consult the risk factors discussed in our SEC filing for additional details.
There was also a lot of enthusiasm from the European physicians.
The possibility of finally, having a treatment for their patients.
Patients.
Turning to <unk>.
We generated $24 million in third quarter U S net product revenue and $67 million year to date.
With <unk>, we now have over 3500 patient years and compliance rates at 97% and still not a single case of Meningococcus infection.
One of the key highlights for <unk> during the quarter was receiving FDA approval for the <unk> injector and innovative and first of its kind hi, Jake.
Cedric Francois: Now, I'll turn the call over to Cedric. Thank you, Meredith, and thank you all for joining us this morning. It has been a busy few months here at Appiddies, and the periods not without its share of unknowns. That said, I am thrilled with where our company is today, and I'm more confident than ever in the opportunities that we have in front of us. Importantly, we are delivering on our goals of bringing Embatari and Saikovry to patients with nearly $100 million in total U.S, net product revenue generated in the third quarter and continuing to develop a pipeline of potentially transformative new treatments.
Volume injector.
With this approval we are further enhancing the patient experience by offering rates for mobility and simplified administration.
We also announced topline data from our phase II <unk> study with systemic Betsy that group and <unk>, which will be presented this Saturday.
The American Society of Nephrology.
Strength of these data is driven by the speed and magnitude of effect that actually that group had the kidney which is unprecedented in these diseases.
We believe that we have an opportunity to significantly expand the number of patients who are benefiting from Brexit that Copeland.
Cedric Francois: I'll begin with Saikovry. We reported $75 million in Saikovry U.S, net product revenue in the third quarter. Up about 12% quarter over quarter, resulting in more than $160 million in U.S, net product revenue generated in the first seven months since launch. A few distributed since launch through our last update on October 5th, which we believe underscores the positive impact it is having on the lives of thousands of patients across the U.S.
<unk> affects more than three times that treated <unk> population.
We look forward to the top line results from our phase III Valeant study expected in the third quarter of 2024.
Before I turn it over to Adam I would like to comment on our recent corporate restructuring.
In late August we took actions to streamline our organization prioritizing the growth of <unk> and positioning the company for continued long term success.
Was a difficult decision and we are grateful for the commitment and contributions of all of our colleagues.
Cedric Francois: The permanent J-code became effective on October 3rd, driving even stronger demands to date with some of our largest weeks ever in October. The long-term data emerging from our Gale extension study continues to show increasing effects over time. Seminole's feature of Saikovry's efficacy profile and additional analyses have been presented this fall demonstrating the visual function benefits of Saikovry in GA patients. And finally, the estimated rate of retinal vasculitis with Saikovry continues to be rare at 0.01%.
As a reminder, key elements of our re prioritization includes maximizing saiful global leadership in <unk>.
Yes.
Streamlining the impact any business focused on the commercialization of <unk> and development <unk> <unk>.
<unk> certain CNS and retina research initiatives and continuing our collaboration with <unk> and.
And finally, improving operational efficiencies.
We anticipate total cost savings of up to $300 million.
Through 2024 as a result of this restructuring and the stimulus speak to later, we expect our cash runway to now extend into at least the second quarter of 2020 sites.
Cedric Francois: Visual outcomes in these cases are really important. And the rate of events that resulted in GZR, irreversible vision loss is substantially less than 0.01%. Given the continuous stability in the rate, we plan to continue to provide the estimated rate of events, but will no longer discuss individual cases. The success of Scytholary reinforces the unmet need in GA and the strength of our product profile. We faced unexpected challenges with the rare events of asculitis emerging this summer, but we have worked hard to build trust with the retina community through continued transparency and shared training the learnings from our investigation.
As a more focused organization. We believe we are in a stronger position to create value for shareholders and deliver on our mission for patients now and into the future.
I will now turn it over to Adam to discuss our commercial activities.
Thank you Cedric it was a strong quarter commercially, but both SAIFI and <unk>.
<unk> web site.
In the third quarter, we delivered 37000 commercial trials and 10000 samples to physician practices genera.
Cedric Francois: In doing so, we have provided retina specialists with the information they need to make the right treatment decisions for their patients. I had the privilege of spending time with some of our key opinion leaders this fall at both U Retina and Retina Society. It was encouraging to hear the discussions shifting back to what this product can do for patients. After a challenging few months, we have turned the corner, and I believe we are now back to the demand growth trajectory that we were on in July.
<unk> generating $75 million.
<unk> net product revenue.
We are encouraged by the performance in particular the quarter over quarter growth compared to Q2 and the return of weekly demand growth beginning in August we.
We believe this was driven by physicians and patients having a better understanding of the real world safety profile of SIFI overeat.
And the long term data, including increasing treatment effects seen in our Gale extension study.
Cedric Francois: Globally, we are looking forward to the decision on our MAA submission for the European Medicines Agency, which is on track for early 2024. As you read that, I was impressed with the incredible amount of work our European team has been doing to prepare for the launch. There was also a lot of enthusiasm from the European Physicians about the possibility of finally having a treatment for their GA patients. Turning to MAA, we generated $24 million in third quarter US net product revenue and $67 million year to date.
On October the fast the permanent J code for <unk> became effective.
Find the billing and reimbursement process.
This is a significant milestone that will help ensure efficient reimbursement of SIFI.
Building on our goal of bringing this important treatment.
<unk> patients indeed.
As a result of our commercial execution excellent payer coverage with more than 95% of Medicare payers now covering <unk> Andy.
Cedric Francois: With the MAA, we now have over 1,300 patients years and compliance rates at 97% and still not a single case of meningococcal infection. One of the key highlights for MAA during the quarter was receiving FDA approval for the MAA injector, an innovative and first of its kind, high-tech volume injector. With this approval, we are further enhancing the patient's experience by offering raise-or-mobility and simplifying administration. We also announced top-line data from our phase 2 novel study with systemic infectious echo plan in ICMPG and HC3G, which will be presented this Saturday at the American Society of Nephrology.
And the addition of the permanent J code.
Demand is higher than where we were in July and growing.
We continue to see weekly orders coming from both new and existing sites of care.
With a double digit number of new sites of care ordering sites.
Every week since launch.
Additionally, we are seeing the vast majority of physicians treating patients with SIFI debris every six to eight weeks reinforcing how important dosing flexibility is for this patient population.
Cedric Francois: The strength of these data is driven by the speed and magnitude of effect that infectious echo plan had in the kidneys, which is unprecedented in these diseases. We believe that we have an opportunity to significantly expand the number of patients who are benefiting from infectious echo plan. ICMPG and HC3G affect more than three times the treated P&H population.
Our commercial strategy going forward is to remain laser focused on engaging our key stakeholders patient physician and payments.
We plan to leverage the current momentum by building breadth depth and retention among specialists.
We are also preparing to bring <unk> to patients globally.
We are thoughtfully building out the European commercial infrastructure and subject to approval plans to launch initially in Germany, where we can sell product immediately while we work simultaneously to obtain reimbursement in other EU countries.
Cedric Francois: We look forward to the top-line results from our phase 3 Valium Study, expected in the third quarter of 2024.
Europe represents a significant opportunity for us as there are more than $2 5 million people living with Gi and no treatment available.
Cedric Francois: Before I turn it over to Adam, I would like to comment on our recent corporate re-structuring. In late August, we took actions to streamline our organization, prioritizing the growth of cyclore and MAA, and positioning the company for continued long-term success. This was a difficult decision and we are grateful for the commitment and contributions of all of our colleagues. As a reminder, key elements of our re-prioritization include, Maximizing Psychotherapies Global Leadership in GA, Streamlining the Empathetic Business, focused on the commercialization and PNH and development in ICMP-GMT-3G, prioritizing certain TNS and Retina Research Initiative.
We recently submitted our dossier to the National Institute for Health and excellence or nice for reimbursement in the United Kingdom.
We expect a decision by the local regulatory authorities in the U K as well as Canada, Australia, and Switzerland in the first half of 2024.
Turning to <unk> in the third quarter, we continued to see positive trends across the key leading indicators for this patient population.
Including more than 250 patients on therapy.
Over 75% of C five inhibitor patient switches.
Coming from Altamira since launch.
Cedric Francois: And continuing our collaboration with BIM and finally improving operational efficiencies. We anticipate total cost savings of up to $300 million through 2024 as a result of this re-structuring and as Tim will speak to later, we expect our cash runway to now extend into at least the second quarter of 2025. As a more focused organization, we believe we are in a stronger position to create value for shareholders and deliver on our mission for patients now and in the future.
Patient compliance rates remaining high at 97%.
And continued strong access among the top 20 payers.
We are also seeing continued growth coming from the treatment naive population given the inclusion of the <unk> data in the label and more experience with them properly.
This program resulted in $24 million in U S net product revenue for the third quarter.
<unk> is a market driven by both efficacy and safety, which is reflected in these continued strong results.
