Q4 2023 Verona Pharma plc Earnings Call
Operator: Welcome to Verona Pharma's fourth quarter and full year 2023 Financial Results and Operating Highlights conference call. At this time, all participants are in a listen-only mode.
Welcome to Verona pharma fourth quarter, and full year quarter, 2023 financial results and operating highlights conference call.
At this time all participants are in a listen only mode.
Operator: Earlier this morning, Verona Pharma issued a press release announcing its financial results for the third quarter and full year ended December 31st, 2023. A copy can be found in the Investor Relations tab on the corporate website www.veronafarma.com. Before we begin, I'd like to remind you that during today's call, statements about the company's future expectations, plans, and prospects are forward-looking statements. These four booking statements are based on management's current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from our expectations expressed or implied by the forward-looking statement.
Earlier this morning around pharma issued a press release announcing its financial results.
But the third three months and full year ended December 31st 2023.
A copy can be found in the Investor Relations tab on our corporate website, Www Dot Corona, Florida Dot com.
Before we begin I'd like to remind you that during today's call statements about the company's future expectations plans and prospects are forward looking statements.
These forward looking statements are based on management's current expectations.
These statements are neither promises nor guaranteed and involve known and unknown risks uncertainties and other important factors that may cause our actual results performance or achievements to be materially different from our expectations expressed or implied by the forward looking statements.
Operator: Any such forward-looking statements represent management's estimates as of the date of this conference call. While the company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. As a reminder, this call is being recorded and will remain available for 90 days. I'd now like to turn the call over to Dr. David Zaccardelli, Chief Executive Officer. Please go ahead.
Any such forward looking statements represent managements estimates as of the date of this conference call.
While the company may elect to update such forward looking statements at some point in the future.
It disclaims any obligation to do so even if subsequent events cause it skews to change.
As a reminder, this call is being recorded.
We will remain available for 90 days.
I'd now like to turn the call over the Doctor David Sacra Daly Chief Executive Officer. Please go ahead.
David S. Zaccardelli: Thank you and welcome everyone to today's call. With me today are Mark Hahn, our Chief Financial Officer; Dr. Kathy Rickard, our Chief Medical Officer; Chris Martin, our Chief Commercial Officer; and Dr. Tara Rheault, our Chief Development Officer.
Thank you and welcome everyone to today's call.
With me today are Mark Hahn, our Chief Financial Officer Dr.
Dr. Kathy Recker, our Chief Medical Officer.
Chris Martin, our Chief commercial Officer, and Dr. Terrell wrote our Chief Development Officer.
David S. Zaccardelli: 2023 was a pivotal year for Verona Pharma and importantly for millions of patients suffering from COPD. Following very positive data from our Phase III Enhanced Program, we submitted a new drug application to the FDA seeking U.S. approval of Encephentrin for the maintenance treatment of patients with COPD. As you know, the FDA accepted our NDA for review and assigned a PDUFA target action date of June 26, 2024, and indicated they are not planning to hold an advisory committee meeting to discuss the NDA. We continue to advance our preparations for the planned commercial launch of Encephentron in the U.S. and look forward to continuing our work with the FDA during their review. If approved, Encephentron is expected to be the first novel inhaled mechanism available for the treatment of COPD in over 20 years.
2023 was a pivotal year for our Verona pharma and importantly for millions of patients suffering from COPD.
Following a very positive data from our phase III enhanced program, we submitted a new drug application to the F. D. A seeking U S approval of N C pension for the maintenance treatment of patients with COPD.
As you know the FDA accepted our NDA for review and have signed up to do foot target action date of June 'twenty six 'twenty 'twenty four and indicated they are not planning to hold an advisory committee meeting to discuss the NDA.
We continue to advance our preparations for the planned commercial launch event the pension in the U S and look forward to continuing our work with the FDA during their review.
If approved and see pension is expected to be the first novel inhaled mechanism available for the treatment of C. O P D in over 20 years.
David S. Zaccardelli: We believe its dual mechanism, providing bronchodilator and Non-Steroidal Anti-Inflammatory, has the potential to change the treatment paradigm for COPD. Currently, more than 390 million patients suffer from COPD worldwide, and it is the third leading cause of death globally. Despite the availability of existing TOPC treatments in the U.S., approximately 50% of patients experience persistent symptoms for more than 24 days per month.
We believe its dual mechanism, providing bronchodilator and nonsteroidal anti inflammatory activity has the potential to change the treatment paradigm for C. O P D.
Currently.
More than 390 million patients suffer from COPD worldwide and it is the third leading cause of death globally.
Despite the availability of existing COPD treatments in the U S. Approximately 50% of patients experienced persistent symptoms for more than 24 days per month.
David S. Zaccardelli: In addition, approximately 60% of patients who could be considered maximally treated on dual bronchodilators or triple therapy are dissatisfied. This highlights healthcare professionals' continued need for new and effective COPD therapies to provide relief to their patients. In October, we hosted an investor event where we presented a comprehensive update on our commercial launch preparation. We continue to make excellent progress on this front, including strengthening our commercial and sales team and continuing to finalize key tactics, including our distribution and patient service program. Our branded HCP and patient engagement plan, and our internal data infrastructure capabilities to allow quick and actionable insights during launch. We have also continued the rollout of our disease awareness campaign, Unspoken COPD, which launched at the Chestnut.
In addition, approximately 60% of patients who could be considered maximally treated on dual bronchodilator or triple therapy are dissatisfied.
Highlights Hcp's continued need for new and effective COPD therapies to provide relief to their patients.
