Q4 2023 Apellis Pharmaceuticals Inc Earnings Call
Operator: All of them. Thank you. Thank you. Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Apellis Pharmaceuticals fourth quarter 2023 earnings conference. At this time, all participants are in a listen-only mode.
Yeah.
Speaker Change: Good morning, ladies and gentlemen, thank you for standing by and welcome to the a palace Pharmaceuticals fourth 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 to ask a question during the specialty depressed Starwood and one on your telephone you will then hear an automated message device in your hand is raised to withdraw your question. Please.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised.
Operator: To withdraw your question, please press star 11 again. Please be advised, today's conference is being recorded. I will now hand the conference over to your speaker host, Meredith Kyer, Senior Vice President, Investor Relations and Strategic Finance. Please go ahead.
Speaker Change: Press Star one again, please be advised today's conference is being recorded I would now.
Speaker Change: I'll hand, the conference over to your Speaker host Meredith Kaya Senior Vice President Investor Relations and strategic Finance. Please go ahead.
Meredith Kyer: Good morning, and thank you for joining us to discuss Apellis's fourth quarter and full year 2023 financial results. With me on the call are Co-Founder and Chief Executive Officer, Dr. Cedric Francois, Chief Operating Officer, Adam Townsend, Chief Medical Officer, Dr. Caroline Baumol, and Chief Financial Officer, Tim Sullivan. Before we begin, let me point out that we will be making four forward-looking statements that are based on our current expectations and beliefs. These 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 views. Now, I'll turn the call over to Cedric.
Meredith Kaya: Good morning, and thank you for joining us to discuss the palaces fourth quarter and full year 2023 financial result.
Meredith Kaya: With me on the call.
Meredith Kaya: And Chief Executive Officer, Dr. Cedric Francois Chief operating Officer, Adam Townsend.
Meredith Kaya: Medical officers, Dr. Carolyn bottles, and Chief Financial Officer, Jim Sullivan.
Meredith Kaya: Before we begin let me point out that we will be making forward looking statements that are based on our current expectations. These.
Meredith Kaya: These statements are subject to certain risks and uncertainties.
Meredith Kaya: Results may differ materially I encourage you to consult the risk factors discussed in our SEC filings for additional detail.
Meredith Kaya: Now I'll turn the call over to Cedric.
Cedric Francois: Thank you, Meredith, and thank you all for joining us this morning. As I reflect on this past year, I am extremely proud of our team and all of our achievements in 2023. Our two commercial products, Saipori and Ambavirin, are making meaningful differences for patients. The year ended with CY4V3 in a very strong position, and we remain encouraged by the continued uptake and high compliance rates for empadhelin and PNA. We also have multiple positive data readouts, including up to three years of efficacy and safety data from both of our approved therapies. While 2023 certainly had its challenges, our accomplishments and our resilience position as well as for continued execution in 2024 have to deliver on our mission for patients now and in the future. Let me share some details on this past year and our priorities for 2024, beginning with Facebook.
Cedric Francois: Thank you.
Cedric Francois: And thank you all for joining us this morning.
Cedric Francois: Does that reflect on this past year I am extremely proud of our team and all of our achievements in 2023.
Cedric Francois: Two commercial products <unk>.
Cedric Francois: But they are making meaningful difference for patients.
Cedric Francois: The year ended with pay for being a very strong position and we remain encouraged by the continued uptake and high compliance rates.
Cedric Francois: Units.
Cedric Francois: We also had multiple positive data readouts, including up to three years.
Cedric Francois: Safety data from our approved therapies.
Cedric Francois: While 2023, certainly had its challenges our accomplishments and our resilience position us well for continued execution in 2024 as to do different on our mission foundations now.
Cedric Francois: Sure.
Speaker Change: Let me share some details of this past year and our priorities for 2024.
Speaker Change: Beginning with thanks Tobey.
Cedric Francois: We recently celebrated SIFOBRI's one-year approval anniversary, and what a year it has been. The launch has exceeded our expectations, even with the unexpected challenges we faced last summer. More than 200,000 Cyfo-3 doses have now been distributed to physician practices since launch through mid-February, and we estimate that approximately 215,000 Cyfo-3 injections have been administered to patients through mid-February, including our Phase III clinical trial. These numbers underscore the retina community's confidence in the benefits of stiflurin and the central role it plays in improving patients' lives. And importantly, based on these numbers, the risk of developing retinovasculitis remains rare at an estimated rate of approximately 0.01%.
Speaker Change: We recently celebrated sexual reached one year approval anniversary.
Speaker Change: And what a year it has been.
Speaker Change: The launch has exceeded our expectations, even with the unexpected challenges we faced last summer.
Speaker Change: More than 200000 square foot reduces that now be distributed to physician practices since launch through mid February and we estimate that approximately 215000 central Reinjection has been administered to patients.
Speaker Change: February including Rfps preclinical trials.
Speaker Change: These numbers underscore the retina is confidence in the benefits of state footprint.