As Patrick mentioned, we are excited about the approval of the MSR value injector.
Adam Townsend: With that, I will now turn it over to Adam to discuss our commercial activities. Thank you, Cedric. It was a strong quarter commercially for both Cyphery and Empivelli, starting with Cyphery. In the third quarter, we delivered 37,000 commercial files and 10,000 samples to physician practices, generating $75 million in US net product revenue. We are encouraged by this performance. In particular, the quarter of a quarter growth compared to Q2 and the return of weekly demand growth beginning in August. We believe this was driven by physicians and patients having a better understanding of the real world safety profile of Cyphery and the long term data, including increasing treatment effects seen in our Gail Extension study.
The field teams are now working to transition existing patients on to the injector.
Initial feedback has been positive and we look forward to bringing the injected to more and more patients over the coming months.
We are also focused on bringing <unk> to new patients who may benefit from this treatment and reinforcing that the long term safety and efficacy data and real world experience.
Now I will turn the call over to Carolyn.
Thanks, Adam and good morning, everyone. We have had a significant presence. These past few months at multiple medical meetings, including the ASR at the annual meeting.
Retina and the retina Society meeting.
Reaction and feedback we are hearing from the medical community, especially in these last several weeks support the solid performance of Tysabri and its continued growth.
Adam Townsend: On October 1st, the permanent Jacob to Cyphery became effective, simplifying the billing and reimbursement process. This is a significant milestone that will help ensure efficient reimbursement of Cyphery, building on our goal of bringing this important treatment to all GA patients in need. As a result of our commercial execution, excellent pair coverage with more than 95% of Medicare payers now covering Cyphery and the addition of the permanent J code demand is higher than where we were in July and growing.
As shown on slide eight and Srs, we presented for the first time. The 30 month result of our Gale extension study deepening.
Deepening our understanding of the long term efficacy of <unk>.
These data continue to demonstrate increasing effect with factory output 30 months.
The safety profile consistent with previously reported clinical data.
Gal.
Ricky.
Leasing growth with both monthly and every other month treatment compared to the projected sham arm with an even more pronounced effect in patients with non symposia lesions.
Adam Townsend: We continue to see weekly orders coming from both new and existing sites of care, with a double digit number of new sites of care ordering Cyphery every week since launch. Additionally, we are seeing the vast majority of physicians treating patients with Cyphery every six to eight weeks, reinforcing how important those in flexibility is for this patient population.
The greatest effect shown by any gea therapy could take.
Additionally, we continue to build on the functional data supporting efficacy profile of <unk>.
We recently presented our third functional analysis, showing a visual function benefit.
Adam Townsend: Our commercial strategy going forward is to remain laser focused on engaging our key stakeholders, patients, physicians and patients. We plan to leverage this current momentum by building breadth, depth and retention among retro-der specialists. We are also preparing to bring psychoveries to patients globally. We are thoughtfully building out the European commercial infrastructure and subject to approval, plan to launch initially in Germany where we can sell products immediately while we work simultaneously to obtain reimbursement in other EU countries.
In this post hoc micro Perimetry analysis data showed that say foundry extended phobia light sensitivity and the phase III <unk> study, which is critical for prolonging visual function.
We also presented an updated covariate adjusted analysis of visual acuity data at the retina Society from our Gale long term extension study.
As we saw with the 24 month data at ARVO, we continue to see favorable trends on best corrected visual acuity in patients and the continuous faithful re treatment arms as compared to patients on sham for two years, who then crossed over to active treatment and Gail.
Adam Townsend: Europe represents a significant opportunity for us as there are more than 2.5 million people living with GA and no treatment available. We recently submitted our dossier to the National Institute for Health and Care Excellence or NICE for reimbursement in the United Kingdom. We expected decision by the local regulatory authorities in the UK, as well as Canada, Australia and Switzerland in the first half of 2024. Turning to Amber Valley, in the third quarter, we continue to see positive trends across the key leading indicators for this patient population, including more than 250 patients on therapy, over 75% of C5 inhibitor patient switches coming from Ultramiris since launch.
Both of these analysis add to the overall efficacy profile of <unk>.
We are looking forward to presenting at the upcoming American Academy of Ophthalmology meeting this weekend in San Francisco.
At this meeting we will share a 36 month data from our Gale extension study further demonstrating <unk> long term efficacy and increased effects overtime and a consistent safety profile out to three years.
As seen on slide nine we are also presenting new data. This weekend at kidney week from the phase two Nobel study investigating <unk> for the treatment of post transplant recurrence of IC MTG N and CTG.
Adam Townsend: Patient compliance rates remaining high at 97% and continued strong access among the top 20 payers. We are also seeing continued growth coming from the treatment NICE populations, given the inclusion of the Prince data in the label and more experience with Amber Valley. This progress resulted in $24 million in US net product revenue for the third quarter. PNH is a market driven by both efficacy and safety, which is reflected in these continued strong results.
IC MTG M and <unk>, a rare debilitating kidney diseases that are estimated to affect 5000 people in the United States and up to 8000 in Europe with no approved treatments available.
What is particularly striking in these data are shared in our recent press release is how quickly <unk> Copeland showed the potential for a treatment effect in transplanted kidneys that had disease recurrence.
In just 12 week, 80% of patients treated with peg set of Copeland showed a reduction in CTC staining by at least one order of magnitude of intensity from baseline.
Adam Townsend: As Tetrick mentioned, we are excited about the approval of the Amber Valley injector. The field teams are now working to transition existing patients onto the injector. Initial feedback has been positive, and we look forward to bringing the injector to more and more patients over the coming months. We are also focusing on bringing Amber Valley to new patients who may benefit from this treatment and reinforcing the long-term safety and efficacy data and real-world experience.
50% showed a reduction in <unk> staining by two or more orders of magnitude, which was the primary endpoint of the study.
And 40% showed zero staining intensity, indicating that <unk> see deposits were cleared.
The image on this slide is an example of one patient you can see the disease activity or <unk>, gaining a baseline on the left with the immuno fluorescence or bright green areas lay up.
Caroline Baumal: Now, I will turn the call over to Carolyn. Thanks, Adams, and good morning, everyone. We have had a significant presence these past few months at multiple medical meetings, including the ASRS annual meeting, your retina, and the retina society meeting. The reactions and feedback we are hearing from the medical community, especially in these last several weeks, support the solid performance of psychovery and its continued growth.
At week 12, you can see in the second image that it's gone.
This magnitude of <unk> clearing in the kidney has never been shown before.
Additionally, chemo with peg set of Copeland showed improvement across key clinical measures, including proteinuria and stable kidney function.
While this was a small study these data indicate that <unk> Copeland is targeting the underlying cause of disease.
Caroline Baumal: As shown on slide 8 at ASRS, we presented for the first time the 30 month results of our Gail Extension study, deepening our understanding of the long-term efficacy of psychovery. These data continue to demonstrate increasing effects with psychoveries out to 30 months, and a safety profile consistent with previously reported clinical data. In Yal, the latest effect shown by NEGA therapy to date. Additionally, we continue to build on the functional data supporting the efficacy profile of psychoveries.
Our confidence in peg set of Copeland as a potential treatment for both native and post transplant forms of these rare and serious diseases.
We are currently enrolling patients in our phase III Valeant study evaluating <unk> Copeland and adolescent and adult patients with Natus and post transplant recurrent IC and PGN <unk> <unk>.
Investigators in this study have been enthusiastic about bringing in new patients.
We anticipate completing enrollment by the end of this year with topline results expected in the third quarter of 2024.
Now I will turn the call over to Tim for a review of the financials Tim.
Thank you Caroline.
Caroline Baumal: We recently presented our third functional analysis showing a visual function benefit. In this post-talk micro-permitry analysis, data showed that psychoverry extended folial light sensitivity in the Phase III oak study, which is critical for prolonging visual function. We also presented an updated co-variant adjusted analysis of visual acuity data at the Retina Society from our Dale Long-Term Extension study. As we saw with the 24-month data at ARVO, we continue to see favorable trends on best corrected visual acuity in patients in the continuous psychoverry treatment arms as compared to patients on sham for two years, who then crossed over to active treatment in Gail. Both of these analysis add to the overall efficacy profile of peg-sidocopula.
Total revenue for the third quarter was $110 million, which consisted of $24 million in <unk> U S. Net product revenue $75 million inside brewery U S net product revenue and $11 million in collaboration revenue from soybeans.
As a reminder, revenue is recognized as shipments to the distributor and therefore includes any product in inventory at the distributor as well as product shipped to the physician private distributor. We continue to estimate approximately two to three weeks of inventory on hand at the distributor.
These inventory levels to be consistent going forward based on anticipated demand.
Turning to the rest of the P&L R&D expenses were 79 million and G&A expenses were $146 million and we reported a net loss of $140 million.
I'd like to point out a few items in our financial statements that will help in evaluating our business.