In October we hosted an investor event, where we presented a comprehensive update on our commercial launch preparation.
We continue to make excellent progress on this front, including strengthening our commercial and sales team.
Continuing to finalize key tactics, including our distribution and patient services program.
Our branded HCP and patient engagement plans.
And our internal data infrastructure capabilities to allow quick and actionable insights during lunch.
We have also continued the rollout of our disease awareness campaign Unspoken C O P D.
Which launched at the chest meeting.
David S. Zaccardelli: The campaign is actively highlighting the severe impact of COPD on patients' lives and encourages HCPs to engage patients in a better dialogue to help optimize their care. Overall, we believe we are in a strong position to successfully launch NCFentron, pending approval in June. This confidence is based on the novel profile of N.C. Fentron.
The campaign is actively highlighting the severe impact of COPD on patients' lives and encourages H C piece to engage patients and a better dialogue too.
Help optimize their care.
Overall, we believe we are in a strong position to successfully launch N P pension pending approval in June.
This confidence is based on the novel profile events he pension.
David S. Zaccardelli: The significant unmet need in COPD, Power Commercial Preparation, and the deep experience and capabilities of the Verona team. In addition to the planned U.S. launch of NCFentron, we've progressed the development of two new Phase II programs. First, we are developing a fixed-dose combination formulation of n-Cfentrin and glycopyrrolate, Alama, for the maintenance treatment of COPD delivered via nebulizer. Fixed dose combination therapies are commonly used in the treatment of COPD, historically in DPI and PMDI formulations. Based on market research, an unmet need exists for a nebulized fixed-dose combination therapy. We believe the combination of ncfentrin with ELAMA could provide COPD patients with the first nebulized fixed-dose combination that provides bronchodilation through two complementary mechanisms and also non-steroidal anti-inflammatory effects.
Significant unmet need in C O P D R.
Our commercial preparation and the deep experience and capabilities of the Verona team.
In addition to the planned U S launch event defined trend, we progressed development of two new phase two program.
First we are developing a fixed dose combination formulation with N C pension and glycol poorly or Lama, but the trick for the maintenance treatment of C. O P D delivered via a nebulizer.
Fixed dose combination therapies are commonly used in the treatment of COPD historically in D. P. I N P M D I formulations.
Based on market research and unmet need exists for a nebulizer fixed dose combination therapy.
We believe the combination of N C pension with a lama could provide COPD patients with the first nebulize fixed dose combination that provides broncho dilation through two complementary mechanisms and also nonsteroidal anti inflammatory effects.
David S. Zaccardelli: This combination was assessed in the ENHANCE program, where NC Fentron added to a llama demonstrated robust efficacy and safety compared with placebo added to a llama upon confirmation of an adequate fixed-dose combination formulation. We plan to submit an investigational new drug application to the FDA in the second half of 2024 and plan to start a Phase 2B clinical program intending to support dose selection for Phase 3. In this program, we anticipate a dose-ranging trial in patients with COPD to identify the appropriate dose of nebulized glycoparylate in the fixed dose combination, and a second dose-ranging trial with a fixed dose combination versus individual components using a factorial design. Both trials are planned as randomized, double-blind, crossover trials in approximately 50 patients, each with lung function endpoints.
This combination was assessed in the enhanced program, where N P. Pentron added onto a llama demonstrated robust efficacy and safety compared with placebo added onto a lot.
Upon confirmation of an adequate fixed dose combination formulation.
We plan to submit an investigational new drug application to the FDA in the second half of 'twenty 'twenty four and plan to start a phase two b clinical program intended to support dose selection for phase III.
In this program, we anticipate a dose ranging trial in patients with C. O P. P to identify the appropriate dose open that'd be lifecycle pair late in the fixed dose combination.
And the second dose ranging trial with a fixed dose combination versus individual components using a factorial design.
Both trials are planned S randomized double blind crossover trials in approximately 50 patients each with lung function endpoint.
David S. Zaccardelli: Additionally, based on the clinical profile of ncfentrin observed in COPD patients, including a reduction in exacerbation rate and risk and improvement in symptoms of cough and sputum, we believe Encephentron could potentially be an effective treatment for non-cystic fibrosis bronchiectasis. This is a severe chronic condition where the airways of the lung become abnormally wide, leading to a cycle of infection, inflammation, and exacerbations that cause lung tissue damage.
Additionally, based on the clinical profile of N C pension observed in C. O P D patients, including a reduction in exacerbation rate and risk and improvement in symptoms of cough and sputum.
We believe and Pip entrant could potentially be an effective treatment for non cystic fibrosis bronchiectasis.
This is a severe chronic condition, where the airways of the lungs become abnormally white.
Leading to a cycle of infection inflammation, and exacerbations that causes lung tissue damage.
David S. Zaccardelli: The condition affects up to 500,000 patients in the U.S., and there's currently no approved therapy. Despite the lack of approved treatments, ACPs use bronchodilators, antibiotics, steroids, mucus thinners, and surgery to treat patients. We plan to commence a phase two clinical trial to assess the efficacy and safety of nebulized NC Fentron in patients with non-CF bronchiectasis in the second half of 2024. The trial is planned as a randomized, double-blind, placebo-controlled trial in approximately 180 patients with non-CF bronchiectasis over approximately 24 weeks. Endpoints including exacerbation, symptoms, and lung function will be assessed in this trial. Moving on to our finances, I am pleased to report on our strong balance in support of our commercialization activities, as well as our continued pipeline expansion. In December, we enhanced our financial flexibility through a debt financing facility providing access to up to $400 million.
The condition affects up to 500000 patients in the U S.
And there is currently no approved therapy.
Despite the lack of approved treatments a C p's use bronchodilator antibiotics steroids mucus thinners and surgery to treat patients.
We plan to commence a phase two clinical trial to assess the efficacy and safety of <unk>.
N C pension in patients with non CF bronchiectasis in the second half of 'twenty 'twenty four.
The trial is planned as a randomized double blind placebo controlled trial in approximately 180 patients with non CF bronchiectasis over approximately 24 weeks.
Endpoints, including exacerbation symptom and lung function will be assessed in this trial.
Moving onto our finances I am pleased to report on our strong balance sheet.
In support of our commercial activities.
As well as our continued pipeline expansion in December we enhanced our financial flexibility through a debt financing facility, providing access to up to $400 million.
David S. Zaccardelli: We borrowed $50 million at closing and may draw an additional $100 million upon approval of NC Fentron; future draws are available upon certain commercial milestones and other conditions. With our current cash balance and the expected proceeds available under this debt facility, we believe we are in a strong financial position as we prepare to launch NF in the U.S. and advance new clinical programs, turning to our global partnering strategy. Our development partner, Nuance Pharma, is continuing enrollment in a pivotal phase three trial of NC-Fentron for the maintenance treatment of COPD in China. As a reminder, Nuance Pharma has exclusive rights to develop and commercialize NC Fentron in Greater China and, as such, will play a key role in addressing the global need for a novel treatment for COPD.
We borrowed $50 million at closing and May draw, an additional $100 million upon approval of the country.
Future draws are available up on certain commercial milestones and other conditions.
With our current cash balance and the expected proceeds available under the debt facility.
We believe we are in a strong financial position as we prepare to launch and see pension in the U S and advance new clinical programs.
Turning to our global partnering strategy.
Belden partner Nuance pharma is continuing enrollment in our pivotal phase III trial of that and see pension for the maintenance treatment of COPD in China.
As a reminder, nuance part of my has exclusive right to develop and commercialize and deep veteran in greater China.
And as such will play a key role in addressing the global need for a novel treatment for COPD.
David S. Zaccardelli: We look forward to providing updates as Nuance's trial progresses. We are pleased with our progress in important areas, including regulatory accomplishments, commercial preparation, and new program development. I will now turn the call over to Mark to review our financial results for 2023. Thank you, Dave. We ended 2023 with $271.8 million in cash and equivalents.
We look forward to providing updates as nuance nuances trial progresses.
We are pleased with our progress in important areas, including regulatory accomplishment.
Commercial preparation and new program development.
I will now turn the call over to Marc to review our financial results for 2023.
Thank you Dave.
We ended 2023 with $271 $8 million in cash and equivalents.
Mark W. Hahn: We believe our balance sheet remains strong, and with the cash currently on hand and funding anticipated to be available under the recently closed $400 million debt facility, we expect to have sufficient runway at least through the end of 2026. And the two phase two development programs Dave discussed a few moments ago for the year ended December 31, 2023. The net loss after tax was $54.4 million, compared to a net loss after tax of $68.7 million for the prior year.
We believe our balance sheet remains strong and with the cash currently on hand and funding anticipated to be available under the recently closed $400 million debt facility, we expect to have sufficient runway at least through the end of 2026 <unk>.
Including the planned commercialization of NC pension in the U S. If approved.
And the two phase two development programs, Dave discussed a few moments ago.
For the year ended December 31, 'twenty twenty-three net.
Net loss after tax was $54 $4 million compared to a net loss after tax of $68 $7 million for the prior year.
Mark W. Hahn: This represents a loss of $0.09 per ordinary share, or $0.69 per ADS for the year, compared to a loss of $0.13 per ordinary share, or $1.04 per ADS in 2022. Research and development costs were $17.2 million for the year ended December 31, 2023, compared to the $49.3 million reported for 2022. This decrease was driven by less cost incurred on the Enhanced Phase III program, which completed study conduct and analysis early in 2023, whereas in 2022, significant costs were incurred associated with the then ongoing study conduct. Selling general and administrative expenses were $50.4 million for the year ended December 31, 2023, compared to $26.6 million reported for the prior year.
This represents a loss of nine cents per ordinary share or <unk> 69 per <unk> for the year compared to a loss of 13 cents per ordinary share or a dollar for for a D. S. In 2022.
Research and development costs were $17 $2 million.
For the year ended December 31, 'twenty twenty-three compared to the $49 $3 million reported for 2022.
This decrease was driven by less cost incurred on the enhance phase III program, which completed study conduct and analysis early in 2023.
Whereas in 2022 significant costs were incurred associated with it than the ongoing study conduct.
Selling general and administrative expenses were $54 million for the year ended December 31, 2023, compared to $26 $6 million reported for the prior year.
Operator: This increase was driven primarily by a $15.6 million increase in people-related costs as we expanded our headcount with key hires in medical affairs and commercial positions, inclusive of share-based compensation, as well as an increase of $9.7 million related to the build-out of commercial and information technology infrastructures, marketing and market development expenses, and costs associated with our medical affairs team's increased presence at local, regional, and national medical conferences. I'll now turn the call back to the operator for the Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
This increase was driven primarily by a $15 6 million dollar increase in people related costs as we expanded our head count with key hires in medical affairs, and commercial positions inclusive inclusive of share based compensation.
As well as an increase of $9 $7 million related to the Buildout of our commercial and information technology infrastructures marketing and market development expenses and costs associated with our medical affairs teams increased presence at local regional and national medical conferences.