First cost of goods sold was $22 4 million for the third quarter higher than in previous periods due to milestone payments and purchase price variances combined totaling approximately $8 6 million.
Caroline Baumal: We are looking forward to presenting at the upcoming American Academy of Ophthalmology meeting this weekend in San Francisco. At this meeting, we will share 36-month data from our Gail Extension study. Further demonstrating psychoveries long-term efficacy and increased effects over time and a consistent safety profile out to three years.
<unk>.
We recorded accounts receivable of $169 3 million, which is also higher than previous quarters and is primarily associated with payment terms that we provide to the sites will be distributors.
The accounts receivable line item as increases for re sales have increased and is in line with those payment terms.
Caroline Baumal: As seen on slide 9, we are also presenting new data this weekend at Kidney Week from the Phase II Noble Study, investigating peg-sidocopula for the treatment of post-transplant recurrence of ICMPGN and C3G. ICMPGN and C3G are rare, debilitating kidney diseases that are estimated to affect 5,000 people in the United States and up to 8,000 in Europe with no approved treatments available. What is particularly striking in these data as shared in our recent press release is how quickly peg-sidocopula showed the potential for a treatment effect in transplanted kidneys that had disease recurrence.
Third we are now categorized in a majority of medical affairs and certain other costs and G&A instead of an R&D.
Represents an approximately $19 million shift from R&D to G&A in the current quarter.
No reclassifications were necessary for prior periods. However, it is important to note when reviewing trends in our operating expenses.
And finally, our operating expenses do not yet reflect the ongoing efficiencies, we expect from our restructuring due to severance and winding down of certain projects. We expect to realize these efficiencies beginning in 2024.
As of September 32023, we had $452 million in cash and cash equivalents September.
In October demand provided us with a better view of the demand and sales trajectory going forward based on this and cost savings from our recent restructuring we now expect our cash balance to fund our operations into at least the second quarter of 2025.
Caroline Baumal: In just 12 weeks, 80% of patients treated with peg-sidocopula showed a reduction in C3C staining by at least one order of magnitude of intensity from baseline. 50% showed a reduction in C3C staining by two or more orders of magnitude, which was the primary endpoint of the study, and 40% showed zero staining intensity, indicating that C3C deposits were cleared. The image on this slide is an example of one patient. You can see the disease activity or C3C staining at baseline on the left with the immunofluorescence or bright green areas lit up.
I will now turn the call back over to Cedric for closing remarks Cedric.
Thanks, Tim.
Caroline Baumal: At week 12, you can see in the second image that it's gone. This magnitude of C3C clearing in the kidney has never been shown before. Additionally, treatment with pegs at a coplanche showed improvements across key clinical measures, including progenuria and stable kidney function. While this was a small study, these data indicate that pegs at a coplanche is targeting the underlying cause of the disease. Strengthening our confidence in pegs at a coplanche as a potential treatment for both native and post transplant forms of these rare and serious diseases.
This quarter was not without challenges, but we are now seeing a clear rebound in the growth and progress we accomplished earlier this year.
On the cost or the spending starts we'll be speech and global markets alongside steady growth in the <unk> market.
We remain dedicated to delivering on our strategic priorities and creating long term shareholder value.
So there is no open the call for questions operator.
Certainly ladies and gentlemen to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question you May Press Star one again, please standby, while we compile the Q&A roster.
And our first question coming from the line of.
<unk> <unk> with Evercore Your line is open.
Hi, guys. This is John Miller on.
Maybe now that you've had some more commercial experience through through all of the speculator stuff can you maybe update our assumptions on the difference between vials shipped and doses given what proportion of doses are sitting in fridges at various places in your estimation and then secondly.
Caroline Baumal: We are currently enrolling patients in our phase three valiant study evaluating pegs at a coplanche in adolescent and adult patients with native and post transplant recurrence ICMPGN and C3G. Investigators in this study have been enthusiastic about bringing in new patients.
Maybe on the etiology of Vasculitis do you have any early signs out of the needle switch at this point is that really making an impact in the rate.
Or are there any suggestions of a patient risk profile that might identify basically ahead of time as there had been any motion on that front.
Caroline Baumal: We anticipate completing enrollment by the end of this year with top line results expected in the third quarter of 2024.
Great to hear you I'm going to have the first question over to Adam and then I'll take the second one hey, John So.
Firstly, a sense I think we're extremely.
Timothy Sullivan: Now I will turn the call over to Tim for a review of the financial. Tim? Thank you, Caroline. Total revenue for the third quarter was 110 million, which consisted of 24 million in the Valley U.S, net product revenue, 75 million in cypher U.S, net product revenue, and 11 million in collaboration revenue from SOBI. As a reminder, revenue is recognized as shipment to the distributor and therefore includes any product in inventory at the distributor as well as product shipped to the physician by the distributor. We continue to estimate approximately two to three weeks of inventory on hand at the distributor and expect these inventory levels to be consistent going forward based on anticipated demand.
Extremely confident I am pleased with the commercial execution.
Let me give you a few numbers. So obviously 37000 commercial vials in the third quarter at about 10000 installed tools.
All of these vials shipped to physicians and we assumed based on our math on average of about one to one and a half weeks of demand file sitting in a refrigerator. So.
We think we have over 100000 injections since launch about 50000 patients being treated with <unk> I.
I think it's a really strong commercial execution, so hopefully that answers your question.
And back to et cetera for the second part. Thank you Adam and then talking about etiology. So it is still too early rates I mean.
Timothy Sullivan: Turning to the rest of the P&L R&D expenses were 79 million and G&A expenses were 146 million and we reported the net loss of 140 million. I'd like to point out a few items in our financial statements that will help in evaluating our business. First, cost of goods sold was 22.4 million for the third quarter, higher than previous periods due to milestone payments to pen and purchase price variances combined totaling approximately 8.6 million.
We're going to need probably another quarter or two to really understand whether the needle had an impact or not that's the most important metric here is that the rate of vasculitis is very low and stable rather than its something thats over the past couple of months, we've been able to track and of course it provides confidence to the physicians.
So with more than 100 injections done in the real World. We are at a rate and continues to be at a rate was 0.0% to 1%, but it's of course also of importance to look into which patients have significance in <unk>.
Timothy Sullivan: Second, we recorded accounts receivable of 169.3 million, which is also higher than previous quarters and is primarily associated with payment terms that we provide for the cypher redistributors. The accounts receivable line items has increased as cycle refills have increased and is in line with those payment terms. Third, we are now categorizing a majority of medical affairs in certain other costs in G&A instead of an R&D. This represents an approximately 19 million shift from R&D to G&A in the current quarter. No reclassifications were necessary for prior periods, however it is important to note when reviewing trends in our operating area.
Severe vision loss.
The rates are meaningfully lower than zero, <unk> zero, and 1% on a per injection basis and using that metric with 50000 patients treated youre also still at a rate of 0.0% to 1%. So something that of course, we hope to understand better in the future.
Most importantly stable and big flows overtime.
Thanks, guys.
Thank you Sue.
Thank you and our next question coming from the line of <unk> Ahmad with Bank of America. Your line is open.
Timothy Sullivan: And finally, our operating expenses do not yet reflect the ongoing efficiencies we expect from our restructuring due to severance and winding down of certain projects. We expect to realize these efficiencies beginning in 2024.
Hi, Thank you good morning, guys.
I wanted to ask a question about the competitive landscape if I could.
Timothy Sullivan: As of September 30th, 2023, we had 452 million in cash and cash equivalent. September and October demand provided us with a better view of the demand and sales trajectory going forward based on this and cost savings from our recent restructuring. We now expect our cash balance to fund our operations into at least the second quarter of 2025.
How do you think it's evolving it looks like a Dallas has reported $8 million for its first month on the market and they are projecting about 72 million for the full calendar year, which I believe.
And then March so can you just talk about what feedback you're getting from the field force about competition.
Cedric Francois: I will now turn the call back over to Cedric for closing remarks.
Competition, whether it's increasing and where if anywhere you might be seeing patients switching. Thank you.
Cedric Francois: Cedric. Thanks, Finn. This quarter was not without challenges, but we are now seeing a clear rebound in the growth and progress we accomplished earlier this year.
Thank you. Thank you and great to hear you Adam I'll take that question, yes. Thanks to the so it's interesting we have firstly from analysts and investors a lot of surveys done with physicians were.
Cedric Francois: We are on the cusp of expanding cypheries reach in global markets alongside steady growth in the PNH market with empathy. We remain dedicated to delivering on our strategic priorities and creating long-term shareholder value.
The sentiment that's giving it back to US is that these physicians are bullish on on ice debate.
Different to what we hear in the field, it's been relatively quiet in the fields.
Unknown Executive: Let us now open the call for questions.
We're not hearing a lot of noise, where with really really not hearing very much from the field and I think.
Unknown Executive: Finally, Lisa and Jellman, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, may press star 11 again.