I'll now turn the call back to the old to the operator for the Q&A.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our rock. The first question today comes from Andrew Tsai with Jeffreys. Please go ahead. Hey, thanks, good morning. Appreciate the updates. Thanks for taking our questions. So, a couple on our side.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our rock.
The first question today comes from Andrew Tsai with Jefferies.
Please go ahead.
Hey, Thanks, Good morning, I appreciate the update thanks for taking our question. So a couple on our side and I guess for the first one for the ongoing NDA review I know the FDA continues to indicate no ad com.
Andrew Tsai: And I guess for the first one for the ongoing NDA review, I know the FDA continues to indicate no adcom. But since we're basically three to four months away from the PDUFA, I'm just curious how realistic this scenario is at this juncture. Is it fair to essentially rule out a potential adcom or not yet?
But since we're basically three to four months away from the producer I'm. Just curious how realistic is this scenario at this juncture is it fair to essentially rule out a potential outcome or not yet and secondly, how has the F. D. A to all the dialogue been have they finished with a C. M C.
David S. Zaccardelli: And secondly, how has the FDA dialogue been? Have they finished with CMC inspections? And if there seems to be no real issues with the review, could an early approval be a possibility? And would you be ready to launch if that were the case? Thanks. Hi Andrew.
Actions and if there seems to be no real issues with the review.
An early approval will be a possibility and would you be ready to launch if that were the case.
Hi, Good morning, Andrew Thanks for the questions are good so let me.
David S. Zaccardelli: Thanks for the questions. Good So let me talk about the adcom. You know, I think, of course, anything is possible, but as you sort of outlined, time continues to move forward, and the FDA has communicated to us twice that they're not planning to have an adcom. So that's our operating philosophy on that. But again, let's be aware that anything can happen with regard to the review. I mean, I think I would just say it continues and is ongoing. And, you know, I think that with regard to inspections, we've had clinical inspections; I think that both our API and drug product manufacturer are facilities that are known to the agency. I would just say that BIDUFA is June 26.
Talk about the AD com.
I think of course anything is possible, but as you sort of outlined.
Time continues to move forward and the FDA has communicated to us twice.
That they're not planning to have an AD com so.
That's our operating philosophy on that but again, but be aware that that anything can happen with regard to their review I mean, I think I would just say it continues and is ongoing.
And you know I think that with regard to inspections, we've had clinical inspections.
That.
Both our API and drug product manufacturer or facilities that are known to the agency and so how they are managing inspections.
It's in their court.
And with regard to you know early approvals you know.
I would just say that the Baidu for June 26, that's a way we think about it and well adjust accordingly are we prepared to launch <unk>.
David S. Zaccardelli: That's how we think about it, and we'll adjust accordingly. Are we prepared to launch? In many ways, yes. I think that some of the things that affect that timing always at the end are, you know, the label, the final artwork, packaging, labeling, distribution aspects that happen, no matter when, you know, an approval occurs.
In many ways, yes, I think that some of the things that affect that timing always at the end are you know the label. The final you know artwork packaging labeling distribution aspects that happen no matter. When you know an approval occurs so but overall our library.
David S. Zaccardelli: So, but overall, we're very pleased with where we are with our supply chain. Okay, very good. Thanks. And maybe just one more is, let's just say you guys are approved and are launching in the second half. Hypothetically speaking, if the launch trajectory doesn't ramp up immediately, it doesn't look strong right off the bat, why would that be the case?
Pleased with where we are with our our supply chain.
Okay very good thanks, and maybe just one more is let's just say you guys are approved and are launching in second half hypothetically speaking if the launch trajectory doesn't ramp up.
Mediately It doesn't look strong right off the bat why would that be the case I'm. Just curious how you think what could go wrong and how youre thinking about these potential risks. Thank you.
David S. Zaccardelli: Just curious about what could go wrong and how you're thinking about these potential risks. Thank you. Yeah, so, you know, I'll make a general statement. I think that, based on all our work we've done to date, all the market research, the work that we have done with HCPs, we feel confident that the need is there, and that the launch will go well, in our view. But I'll ask Chris to comment on anything that is on his mind with regard to, you know, risk. Yeah, yeah, thank you, Dave. And Andrew, I appreciate the question as well. If we think about launches, what you typically see in a lot of launches that are slower challenges with market access, I think we've, we've been able to mitigate that risk, partly due to the channel that MC Fentron will flow through being that it is primarily a Medicare Part B medical reimbursement pathway.
Yeah, So I'll make a general statement I think that you know I think based on all our work we've done to date all the market research. The work that we have done with Hcp's Ah Yeah, we feel confident that the need is there.
And that the the launch will go well.
In our view.
But I'll I'll ask Chris to comment on anything that's on his mind with regard to risk.
Yeah, Yeah. Thank you, Dave and Andrew I appreciate the question as well if we think about launches what you typically see in a lot of launches that are slow or challenges with market access I think we've we've been able to mitigate that risk partly due to the channel that empty pentron will a flow through being that they met primarily.
Medicare part D medical reimbursement pathway, you know that risk of slower uptake of new product launches is not essentially eliminated but it is mitigated by the pathway of reimbursement of N. C. Pentron, you know and I think internally we've done a very good job of ensuring that we understand that pathway.