If you look at our first three quarters, which is in line with their fiscal year reporting we were $160 million in the first three quarters of floor. So thats a hugely successful launch.
Unknown Executive: Please send by while we compiled Keanu Roster.
John Miller: Now first question coming from the line off. Umar Refug would have a quarry on us open. Hi guys, this is John Miller on maybe not that you've had some more commercial experience through all of this speculative stuff.
I think we are going to be laser focused on executing our plan, which is to continue to talk about increasing effects over time, the strong clinical profile long term efficacy dosing flexibility and just to say the vast majority of physicians that are using <unk> every six to eight weeks.
Adam Townsend: Can you maybe update our assumptions on the difference between vials shipped and doses given what proportion of doses are sitting in fridges at various places in your estimation? And then secondly, maybe on the the ideology of vasculitis. Do you have any early signs out of the needle switch at this point? Is that really making an impact in rate or are there any suggestions of a patient risk profile that might identify patients ahead of time as there have been any motion on that one?
We have strong payer coverage J code in October.
Im very.
Very confident that we will continue to show positive growth with <unk>. So we're going to be focused on a plan we execute our plan I think we'll do incredibly well.
Okay, Thanks, Adam and maybe as a follow up.
Astellas is gonna be showing its 24 months and I believe at the AAN Conference. This week this weekend and as it relates to every other month.
Adam Townsend: Here John, great to hear you. I'm going to have the first question over to Adam and then I'll take the second one. Hey John, so that's the first. I think we're extremely confident and pleased with the commercial execution. And let me give you a few numbers. So obviously 37,000 commercial vials in the third quarter at about 10,000 soles. All of these vials were shipped to physicians and we assume based in our mass an average of about one to one and a half weeks of demand vials sitting in a refrigerator. So, you know, we think we have over 100,000 injections since launch about 50,000 patients being treated with syphovery. I think it's a really strong commercial execution.
I was telling you about what they wanted to see on a curve separation for every other month dosing.
I think it does internally.
Thank you.
Physicians would like to see increasing effects over time, I think that's very important for them and at the American Academy of Ophthalmology. This weekend, we will be presenting our gale data. The first year of the extension study where patients have received some of the patients have received three year.
<unk> of <unk>.
Continuous peg set of Copeland therapy, I think physicians will be in.
By our data and they also are impressed by the science, that's behind Peg set of Copeland, they like the flexibility with dosing with monthly and every other month dosing being meaningful and three years of data and actually the first patients will be patients will be rolling out of Gail.
Cedric Francois: So, hopefully that answers your question and I'll hand back to Patrick for the second part. Thank you Adam and then talking about etiology so it is still too early, right? I mean, we're going to need probably another quarter or two to really understand whether the needle had an impact or not. But the most important metric here is that the rate of vasculitis is very low and stable, right? And that's something that's over the past couple of months we've been able to track.
<unk>, that's five years in the clinical study with continuous peg set appropriate treatment. So we're really proud of that data.
Cedric Francois: And of course, it provides confidence to the physicians. So with more than 100,000 injections done in the real world, we are at a rate and continue to be at a rate was 0.01%. But it's of course also important to look into which patients have significance and severe vision loss. And there the rates are meaningfully lower than 0.01% on a per injection basis. And using that metric with 50,000 patients treated, you're also still at a rate of 0.01%. So, something that of course we hope to understand better in the future. But most importantly, stable and being followed.
Okay. Thank you.
Unknown Executive: Thank you.
Thank you.
Thank you and our next question coming from the line of from Rama with Jpmorgan. Your line is open.
Hey, guys. Thanks, so much for taking the question.
So in terms of.
Muse type ovary back in the summer you talked about this one third one third one third breakdown when it comes to utilization.
What does that break down now and what are you seeing from those that were maybe previously in that one third bucket that was on the sidelines or.
So you're waiting for more information thanks, so much.
Thanks, Adam Yeah. Thanks, <unk>. So obviously the last update to our market research was in August and that showed similar results as to the recession. We shared on the Q2 call now I think with Super encouraged to see continued enthusiasm for <unk> from physicians we've.
Tazeen Ahmad: And our next question coming from the lineup, Tazeen Ahmed, with Bank of America. You're on it's open. Hi, thank you. Good morning, guys. Just wanted to ask you a question about the competitive landscape, if I could, and how you think it's evolving. It looks like if Dallas has reported $8 million for its first month on the market, and they are projecting about $72 million for their full calendar year, which I believe, and then March.
Tazeen Ahmad: So can you just talk about what feedback you're getting from field force about competition, whether it's increasing, and where, if anywhere, you might be seeing patients, which I thank you. Thank you, Tazeen. Great to hear you. Adam will take that question. Yeah, thanks, Tazeen. So it's interesting. We hear, firstly, from, you know, analysts and investors, a lot of surveys done with physicians, where, you know, the sentiment that's given back to us is that these physicians are bullish on, on eyes of a, it's different to what we hear in the field.
Started to see.
New physician start SIFI every stop new patients in one metric I, absolutely love and I think it's been a really powerful metric for US is since launch we have had double digit numbers of new accounts signed for <unk> for the first time every week.
It's continued since launch that shows you a little bit of a sentiment of physicians that were being transparent with sharing with them. We're being open and I think it's driving the continued growth that youll seeing.
Our results.
Have seen intensely honestly, we've seen some physicians become a bit more conservative for example, many physicians are now starting the west side first and also theyre not doing bilateral injections as their first interactions, we do still see bilateral injections being done, but they're being a bit more thoughtful in how they approach it but.
Tazeen Ahmad: It's been relatively quiet in the field. We're not hearing a lot of noise. We're, we're really, really not hearing very much from the field. And, you know, I think if you look at our first three quarters, which is in line with their fiscal year reporting, we were $160 million in the first three quarters of launch. So that's a hugely successful launch. I think we are going to be laser focused on executing our plan, which is to continue to talk about increasing effects over time, the strong clinical profile, long term efficacy, dosing flexibility.
But the segments from the market research, we are making in ground at each of those one segments. I think we are really really driving demand I think youre seeing the results of that in the number of patients that are choosing to use <unk>.
Thanks, so much for taking our question.
I think all of them.
Yeah.
Okay.
Thank you.
Next question coming from the line of Colin Kelsey with Baird. Your line is open.
Tazeen Ahmad: And just to say the vast majority of physicians are using syphobic every six to eight weeks. We have strong pair coverage, our jcode in October. I'm very confident that we will continue to show positive growth with syphobic. So we're going to be focused on our plan. We execute our plan. I think we'll do incredibly well. Okay, thanks Adam. And maybe as a follow up. As I was going to be showing it's 24 month data, I believe that the AIO conference is weak this weekend. And as it relates to every other month, what are physicians telling you about what they want to see on close separation for every other month, don't think.
I don't think we can hear you.
Okay.
Please check your mute button.
Don't think we can hear you coding.
Okay I'll go on to the next question. Our next question coming from the line of Nicholas.
<unk> with Citigroup Your line is open.
Hi, Cedric and team. Thank you for taking the questions I had one on IC on PGN <unk> <unk>. So for that sustaining you showed in the slide was that an <unk> patient <unk> patient and then more broadly would you expect sort of coupon to behave similarly in each indication and then as regards valeant.
Caroline Baumal: Thank you, David Caroline. Would you like to answer this? Thank you. Physicians would like to see increasing effects over time. I think that's very important for them.
Caroline Baumal: And at the American Academy of Ophthalmology this weekend, we will be presenting our Yale data, the first year of the extension study where patients have received some of the patients have received three years of continuous pegs at a Kotlin therapy. I think physicians will be impressed by our data. And they also are impressed by the science. That's behind pegs at a Kotlin. They like the flexibility with dosing with monthly and every other month dosing being meaningful and three years of data.
Could you talk about what level of proteinuria reduction would be considered clinically meaningful and it will there be any interim analysis of that trial before the <unk> 2004 top line. Thank you.
Thank you so much you guys and thank you for that question. So that was a <unk> patient that to you so that image from.
I cannot overemphasize, how meaningful that is to a path is right. So just as a reminder for those that are not familiar with this.
CTG and ICM PGM, you get a deposition of C. III covalently bound so irreversibly attached to the service of integral mirrors for these for those deposits to go away you need to have healthy cells that can actually internalize, the <unk> III product and processes property.
Caroline Baumal: And actually the first patients will be patients will be rolling out of Yale this December. That's five years in the clinical study with continuous pegs at a Kotlin treatment. So we're really proud of that data. Okay, thank you.
So for us to see these improvements over the course of three months is actually really unbelievable and this isn't a post transplant situations. So these are actually patients that were transplanted and that had a recurrence of the disease. So needless to say really really meaningful to this population. We see these effects both in <unk> and in <unk>.
Unknown Executive: Thank you, Tazeen.
Anupam Rama: Thank you, and our next question coming from the line of Anupam Rama with JP Morgania Lonesophan. Hey guys, thanks so much for taking the question. So in terms of news as DiPovery, back in the summer, you talked about this one third, one third, one third, break down, when it comes to utilization. What is that breakdown now, and what are you seeing from those that were maybe previously in that one third bucket that was on sidelines or waiting for more information.
<unk> and again as mentioned this very important segment as well in the post transplant setting.
As it relates to Valeant there is not an interim readouts, there's going to be six month readout, and we will consider 50% reduction in proteinuria to be clinically meaningful.
Great. Thank you Sanjay.
Thank you.
Anupam Rama: Thanks so much. Thank you, Anupam Adam. Yeah, thanks Anupam. So obviously the last update to our market research was in August, and that showed similar results as to the research we shared on the Q2 pool. Now, I think we're super encouraged to see continued enthusiasm for Cypovery from physicians. We started to see new physicians start Cypovery start new patients and one metric I absolutely love, and I think it's been a really powerful metric for us is since launch, we have had double digit numbers of new accounts signed for Cypovery for the first time every week.
Okay.
Thank you our next question.
And our next question coming from the line of Steve <unk> with Raymond James Your line is open.
Hi, good morning. Thanks, So much I had three questions on <unk> first is just on if you expect the label Amendment at some point and if so would that include just retinal vasculitis update or would you also look to add some gail data or some of the visual function data.
That you noted.
Second question is Astellas actually provided peak sales guidance as well I think about $1 three to $2 $6 billion curious, if youre modeling less similar or more for safe over it.
Anupam Rama: And that's continued since launch that shows you a little bit of the sentiment of physicians that we're being transparent, we're we're sharing with them, we're being open, and I think it's driving the continued growth that you're seeing from our results. We have seen totally honestly, we've seen some physicians become a bit more conservative. For example, many physicians are now starting the worst eye first, and also they're not doing bilateral injections as their first injections.
And then lastly, the 50000 patients treated that you mentioned I'm curious if you know or have a sense of how many are currently on treatment.
And can estimate.
Basically therefore, how many discontinuation you had amid the RV disclosures patients that you might be able to bring back to safe over thank you.
Thank you so much Steve I will take the first question and then hence the other two over to Adam as it relates to the label So I think.
Anupam Rama: We do still see bilateral injections being done, but they're being a bit more thoughtful in how they approach it. But the segments from the market research, we're making in-grounds in each of those one third segments. I think we're really, really driving demand, and I think you're seeing the results of that in the number of patients that choosing to use Cypovery. Thanks so much for taking our questions. Thank you.
We should expect that there will be a label change and update at some point.
I think it's noteworthy that it hasnt happened, which is again a reflection of the fact that we have a stable situation with a very rare event that I think the FDA along with us.
Tracking before we.
It gets to a label change.
So that's something to be fellows.
As far as it relates to what that will be that of course, we don't know yet.
Yeah. Thanks, Steve So obviously, we don't guide, but with 5 million patients worldwide.
Colleen Kusy: Our next question coming from the line of Colleen, could you see with Bear, you're on his open.
Think it's a very sizable market is probably the best way of answering that question and then the third part of your question.
Of the 50000 patients currently on <unk>, we think discontinuation is very low at the moment, we obviously did see some discontinuation in steering the.
Unknown Executive: Colleen, I don't think we can hear you. Please check in the ad button. Don't think we can hear you, Colleen.
The retinal vasculitis phase, but we think it's very low because it's early in launch and I think if you look now as a metric in October demand trajectory was back to July levels.
I think.
Again, I think we expect to see all of the new patients that are starting and all the continued patients to start.
Unknown Executive: Okay, I'll go on to the next question, our next question coming from the line of, you've got no comments with City Group, you're on his open. Hi, Sudgerkin. Thank you for taking the question. I had one on ICMPGN and C3G. So for that, the standing you showed in the slide, was that an ICMPGN patient or a C3G patient, and then more broadly, would you expect a pegs set a copone to behave similarly in each indication.
To benefit from this treatment and try and stay on it patients are incredibly motivated but short answer is discounts. We believe are quite low during this time period, especially now we're back to the growth trajectory.
Thanks, Adam just to clarify so I think I misheard. So 50 K is the current patients on safe over estimate.
Correct Alright.
Alright, Thanks, Amit.
Unknown Executive: And then as regards valiant, could you talk about what level of prognaria reduction would be considered clinically meaningful? Colleen, it will there be any interim analysis of that trial before the 3Q24 top line? Thank you. Thank you so much, Yigal, and thank you for that question. So that was a C3G patient. That's you saw, that image from, and I cannot overemphasize how meaningful that histopath is, right? So just as a reminder for those that are not familiar with this, in C3G and ICMPGN, you get a deposition of C3 covalently bound, so irreversibly attached to the cells in the glomerulus.
Okay.
Thank you our next question.
And our next question coming from the line of Phil Nadeau with TD Colin Your line is open.
Good morning, Thanks for taking our questions.
One is on the radio vasculitis do you expect to present any updated rate or number of cases.
This this weekend.
For us to make a presentation on on their evaluation of vasculitis. This.
This weekend and then going forward when could we expect future updates is there a cadence that you'd be willing to guide to once a quarter or just a significant medical meetings or something like that.
Unknown Executive: For these, for those deposits to go away, you need to have healthy cells that can actually internalize that C3 product and process it properly. So for us to see these improvements over the course of three months is actually really unbelievable. And this is in the post-transplant situation. So these are actually patients that were transplanted and that had a recurrence of the disease. So needless to say, really, really meaningful to this population.
Thank you Phil So I think what's really important here is that this this rates is constant is under control and has remained unchanged I think that is really something so we're going to stop talking about individual cases, because frankly.
That's not an effort that we think is truthful.
To put this in perspective.
<unk> case of especially with geographic atrophy that was reported to us with rescue that is already from September one right. So we have that case with a non GAA patients on September 20 <unk>.
Unknown Executive: We see these effects both in C3G and in ICMPGN. And again, as mentioned, this very important set of treatment as well in a post-transplant setting. As it relates to valiance, there's not an interim readout. There's going to be six month readout. And we will consider 50% reduction in protein area to be clinically meaningful. Right. Thank you, Sergeant. Thank you.
Yigal Nochomovitz: One more for an next question.
So again, we keep tracking all of this we will report on this if there are changes that we are not going to do this on a case by case basis, then as it relates to Srs Caroline can briefly speak to this because we have been collaborating very closely with them.
Thank you Cedric.
Are in close communication with the Srs risk committee and with regards to cases and as far as we're aware there will be no update at the American Academy.
Unknown Executive: And our next question coming from the line-up.
Unknown Executive: The seat has with Raymond James, you're on this open.
Unknown Executive: Good morning. Thanks so much. I had three questions on site, fovery. First is just on if you expect a label amendment at some point. And if so, would that include just retinovaculitis update? Or would you also look to add some gale data or some of the visual function data that you noted? Second question is as well as actually provided peak sales guidance as well. I think about 1.3 to 2.6 billion US dollars.
Unknown Executive: Curious if you're modeling less similar or more for site fovery. And then lastly, the 50,000 patients treated that you mentioned. I'm curious if you know or have a sense of how many are currently on treatment. And can estimate basically there for how many discontinuations you had amid the RV disclosure patients that you might be able to bring back to site fovery. Thank you. Thank you so much. I'll take the first question and then hand the other two over to Adam as it relates to the label.
But we did provide an update at the retina Society and at the Academy. This weekend. In addition to the Gale data, we'll be presenting some very meaningful micro perimetry data as well as having.
Having a presentation on artificial intelligence imaging and photoreceptor preservation from our study.
And going forward should we expect an update on the quick once a quarter or or any sense of when.
We will provide updates.
While we continue to remain transparent with physicians.
<unk> that we receive is reported to the FDA as per regulations, and if that rate changes, we will update the community.
Great. Thanks for taking my questions.
Thank you Phil.
Unknown Executive: So I think, you know, we should expect that there will be a label change and update at some point. I think it's noteworthy that it hasn't happened, which is again a reflection of the fact that we have a stable situation with a very rare event that I think the FDA, along with us, is tracking before we get to a label change. So that's, you know, something to be followed as far as it relates to what that will be that of course we don't know yet. Adam, can you take an extra?
Thank you our next question now.
Our next question coming from the line of Derek <unk> with Wells Fargo. Your line is open.
Hey, good morning, and thanks for taking the questions maybe just one on Europe I guess.
Recent interactions with the EMA bid on the application and just in terms of the market opportunity maybe this one's for Adam or do you think the overall adoption in the EU will be any different than the U S. Thanks.
Thank you so much Derek so EMEA is on track and has continued to be on track.
Cedric Francois: Yes, thanks Steve. So obviously we don't guide but we are with 5 million GA patients worldwide. We think it's a very sizable market. It's probably the best way of me answering that question. And then the third part of your question of the 50,000 patients currently on site fovery, we think discontinuations is very low at the moment. We obviously did see some discontinuations during the retinal vasculitis phase, but we think it's very low because it's early and launch.