David S. Zaccardelli: You know, that risk of slower uptake of new product launches is not essentially eliminated, but it is mitigated by the pathway of reimbursement for MC Fentron. You know, and I think internally, we've done a very good job of ensuring that we understand that pathway; our limited distribution network that we talked about in the October meeting allows those specialty DME accredited pharmacies to really understand and adjudicate prescriptions the appropriate way. And we think, you know, when we think about how MC Fentron's launch would be versus potentially other launches that people are familiar with, that market access dynamic is something that is always in the back of your mind.
Our limited a distribution network that we talked about at the October meeting allows for those specialty D. M. A accredited pharmacies to really understand and adjudicate prescriptions the appropriate way and.
And we think you know when we think about how N P veterans launch would be versus potentially other launches that people are familiar with that that market access dynamic. It is something that always is in the back of your mind, but because of the reimbursement channel. We believe that etsy Pentron AR will flow through the channel whenever appropriate fashion ended up.
Christopher Martin: But because of the reimbursement channel, we believe that MC Fentron will flow through the channel in an appropriate fashion and in a fashion that meets what we've seen in market research, which is physicians' willingness to add MC Fentron across the spectrum in a variety of patients who remain persistently symptomatic. That dynamic, I think, is very favorable for us as we move forward into launch. Great, thanks again. The next question comes from Yasmeen Rahimi with Piper Sandler. Please go ahead. Good morning, team.
And that meets what we've seen in market research, which is physicians willingness to add anti French right across the spectrum and a variety of patients who remain persistently symptomatic.
That dynamic I think is very favorable for us as we move forward into launch.
Great. Thanks again.
The next question comes from he asked me Rami with Piper Sandler. Please go ahead.
Good morning team and thank you so much for all your.
Yasmeen Rahimi: And thank you so much for all your thoughtful comments. I guess the first question is, Have you started the discussion with the agency in regards to label negotiations? What is your perspective on what your ask is in regards to the label? That's part one.
Pottsville comment a few questions for you I guess my first question is.
Have you started the discussion with the agency in regards to our label the label negotiations.
What is your perspective on.
What you're asking is it in regards to the label that that's part one.
David S. Zaccardelli: Part two is, as we go into June 26, obviously, once the label is available, you'll host a call. Could you tell us if you're gonna be in a position to also share pricing at that point and maybe the... The pricing range that you guys have given us has been quite wide, so we'd love to get your perspective on how you're thinking about it and how payers are perceiving that range. And then the third question is for Mark, which is, you know, how should we be thinking about OPEX this year and next year as you're building a commercial infrastructure? And thank you again, team, for allowing me to ask these three-part questions. Good morning.
To ease them as we go into June 'twenty back.
Obviously one.
Once the label is available you will host a call could you tell us if you're going to be able to be in a position to also share pricing.
At that junction and maybe dead there.
The pricing range that you guys have given us and it's been quite why that Joe would love to get your perspective, how you're thinking about it and how payers are perceiving that range.
And then the third question is for Mark.
Which is you know how should we be thinking about opex over this year and next year as you're building a commercial infrastructure and thank you again for allowing me to ask these three part questions.
Hey, good morning, Yeah. Thanks, Thanks for that I'll I'll sort of I'll start with the first one with regard to labeling.
David S. Zaccardelli: Yes, thanks. Thanks for that. I'll start with the first one with regard to labeling.
David S. Zaccardelli: Again, we won't really comment on all the reviews back and forth with the agency. But I would point out that this is, you know, fairly early in the process with maybe around four months or so to go. And so, from my experience in past reviews, we're about where we need to be. But, of course, they're all different in their own right.
Again, we won't really comment on all of the review a back and forth with the agency I would point out that it you know it's fairly early still in the process with the made around four months or so to go and so I think that from my experience in past reviews.
We're about where we need to be but of course, they're all different in their own right, but I think that it is a little early in the process right now and on the labeling and things.
David S. Zaccardelli: But I think that it is a little early in the process right now and on the labeling end of things. And with regard to what's in the label, I mean, I think that we have put forward many of the aspects that I think everyone knows with regard to the indication for the maintenance treatment of COPD. And, of course, we represented comprehensively the results from the clinical trials, of course, with the emphasis on the enhanced program and, of course, all the other important elements that you'd expect in a label from CMC to non-clinical that are included. So I think our submission was comprehensive in nature. With regard to pricing, you know, yes, I think that with approval, we'll be well versed in how we're pricing NCFentron, but I'll ask Chris just to comment on the range of pricing. Yeah, thanks.
And with a weak and with regard to what's in the label I mean, I think that we.
Put forward many of the aspects that I think everyone knows with regard to the indication for the maintenance treatment of C. O P D and of course, we represented comprehensively.
<unk> from the clinical trials.
Of course with the emphasis from the enhanced.
Program and of course, all the other important element that you would expect in a label from CMC to non clinical that are that are included so I think our our submission was with comprehensive in.
In nature.
With regard to the pricing are you know, yes, I think that with the with approval will have or will be well versed in how we're pricing and defend trend.
But I'll ask Chris just to comment on the range of pricing.
Yeah. Thanks, Thanks, Dave and I appreciate the question as well when it when it comes to pricing. We have we have provided a fairly large range there.
Christopher Martin: Thanks, Dave and Yas. I appreciate the question as well. When it comes to pricing, we have provided a fairly large range there. I think, you know, when we think about the market today, we know that the current nebulized products like Upelri are somewhere in the $1,400 a month range. And then we also use Dupixen upwards of $3,800 a month as kind of an upper bound on pricing. The other thing that we have done from a work standpoint is understand kind of the value that NC Phentron brings to the marketplace, to patients, and to physicians in the system. We believe that value is substantial.