As we've mentioned the Gulf of storms in the past. This has really been a labor of love over many many years of preparing the physician community as well as the regulators as well as the payers.
In Europe and.
We're very excited about being able to offer this product.
We believe next year.
Adam you want to maybe if you talk about.
Yes.
Thanks, Eric Thanks for the question. Yes. We are we are ready to go in terms of commercial and medical Affairs <unk>.
Cedric Francois: And I think if you look now as a metric in October, demand trajectory was back to July levels. So I think again, I think we expect to see all of the new patients that are starting and all the continued patients to start to benefit from this treatment and try and stay on it. The patients are incredibly motivated, but sure answer is discons we believe are quite low during this time periods, especially now we're back to the growth. Thank you for your entry. Thank you, Adam, just to clarify, so I think I miss her, so 50k is the current patients on Psyfo re-estimate? Correct. All right, thank you so much. Thank you.
Infrastructure, So we're ready in Germany right. So we're good to go once we get feedback.
5 million Gi patients worldwide Eric.
Obviously about one to one 5% in the U S. So the rest is all ex U S. So it's a very sizable opportunity.
As a nice little analog about 45% of sales of anti VEGF.
Drugs are ex U S rights, so its a sizable opportunity for us a few things to think about obviously, it's a payer market.
Health technology assessment market.
And highly likely that.
Brian for example, again branded anti VEGF prices are about 40% to 70% discount to the U S. Anti VEGF prices, even with that metric. This is a sizeable opportunity and the teams really invested the time to get to know the key opinion leaders.
Unknown Executive: Thank you, on one front next question. And our next question, coming from the line-up, Phil Nadu, with T.D. Collins, here on his open.
Phil Nadu: Good morning, thanks for taking our questions. Questions on the rate of vasculitis? Do you expect to present any updated rate or number of cases at the AAO meeting this weekend? Do you expect ASRS to make a presentation on their evaluation of vasculitis this weekend? And then going forward, when could we expect future updates? Is there a cadence that you'd be willing to guide to? Like once a quarter or just that significant medical meetings or something like that? Thanks. Thank you, Phil. So I think what's really important here is that this rate is constant, is under control and has remained unchanged. I think that is really something.
And we believe that.
Being transparent as we were in the U S. We've been with key opinion leaders and doctors ex U S. We think that they have all of the information that they need.
And should we get approval I think the DOCSIS will be ready to go very quickly.
Yeah.
Yes.
Okay.
Thank you one moment our next question.
Yes.
Our next question coming from the line of Al <unk> with UBS. Your line is now open.
Okay.
Cedric Francois: So we're going to stop talking about individual cases because frankly, that's not an effort that we think is fruitful. You know, to put this in perspective, the last case of a patient with geographic atrophy that was reported to us with vasculitis is already from September 1st, right? So we have that case with a non-GA patient on September 22nd, but that's been it. So again, we keep tracking all of this. We will report on this if there are changes, but we are not going to do this on a case-by-case basis.
Guys. Thanks, so much for taking the question just another on your App and can you just.
Talk a little bit about how they're going and the latest on your confidence on approval there.
And then in terms of the feedback from physicians in Europe relative to the new off maybe on safety and <unk>.
And then any commentary on what we should expect.
In terms of the contribution to revenues next year from here. Thanks.
Thank you Ellie well I'll take the first one then I will have Karen and speak about the doctors on safety in Europe, and then Adam kit or Tim can talk about revenue.
Caroline Baumal: Then as it relates to ASRS, Caroline can briefly speak to this because we've been collaborating very closely with them. Thank you, Cedric. We are in close communication with the ASRS rest committee and with regards to cases. And as far as we are aware, there will be no update at the American Academy. But we did provide update at the Retina Society and at the Academy this weekend, in addition to the Gail data, we'll be presenting some very meaningful microprimetry data as well as the having a presentation on artificial intelligence imaging and photoreceptive preservation from our studies.
But again the European discussions have gone very well as you all know kind of correlation to functionality is very important in Europe and as the data kind of comes together overtime now also with scale.
Something that we feel very good about.
And then on the doctors in Europe. Thank you.
The Kols in Europe are very well connected with the U S. Kols, it's really a global community. Many of them were involved in the clinical study and have high confidence in.
Our product and are familiar with its use.
Also the really data driven and we have this visual function micro perimetry data, we have key leaders in the U S. But also in Europe on micro Perimetry, who are impressed by this data and are looking forward to use of tysabri.
Caroline Baumal: And going forward, should we expect an update on the rate like once a quarter or any sense of when you will provide updates? Well, we continue to remain transparent with positions and everything that we receive is reported to the FDA as per regulations. And if that rate changes, we will update the community. Great. Thanks for taking our questions. Thank you, Phil. Thank you.
Derek Archila: A moment for next question. And our next question coming from the line of Derek Arcila with Wells Fargo. You're on this open.
Thanks Ali and then in terms of revenue.
Ex U S is a very large proportion of potential future revenue so with the anti digest, we expect thats. The estimate that's around 45% of total revenue its actually more patients, but less revenue per patient.
In terms of next year however.
We expect approval in the first quarter really that rollout becomes sort of a country type by country basis. The first one being Germany. So we don't expect a huge amount of contribution next year, but we do expect them to be able to recognize revenue right after approval.
Cedric Francois: Hey, good morning and thanks for taking the questions. Maybe just one on Europe. I guess, you know, how have your recent interactions with the EMA bid on the application? And just in terms of the market opportunity, maybe this looks for Adam. And do you think the overall adoption in the EU will be any different than the US? Thank you so much, Derek. So EMEA is on track and has continued to be on track.
We expect in the first quarter.
Great. Thanks, so much.
Okay.
Yes.
Thank you Ali.
Cedric Francois: You know, as we've mentioned a couple of times in the past, this has really has been a labor of love over many, many years of preparing the physician community, as well as the regulators, as well as the payers in Europe. And we're very excited about being able to offer this product. We believe next year, right. So Adam, you want to maybe briefly talk about the adoption. Yeah, thanks, Derek. Thanks for the question here.
Thank you our next question.
Our next question coming from the line of <unk> <unk> with Jefferies. Your line is open.
Good morning. This is ivy on for our cash we have two questions.
First as you saw in the prepared remarks, our account receivables, which is now at $117 million this quarter compared to 7 million Inc. Could you maybe give us more visibility there and what's the current inventory level Abi distributors level and the second is I think someone already asked this but today I think competitors also.
Cedric Francois: We are, we are ready to go in terms of commercial and medical affairs, infrastructure. So we're ready in Germany, right. So we are good to go once we get feedback. 5 million GA patients worldwide, Derek, obviously, about one to 1.5 in the US. So the rest is all XUS. So it's a very sizable opportunity. You know, as a nice little analog about 45% of sales of anti-veges drugs are XUS, right. So it's a sizable opportunity for us.
All therapy sale estimate of around 143 to $2 6 billion, which seems quite conservative compared to your numbers laid out in their proxy, which is twice the dose of around like $4 billion in just the U S. The curious what do you think may have widespread changes in box for them on the GM market potential and has your view changed at all.
Thanks.
Cedric Francois: A few things to think about. Obviously, it's a payer market and health technology assessment market and highly likely that brand, you know, for example, again branded anti-veget prices are about 40 to 70% discount to the US anti-veget prices. Even with that metric, this is a sizable opportunity and the teams really invested the time to get to know the key opinion leaders. And we believe that, you know, being transparent as we were in the US, we've been with key opinion leaders and doctors XUS, we think that they have all of the information that they need. And should we get approval, I think the doctors will be ready to go very quickly. Thank you.
Thank you so much for that question I'll hand, it over to Tim and then I'm sure. The big change in accounts receivables related to the fact that we have fairly extended but also market typical payment terms.
So that.
That receivable is primarily the distributors.
In particular, the largest portion is per site <unk>.
It's typical for a launch in this space and we don't expect any issues in terms of.
Terms of collection.
Collection so.
It's just fairly typical and I think youll see that number increase slightly over time as sales increase.
And then with respect to Astellas, but I think it's hard for us to speculate why they've had that change.
We obviously think this is a gigantic market and.
Anything that they do I mean, if you looked at their prepared remarks from what we saw they said they are they're early in their launch and they are still evaluating based on not only what they're seeing personally but also what they're seeing from us.
Caroline Baumal: One moment for an next question. Next question coming from Delan of El Marley. Would you be a seal on his open? I see guys. Thanks so much for taking the question. Just another on your app. Can you just talk a little bit about how the review is going and the latest and your confidence on approval there. And then in terms of the feedback you've gotten from physicians in your app relatives to the US, maybe on safety and their perspective. And then any commentary on what we should expect in terms of the contribution to revenues next year from your app. Thanks. Thank you, Ellie. Well, I'll take the first one.