I think you know when we think about the market today, we know that the current nebulize products like <unk> are somewhere in the 1400 dollar a month range and then we also use do picks and upwards of $3800 a month as kind of an upper bound of pricing.
The other thing that we have done from a work standpoint is understand kind of the value that empty pantry and brings to the marketplace to patients to physicians in the system.
We believe that value is substantial you know when we think about exacerbation data lung function data symptom improvement data and a benefit risk profile that Dave described numerous times, we believe that value is very high and so when we've had discussions with primarily well on them.
Christopher Martin: You know, when we think about exacerbation data, lung function data, symptom improvement data, and a benefit risk profile that Dave's described numerous times, we believe that value is very high. And so when we've had discussions with payers, primarily on the Medicare Advantage side with those payers, what they've told us is that they expect NC Phentron to be a premium over the current nebulized products. Remember, the current nebulized products are single LAMAs or LABAs.
Medicare advantage side with with those payers, what they've told us they expect empty pantry to be a premium to the current nebulize products remember the current nebulizer products are single lamas are a LABA. So the profile events. He pen friend with Broncho dilation nonsteroidal anti inflammatory is very different.
Christopher Martin: The profile of NC Phentron with bronchodilation, non-steroidal, anti-inflammatory properties is very different. Therefore, we believe we do have some pricing flexibility based on the value NC Phentron brings to the marketplace. I think we are also looking at other dynamics that are in play, including IR, the Inflation Reduction Act, to ensure that we're pricing NC Phentron appropriate to the value that it provides patients, physicians, and the system. And as Dave said, we'll be in a very good place come PDUFA to be able to provide specifics around that. I'll take the OPEX question. So, yes, the OPEX for Q4 was about $19 million, a little over $19 million.
So we believe we do have some pricing flexibility based on the the value Anticenter brings to the marketplace. I think we are also looking at other dynamics that are in play, including higher and in place and reduction act to ensure that we're we're pricing empty centre and appropriate to the value that it provides the patient and the physician.
<unk> in the system and as Dave said it will be in a very good place come come up Hadoop would it be able to provide specifics around that.
Martha Mark Opex was yep Yep I'll take the Opex question. So yeah. The Opex for Q4 was about $19 million little over $19 million.
Mark W. Hahn: I think you can expect that, over the course of 2024, to tick up sequentially with a couple of caveats and get to maybe a little bit more than double where it is today by the end of the year. Along the way, there'll be a couple of bumps in the road. One in, upon approval, we have a five million pound milestone payment that's due to LIGAND, so that'll be an incremental one-time expense in Q2, presumably. And then upon launch... We have a $15 million milestone payment due to Ligand as well. So another one-time payment expense during the period of launch.
I think you can expect that over the <unk>.
Course of 'twenty 'twenty four to tick up sequentially.
Couple of caveats and get to maybe a little bit more than double where it is today by the end of the year.
Along the way there'll be a couple of a couple of bumps and spend one is.
Upon approval, we have a 5 million pound a milestone payment that's due to ligand. So that'll be an incremental one time expense in Q2, presumably and then upon launch.
We have a 15 million dollar milestone.
Milestone payments due to ligand as well so another one time painful.
Expensed in that in the period of March.
Mark W. Hahn: Thank you so much, Mark. Thanks, guys. The next question comes from Caroline Pocher with Wedbush Securities. Please go ahead. Hi, good morning. This is Caroline on behalf of Andreas.
Thank you so much mark.
Thanks, Yes.
The next question comes from Caroline Codeshare with Wedbush Securities. Please go ahead.
Hi, Good morning, this is Caroline.
Caroline Kimberly Pocher: And thanks for taking our questions. So just one for us. We noticed the Dupixent SBLA for COPD has a PDUFA date of June 27, which happens to be the day after ENSA Venturin's PDUFA date. Even though Dupixent can only be used in a subset of COPD patients and ENSA Venturin more broadly, does this proximity and potential approval and launch change anything about your commercial strategy? I think Hi, good morning, Caroline.
And thanks for taking our questions. So just one for US we noticed a duplex and F B L. A for COPD.
The date of June 27, which happens to be the day after and central produced today.
Even though just Pepsi and can only be used in a subset of COPD patients in the ankle Sunshine more broadly does this proximity and potential approval and launch change anything about your commercial strategy.
I think hi, good morning, Caroline and I think the short answer is no, but I think Oh. So you know we noted that and I think it's good for C. O P D in general and the attention. This.
David S. Zaccardelli: I think the short answer is no. I also think, you know, we noted that, and I think it's good for COPD in general. And the attention this severe disease is getting. And I think it's great for the patients that Dupixan applies to as well, as you mentioned, a fairly small subset of the entire COPD population in the US that's under treatment. But it doesn't change our view of NC-Ventrin, how NC-Ventrin would be utilized in patients who are symptomatic across the spectrum of the disease. And for that matter, you know, I don't know if there's anything that really conflicts with NC-Ventrin and Dupixan from a pharmacologic basis as well. So we see NC-Ventrin's application the same as we did before. Okay, awesome. Thank you so much and congrats on all the progress. Great, thanks so much.
Severe disease is getting and I think it's great for the patients that.
Depicts and applies to as well as you mentioned is a fairly small subset of the entire COPD population in the U S sits under treatment.
But it doesn't change our view of events, you've been trend debenture and would be utilized.
In patients who are symptomatic across the spectrum of the disease.
And and and for that matter, Yeah, I don't know if there's anything that really conflicts with.
N C central and do pick sent from a pharmacology basis as well so we see it and defend trends application the same as we did before.
Okay awesome. Thank you so much and congrats on all the progress.
Great. Thanks, so much.
Operator: The next question comes from Xinwei An with Canaccord Genuity. Please go ahead. Hi, good morning. This is Xinwei Ang from Canaccord Genuity speaking.
The next question comes from Sydney way and with Canaccord Genuity. Please go ahead.
Hi.
Does this seem like Oh for Edwards and sort of as a follow up question. After a D. Do you pick sense, Hawaii Oh are.
Xinwei An: Sort of a follow-up question. After the PICSENCH one, we would like to ask about physicians' mindshare. So based on the feedback that you have collected from prescribers, do you maybe project it, or do you foresee if they would have a preference in how they would use different therapies? Thank you. Yes. Thank you so much for the question. Maybe I'll have Chris comment on that in general.
We would like to ask about just said, Russia is why my sure. So based on your feedback, but you'll have collected from the prescribers do you maybe project or do you foresee.
They would have a preference.
How they would use different therapy. Thank you.
Yeah. So thank you so much for the question, maybe I'll have Chris comment on on that in general.
David S. Zaccardelli: Thanks, Dave. When we look at our market research, I mean, the market research that we've done is extraordinarily extensive. I think we're close to well over a thousand physicians surveyed across all specialties, both pulmonology and primary care, and we've also spent a lot of focus on nurse practitioners and PAs.
Thanks.
Thanks, Dave when we look when we look at our market research I mean, the market research that we've done is extraordinarily expensive.
We're close to well over a thousand physicians surveyed across all specialties are both Pulmonology primary care. We've also spent a lot of focus on nurse practitioners and P. A's.
Christopher Martin: What we see in that market research is, I'm going to boil it down to really two things. One is that we see consistency in the unmet need that exists, and we see this both from patients and physicians. We see that patients are complaining, as Dave described in his opening comments, of persistent symptoms. At least half of these patients are having persistent symptoms regardless of therapy, and then we also hear from physicians that when a patient is persistently symptomatic, they lack options or new ways to treat these patients.
What we see in that market researches I'm going to boil it down to really two things. One is we see consistency and the unmet need that exists and we see this both from patients and physicians, we see that patients are complaining as Dave described in his opening comments of persistent symptoms at least half of these patients.
Having persistent symptoms regardless of therapy and then we also hear from the physicians when a patient is persistently symptomatic they lack options or new ways to treat these patients what they're excited about and our market research is how broad of a utilization MTF hunter and can have a they see that.
Christopher Martin: What they're excited about in our market research is how broad of a utilization NCFentron can have. They see this drug in a very wide variety of places. And they see it potentially as an add-on to all therapeutic classes that exist today when a patient remains persistently symptomatic. But they also continue to express to us why this drug couldn't possibly be used on its own and maybe push ICS and the steroids to a later line therapy. You know, across all of our research, what we see is that, you know, the adoption and the willingness to try NCFentron are very high.
Mark this drug in a very.
Wide variety of places and they see it as you know potentially as an add on to all therapeutic classes that exist today. When a patient remained persistently symptoms that are symptomatic, but they also continue to express to US why this drug could be potentially used on its own and maybe push Ics and the steroid.
To a later line therapy, you know across all of our research what we see is that you know the adoption and the willingness to try and keep entry is very high I think when we when we did we presented in October we talked about almost 90% of the physician survey talking about adopting the frontrunner within the first.
Christopher Martin: I think when we presented in October, we talked about almost 90% of the physicians surveyed talking about adopting NCFentron within the first 12 months. That doesn't change with, you know, the entry of Dupixen or even potentially other products that are in the pipeline. Because foundationally, what NCFentron provides them is the first novel mechanism that works broadly across all their patient populations.
12 months that doesn't change our with you know entry of do picks and or even a potential either other products that are in the pipeline because foundation really what MTF and can provide to them is the first novel mechanism that works broadly across all of their patient population, regardless of background therapy, regardless of you sent a pill counts.
Christopher Martin: Regardless of background therapy, regardless of eosinophil counts, it allows them a new foundational therapy that their patients and doctors desire to have within their practice. Okay, great. Thank you. The next question comes from Julie with True Securities. Please go ahead. Hi, good day, and congrats on the quarter. And thanks for taking the question. What are your expectations for this fixed-dose nebulized encyclopedic lymphoma in the COPD space? Are there any specific subpopulations being unlocked with this combo? Any color would be helpful.
It allows them a really have found a new foundational therapy that they're their patients and the doctors desire to have within their practice.
Okay, great. Thank you.
The next question comes from Julie Yates chose Securities. Please go ahead.
Hi, Good day, and congrats on the quarter and thanks for taking our.
Question.
What are your expectations for these fixed dose maybe life incidents in plus llama.
C O P. D space are there any other specific subpopulations being unlocked with this combo any color would be helpful. Thank you.
Unknown Caller: Thank you. Thanks so much for the question. I'll just make a brief comment and then ask Dr. Tara Rheault for a comment as well. I think that our view is that it's a natural progression with regard to products for the treatment of COPD. You may know that combination products are very commonly used when different bronchodilators and anti-inflammatories are combined, and combining encephentron with Elama, I think, makes natural sense.
Thanks, So much for the question I'll just make a brief comment and then ask a doctor taro to comment as well I think that our our view is that it's a natural progression are with regard to our products for the treatment and C. O P. D. As you may know that.
Combination.
<unk> products are very commonly used and combining different bronchodilator.
Clamatorial together.