And I expect you will see that number evolve overtime.
Yes, and just to add to Tim's Ivy, It's Adam yes.
Truly believe it's a large market, but it's also a market, which is driven by certain aspects of the good product profile, so flexible dosing increasing effects over time, so within a large market. We truly believe we have a very competitive product.
It's an exciting opportunity to prevent and help patients.
Vision overtime worldwide. So we're excited to go in and get after that.
Cedric Francois: Then I will have Caroline speak about the doctors on safety in Europe and then Adam Ken or Tim can talk about revenue. But again, European discussions have gone very well. As you all know, kind of correlation to functionality is very important in Europe. And as the data kind of comes together over time now also with Gail, that is something that we feel very good about.
Thank you.
Yeah.
Thank you our next question.
And our next question coming from the lineup Annabel <unk> with Stifel. Your line is open.
Hi, Thanks for taking my question I had a couple.
So I guess with the greater experience that physicians are having and more understanding of this.
Caroline Baumal: Caroline on the doctors in Europe. Thank you. The KOLs in Europe are very well connected with the US KOLs. It's really a global community. Many of them were involved in the clinical study and have high confidence in in our product and are familiar with its use. Also, they're really data driven. And we have this visual function, microprimetry data. We have key leaders in the US, but also in Europe on microprimetry who are impressed by this data and are looking forward to use the site. Thanks, Ellie.
Rare event do you notice a change in the way physicians are selecting their patients.
You had identified some low hanging fruit initially.
<unk> become more selective in their use since those investors the comfort level now increasingly they're becoming a little bit more liberal with or Houston, maybe move in Q less severe patients. So just a little bit of color around the type of patient selection.
Physicians have and then secondly, I was wondering if there is any moment, where you'd be comfortable giving guidance on on tysabri sales going forward. Thanks.
Thank you so much.
Got it.
Timothy Sullivan: And then, in terms of revenue, XUS is a very large proportion of potential future revenues. So, with the anti-VHS, we expect that's the estimate that's around 45% of total revenue. It's actually more patients, but less revenue per patient. In terms of next year, however, you know, while we expect approval in the first quarter, really that rule out becomes sort of a country type by country basis, the first one being Germany. So, we don't expect a huge amount of contribution next year, but we do expect we will be able to recognize revenue right after approval, which we expect in the first quarter. Great, thanks so much. Thank you, Ellie.
Thank you.
Think physicians are.
Very enthusiastic about <unk> and they understand whenever we present about the large robust dataset that we have in the clinical findings. They they understand the science and Thats really what drives them.
Akash Tewari: Thank you, one moment for next question. Now, our next question coming from the line of Akash Tewari, which has reached three. So, let us open.
What we have seen is that physicians may be.
A little more conservative than they were in the beginning for example, not treating both eyes first visit or starting with the worst I first which is not uncommon from interim vigil injections, but they are very comfortable now with the technique of drop of the product, which is slightly thicker and.
We have continued their use with enthusiasm.
Adam do you have anything to add to that yeah. Thanks for the question Annabel I'll just add to Caroline's comments here I think.
Timothy Sullivan: Good morning. This is Abby on for Akash. We have two questions. First, as we said, in the prepared remarks, uncomfortable, which is found at 17 million this quarter compared to seven million at your age. Could you maybe be the more visibility there? What's your inventory level at the distributors level? And the second is, I think someone already asked this, but today, I think competitors also announced their pixel estimate of around 1.3 to 2.6 billion, which seems quite conservative compared to numbers lead out in their proxy, which implies the skills of around four billion in just the US. The curious, what do you think may have why to the changes in the program on the geomarky potential and have your view changed at all things?
You saw the graph in the presentation in October we're seeing that.
Demand trajectory eclipse and back to the July levels.
And one thing I love about this is that we're seeing new patients come onto <unk> every week.
And that to me is.
Really solid signal of confidence.
I gave this metric Kelly argument again, because it excites me.
Every week since launch we've had double digit new accounts start in order to <unk> for the first time.
And I think Thats, a very positive positive thing now with the with the J code I expect us to continue to drive that but as Caroline said it was a little bit of a pause in terms of how people use the drug and I think we're starting to make inroads that that confidence is coming back into the community.
Adam Townsend: Thank you so much for that question. I'll hand it over to Tim and then Adam. Sure. The big change in accounts receivables relates to the fact that we have fairly extended but also market typical payment terms. So, that receivable is primarily the distributors. In particular, the largest portion is for site ovary. You know, it's typical for a launch in this space, and, you know, we don't expect any issues in terms of, you know, in terms of collections.
Sure and I'll just jump in on guidance.
I don't know when we plan to give any guidance what I will say is that.
If you'd asked me, where we were three months ago, and where we are today I'm really excited and and I think the more we can get this the next couple of quarters under our feet. We will have a really good sense of where we are I don't know when we'll actually give guidance its something we.
Adam Townsend: So, it's just fairly typical, and I think you'll see that number increase slightly over time as sales increase. And then with respect to Estella, I think it's hard for us to speculate why they've had that change. We obviously think this is a gigantic market, and, you know, anything that they do. I mean, if you looked at their prepared remarks from what we saw, they said they're early in their launch and they're still evaluating based on. Not only what they're seeing personally, but also what they're seeing from us. And I expect you will see that number of all over time.
We haven't committed to.
We'll let you know when we have a decision on that.
Okay, great. Thank you.
Thank you.
Okay.
Thank you.
And as a reminder to ask a question. Please press star one now.
Next question coming from the line of Douglas Tsao with H C. Wainwright Your line is open.
Good morning, sorry about that good morning, and thanks for taking my question I guess Adam.
Adam Townsend: Yeah, and just to add to Tim's, Ivy is Adam. Yeah, we truly believe it's a large market, but it's also a market which is driven by certain aspects of a good product profile. So flexible, though, seeing increasing effects over time. So within a large market, we truly believe we have a very competitive product. It's an exciting opportunity to prevent and help patients vision over time worldwide. So we're excited to go and get after that.
Wanted to touch on something you commented on we've talked about it before in terms of patient interest and demand I'm just curious how are you.
Unknown Executive: Thank you.
Trying to overcome perhaps position I don't want their resistance to sort of hesitation to start treatment for any number of reasons did safety or some docs aren't necessarily fully convinced on the efficacy in the face of sort of trying to get patients to get treated right because it seems like sometimes been talking to doctors they speak about.
<unk> patient enthusiasm and they say that they are sort of trying to pump the brakes on their patients and how are you trying to sort of get docs to ease up on that or is it a matter of trying to just redirect patients to doctors, who are more readily treated with iPhone.
Unknown Executive: One more for our next question. And our next question coming from Delina Annabel Samimy with Steve Full, Yilana Sumpin. Hi, thanks for taking my question. I had a couple. So I guess with the greater experience that physicians are having and more understanding of this rare event. Do you notice a change in the ways physicians are selecting their patients? I know that you had identified low hanging fruit initially. If they become more selected in their use since those events are the comfort level now increasing and they're becoming a little bit more liberal with their use and maybe moving to less severe patients.
Yes.
Okay.
Yes, Thanks, Doug for the question. So, yes, interestingly pre pre launches <unk>. We did we spent a lot of time with Gi patients and they were super enthusiastic about a potential treatment.
They used to give us anecdotes like I want to spend time with my grandkids and be able to read to them.
All of those type of activities that has not changed since launch. This is a very driven patient population.
We obviously doing some commercial activities to help patients flagged that they may have vision impairment and they should go and see a retina physician or an ophthalmologist and optometrist through.
Unknown Executive: So just a little bit of color around the type of patient selection physicians have. And then secondly, I was wondering if there is any moment where you'd be comfortable giving guidance on psychover sales going forward. Thanks. Thank you so much, Anupam. Thank you. I think physicians are very enthusiastic about psychoverry and they understand whenever we present about the large robust data set that we have and the clinical findings. They understand the science and that's really what drives them.
Our television and radio campaign with Henry Winkler, I think Thats had a very positive impact in the market that is driven patients into physicians. We've also started to see that physicians can now have a benefit risk discussion with these patients and the patient activation has an impact on that prescribing physician.
So we'll continue to do more activities to drive patients we have found that hit some physicians.
For whatever reasons not.
Unknown Executive: What we have seen is that physicians may be a little more conservative than they were in the beginning. For example, not treating both eyes first visit or starting with the worst eye first, which is not uncommon from individual injections, but they are very comfortable now with the technique of drop of the product, which is slightly thicker and they have continued their use with enthusiasm. Adam, do you have anything to add to that?
Injecting SIFI appreciate that these patients will seek other physicians that are so that's that's happening within the market, but this is a highly highly motivated patient population and it meets in incredibly good discussion of highly motivated physician conversation.
Great and if I can ask one follow up I know, there's been a lot of focus on the third third third sort of market research that you had talked about from the summer I'm just curious to your sense of the third who had sort of stopped using or werent using.
Unknown Executive: Yeah, thanks for the question Anupam. I'll just add to Caroline's comments. You saw the graph in the presentation in October we're seeing demand trajectory eclipse and back to the July levels. One thing I love about this is that we're seeing new patients come on to psychoverry every week and that's me as a really solid signal of confidence. I gave this metric earlier. I'll give it again because it excites me. Every week since launch we've had double digit new accounts start and order psychoverry for the first time and I think that's a very positive positive thing.
Do you think some of those were just physicians or how many of them were just doctors just for whatever reason, we're never going to be big users and so that you're sort of right now sort of really sort of hitting a good part of the sort of truly receptive market. Thank you.
Yeah. Thanks, Doug So again, if I jump back to pre SIFI relaunch we.
We're always had.
Segment of physicians, who said I'm not going to use your drug until the permanent J code. So that was an assumption that it said that that segment that said, we're not going to use your job. Your drug basically also included those physicians who are waiting for the J code. So I think we are.
Unknown Executive: Now with the J code, I expect us to continue to drive that. As Caroline said, it was a little bit of a pause in terms of how people use the drug and I think we're starting to make indirect that confidence is coming back into the community. Sure, and I'll just jump in on guidance. I don't know when we plan to give any guidance. What I will say is that if you'd ask me where we were three months ago and where we are today, I'm really excited and I think the more we can get the next couple of quarters under our feet, we'll have a really good sense of where we are.
We potentially will see an impact within that segment and have seen an impact within that segment in the last quarter.
I think the more transparent we can be the more.
Open we can be but also now we're pushing efficacy message with physicians I think it unlocks all of those segments and we started to see those segments unlocked with this strong demand levels that we've had.
Since.
Yes for this quarter and moving forward. So I think it's going to be a very positive next couple of quarters.
Okay, great Thanks, and congrats on the progress.
Unknown Executive: I don't know when we'll actually give guidance. It's something we we haven't committed to, but we'll let you know when we have a decision on that. Great, thank you. Thank you. And as a matter of fact, the question, please press star 1-1. Now, next question coming from the line of Douglas Soutwith H.V. Wenwright, Eliana Sullivan. Good morning, sorry about that. Good morning and thanks for taking the question. I guess Adam, I wanted to touch on something that you commented and we talked about it before in terms of patient interest and demand.
Thank you.
Yeah.
Thank you Glen for next question.
And our next question coming from the line of Joseph Stringer with Needham Your line is open.
Hi, Thanks for taking our question just following up on the last two questions for the physicians who are not currently injecting side Tobey for safety reasons.
Is it your sense of the.
The rate of vasculitis.
Unknown Executive: I'm just curious, how are you trying to overcome perhaps physician, I don't want the resistance, the sort of hesitation to start treatment for any number of reasons to get safety or some doctor, not so fully committed, some efficacy, in the face of sort of trying to get patients to get treated. Right, because it seems like sometimes I'm talking to doctors, they speak about patient enthusiasm and they say that they're sort of trying to pump the brakes on their patients.
Unknown Executive: And how are you trying to sort of get docs to ease up on that or is it a matter of trying to just redirect patients to doctors who are more readily treating the type of workers. Thank you. Yeah, thanks Doug for the question. So, yeah, interestingly pre-launches Cypherary, we spent a lot of time with GA patients and they were super-enthusiastic about a potential treatment. They used to give us anecdotes like I want to spend time with my grandkids and be able to read to them and all of those type of activities.
Which has a subset of physician population that I would deem as like odds <unk> those that it's a technical term they.
Unknown Executive: That has not changed since launch. This is a very driven patient population. We're obviously doing some commercial activities to help patients flag that they may have vision impairment and they should go and see a retina physician or an oxymologist or an oxymologist. We've also started to see that physicians can now have a benefit risk discussion with these patients. And the patient motivation has an impact on that prescribing physician. So, we'll continue to do more activities to drive patients.
<unk> wait to see what happens with a drunk once it launches they fallout key opinion leaders. They followed that experience it doesn't matter if you're launching a drug in the retina launching a drug in another space that subset of physician population exists. It's the same within this launch right. So we had physicians, who said I would wait for the permanent J code we've had for.
Physicians, who said I wanted to see that you know professor X or Doctor why is using and has good experience before I start so as we get through the launch trajectory, we expect to unlock all of those segments as those physicians, who are waiting will get the checking the box that they need to say I've seen enough I understand this now my colleagues that you.
Unknown Executive: We have found that if some physicians are for whatever reasons, not injecting cypherary, that these patients will seek other physicians that are. So, that's happening within the market. But this is a highly, highly motivated patient population kind of meets in an incredibly good discussion, a highly, motivated physician conversation. Great. And if I can ask one follow-up, I know there's been a lot of focus on the third, third sort of market research that you talked about from the summer.
Think I'm gonna start to use it so it's it's a future opportunity I think we'll continue to make inroads within that segment.
Great. Thank you for taking our questions.
Thank you Joey.
Thank you.
And I see no further questions in the queue and thank you at this time <unk> time to call back alright, So I'd have to set a coin slot for any closing remarks.
Thank you so much but in closing thank you all for joining US today, we are around later today and tomorrow, if if any additional questions feel free to reach out to marry. This thank you again and have a wonderful day.
Unknown Executive: I'm just curious to your sense of the third who had sort of stopped using or whatever reason, we're never going to be big users. And so that you're sort of right now sort of really sort of hitting a good part of the sort of truly receptive market. Thank you. Yeah. Thanks, Doug. So, again, if I jump back to pre-cypherary launch, we always had a segment of physicians who said, I'm not going to use your drug until the permanent J-code.
Ladies and gentlemen that that phone call conference for today. Thank you for your participation you may now disconnect.
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Unknown Executive: So, there was an assumption in our third, a third, a third, that that segment that said we're not going to use your drug, basically also included those physicians who were waiting for the J-code. So, I think we're, we potentially will see an impact within that segment and have seen an impact within that segment in the last quarter. I think the more transparent we can be, the more open we can be, but also now we're pushing our efficacy message with physicians.
Unknown Executive: I think it unlocks all of those segments. And we started to see those segments unlocked with the strong demand levels that we've had since, you know, for this quarter and moving forward. So, I think it's going to be a very positive next couple of calls. Okay, great. Thanks. We can go out on the progress. Thank you. One more on the next question. Our next question coming from the line-up. Joseph Stringer with Neham, Elon Sopen.
Unknown Executive: Hi, thanks for taking our question. Just following up on the last two questions for the physicians who are not currently injecting psychotherapy for safety reasons. Is your sensitive to the rate of vasculitis? Is the sticking point or is it more physicians are comfortable with the rate? And it's more a matter of, they want to see the total number of patients or the total number of injections a lot higher before they would start injecting.
Unknown Executive: And is there a threshold number of patients or injections that they would need to see to get more comfortable if that is the case before injecting? Yeah, I think Joey, thank you so much for that question. It's important to bear in mind that this rate in itself was never an issue, right? I mean, the problem that we had is that a couple of years ago, there was another drug that started with this rate and ended up with a rate that was orders of magnitude worse, right?
Unknown Executive: Because there was a sensitization against the drug. This is absolutely not the case here. So this is an extremely rare event sporadically over time. And as I mentioned, we're going to keep tracking that, but it is a very straightforward conversation now between physician and the patient. Adam can maybe comment briefly on the commercial impact of that. Yeah, thanks. Hey, Joey, so no surprise. Take out vasculitis through the conversation for a second.
Unknown Executive: Every launch has a subset of physician population that I would deem as like arts, right? Those that it's a technical term. They wait to see what happens with the drug once it launches. They follow key opinion leaders, they follow that experience. Doesn't matter if you're launching a drug in the retinal or launching a drug in another space that subset of physician population exists. It's the same within this launch, right? So we had physicians who said I would wait for the permanent J code.
Unknown Executive: We've had physicians who said I want to see that, you know, professor X or doctor, why is using and has good experience before I start. So as we get through the launch trajectory, we expect to unlock all of those segments and those physicians who are waiting will get the check in the box that they need to say I've seen enough. I understand this now. My colleagues are using. I'm going to start to use it.
Unknown Executive: So it's it's a future opportunity. I think we'll continue to make inroads within that segment. Great. Thank you for taking our question. Thank you, Joey. Thank you. And I see now for the questions in the Q and A Q at this time. I will not turn the call back over to Dr. Cetacrenzo for any closing remarks. Thank you so much. Well, in closing, thank you all for joining us today. We are around later today and tomorrow, if you have any additional questions, feel free to reach out to Meredith. Thank you again and have a wonderful day. Please, and John, and that doesn't got a conference for today. Thank you for your participation. You may now disconnect. [inaudible] . . [inaudible] . . [inaudible]
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