And combining and see that trend with a llama.
I think makes natural sense I think our view is that it.
David S. Zaccardelli: I think our view is that it would address a fairly broad population with COPD as well as this is a typical treatment. And with that, I'll turn it over to Tara to make any comments. I think one of the real important features of the fixed-dose combination that we're preparing is that you've got ensicentrin with bronchodilatory and anti-inflammatory pharmacology combined with another bronchodilator. So you have essentially two bronchodilator mechanisms and an anti-inflammatory mechanism that's non-steroidal, essentially giving you the profile of a triple in this fixed-dose
Would address Oh fairly broad population in COPD as well as just the typical treatment and with that I'll turn it over to Tara to make any comments.
Sure I think one of the real important features of the fixed dose combination that we're preparing is that you've got into central with Franco daily Tory and anti inflammatory pharmacology combined with another bronchodilator. So you have essentially two bronchodilator mechanism and an anti inflammatory.
Tori mechanism, that's non steroidal essentially giving you the profile of a triple Hum in the fixed dose combination. So we think it will be a very important alternative to triple therapy for quite a few patients.
Tara Rheault: So we think it will be a very important alternative to triple therapy for quite a few patients. Thank you. And I'm sorry; I forgot to mention this was maybe on for June.
Thank you.
Oh, sorry, I forgot to mention this goes maybe on for Joel Thanks for taking care of course.
Unknown Caller: Thanks for taking that question. Thanks so much. As a reminder, if you have a question, please press stars and one to be added to the queue. The next question comes from Tom Shrader with CTIG. Please go ahead. Good morning. Good luck on the PDUFA date. We've been waiting for this forever.
Thanks, so much.
As a reminder, if you have a question. Please press star then one to be joined into the queue.
The next question comes from Tom Shrader with BP Angela. Please go ahead.
Good morning, Good luck on the Purdue for Dave we've been waiting for this forever [laughter].
But the more I looked out [laughter] I have a follow up on the mixed product you're doing an awful lot of dosing when you've already shown it's safe and efficacious.
Thomas Eugene Shrader: I have a follow-up question on the mixed product. You're doing an awful lot of dosing when, you know, you've already shown it's safe and efficacious at doses. Are you trying to, in the hope that this would really be a different product than the combination and that you would maybe get at some of the synergies that you saw in your early data?
Doses are you trying to do.
Hope that this would really be a different product than the combination and that you would maybe get at some of the synergies that you saw in your early data.
Tara Rheault: Thanks. Thanks so much, Tom, for that question. Tara, if you'd like to comment on our strategy for dose selection and exploring that in these trials. Sure, yep, so this is a new product, it's a new formulation, that's a requirement in order to feasibly combine Ensofentrin and Andolama. And so. What was the second part of your question again? I'm sorry. Well, there are some interesting synergies between encephalopatrins and llamas in the early preclinical data about rapidity of action. And the question is, are you hoping to capture some of that? Oh, of course, you know that early data did show some synergistic effects with enzofentrin and glycopyrrolate and other muscarinic antagonists. And that certainly was mirrored in the phase three data we saw on top of long-acting muscarinic antagonists. Okay, and if I could follow up quickly on Bronchi Exosys, would you try to develop a second product? Would it look different than the COPD product? Because you're kind of in an orphan indication, so the price points might be very different.
Yeah. Thanks, Thanks, so much Tom for that question, a tear up you'd like to comment on our strategy on the dose selection and exploring that and he stopped trial.
Sure Yeah. So this is a new product at the new formulation NASA requirements.
In order to feasibly combine and sustained trend and and Atlanta.
And so.
Let's see.
What was the second part of your question that well then there's some interesting synergies between <unk> and Lam was in the early preclinical data about rapidity of action and the question is are you hoping to capture some of that.
Oh of course that early data did show some synergistic effects with ensign and training like pay related and other muscarinic antagonist and that certainly was mirrored in the phase III data, we saw on top of long acting muscarinic antagonist.
Okay, and if I could follow up quickly on bronchiectasis. It would that would you try to develop a second product.
Look different than the C O P D product because you're kind of in the you're kind of in an orphan indication so the price points might be very different.
David S. Zaccardelli: Yeah, no, I think, Tom, our strategy is actually to progress with the current formulation. Of course, that's very efficient, as you can imagine. And I think, as an incremental indication, while it's not technically an orphan, I appreciate that the number is closer to an orphan than not, we're addressing it as just another indication, which is great in helping patients, that has defense in its current formulation. Okay, great. And again, good luck. Thanks so much.
Yeah, No I think Tom our strategy.
It's actually to progress with the current formulation of course, that's very efficient as you can imagine and I think is an incremental indication wow, it's not technically an orphan I appreciate that the number is closer orphan.
It.
We are addressing is just another indication which is great.
Defense defense and its current formulation compares.
Okay, Great and again good luck.
Thanks, so much.
David S. Zaccardelli: This concludes our question and answer session. I would like to turn the conference back over to David Zaccardelli for any closing remarks. Great, thank you everyone for your questions today. And, in addition, I'd like to thank our shareholders for their continued support and the dedicated and talented team at Verona for their work and commitment. And we look forward to updating you on our progress over the next few months. Have a great day! The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. BF-WATCH TV 2021
This concludes our question and answer session I would like to turn the conference back over to David Daly for any closing remarks.
Great. Thank you everyone for your questions today and in addition, I'd like to thank our shareholders for their continued support and our dedicated and talented team at Verona for their work and commitment and we look forward to updating you on our progress over the next few months.
A great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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