Speaker Change: Interim role it plays in improving patients lives.
Speaker Change: And importantly, based on these numbers the risk of developing retinal vasculitis remains rare at an estimated rate of approximately 0.0% to 1% or injection.
Cedric Francois: In the fourth quarter, we reported $114 million in CIFOR-E U.S. net product revenue. We achieved $275 million in CIFO-RE revenues for the full year. While we have experienced modest seasonality in the first quarter so far, CyphoVree continues to show meaningful growth, and we look forward to bringing it to more and more patients throughout the year. In 2024, our priorities with Cypho-V are to maximize access to patients in need in the U.S. and to bring Cypho-V to patients with GA worldwide. Key to these are our commercial and medical activities, including building on the relationships we've already established in the retina community. Given our global expansion goal with Cyphor Green, let me comment on the European Union. As you know, we received a negative opinion by the Committee of Medicinal Products for Human Use, or CHMP, for the marketing application of PSY-CoV-3 in the EU.
Speaker Change: In the fourth quarter, we reported $114 million.
Speaker Change: <unk> U S net product revenue.
Speaker Change: We achieved $275 million and set for the revenues for the school year.
Speaker Change: While we have experienced modest seasonality in the first quarter. So far so poorly continues to show meaningful growth and we look forward to bringing it to more and more patients throughout the year.
Speaker Change: In 2024, our priorities with <unk> and maximize access to patients in need in the U S.
Speaker Change: It resets will recruit patients with <unk> worldwide.
Speaker Change: These are commercial and medical activities.
Speaker Change: <unk> building on the relationships, we've already established in the retina community.
Speaker Change: Given the RF global expansion Globex platform.
Let me comment on the European region.
Speaker Change: As you know we received a negative opinion by the committee of medicinal products for human use or <unk>.
Speaker Change: Further marketing application of <unk> in the EU.
Cedric Francois: While this is disappointing, we remain steps ahead in our efforts, given the more than two and a half million GA patients in need of treatment across Europe. The feedback and support we have received from the physician and patient communities in Europe has been extraordinary. We have been informed of several letters sent to EMEA from multiple European RETS networks, highlighting the need for new treatments and how important psychotherapy would be for patients. As such, we are initiating a re-examination of our application, which includes revising our dossier to ensure that key questions are addressed. We expect a final opinion in connection with this re-examination to be issued at an upcoming CHMP meeting in the second quarter. If positive, a decision by the European Commission is anticipated in the third quarter.
Speaker Change: While this is disappointing we remain steadfast in our efforts get into more than two as a help millions of patients in need of treatment across euro.
Speaker Change: The feedback and support we have received for statutory profit physician and patient communities and Europe has been extraordinary we.
Speaker Change: We have been informed of several measures since two EMEA for multiple European retina organization, highlighting the need for new treatments and how it enforces faithful rate would be for patients.
Speaker Change: As such we are.
Speaker Change: Initiating a reexamination of our application, which includes revising our dossier to ensure that key questions are addressed.
Speaker Change: We expect a final opinion in connection with this reexamination to be issued at an upcoming <unk> meeting in the second quarter.
Speaker Change: It positive a decision by the European Commission is anticipated in the third quarter.
Cedric Francois: To be clear, and as we've said many times before, this is not going to be easy. It will be an uphill battle, and we do not know the likelihood of success at this stage. But we strongly believe in our data, including analyses that many experts agree demonstrate a functional benefit with sex organ treatment, and we will continue to work closely with the FCHMP and the retina community throughout the process. Turning to Empire Venting, we generated $24 million in fourth-quarter U.S. net product revenue and $91 million for the full year. The El Paveli Injector, an innovative and first-of-its-kind high-tech volume injector, was approved and launched last fall.
Speaker Change: To be clear and as we've said many times before this is not going to be easy.
Speaker Change: It will be an uphill battle and we do not know the likelihood of success at this stage.
Speaker Change: But we strongly believe in our data, including analogy that many experts agreed demonstrated <unk> benefit.
Speaker Change: Okay.
Speaker Change: We will continue to work closely with EMC and synergies and the retina community throughout the process.
Speaker Change: Turning to everybody.
Speaker Change: We generated $24 million in the fourth quarter U S net product revenue and $91 million for the full year.
Speaker Change: But any injecting an innovative first of its kind <unk> volume injector was approved and launched last fall.
Cedric Francois: We've been very pleased with the feedback and adoptions so far, and in 2024, we will remain focused on maximizing our market position in PNH and also look forward to the phase 3 data readouts for systemic maxillococcus in C3G and ICM-BGN, a very rare and debilitating kidney disease. Our Phase III Value Study is fully enrolled, and we expect top-line data from this study mid-year. Over the past couple of years, we've been very focused on our commercial products and new launches, but we have other exciting earlier stage programs at hand. Let me shift to our fourth priority for 2024, which is to progress our early RNV pipeline with an eye to the long term. In addition to the above initiatives in C3G and ICMPGN, we are focused on our siRNA program, APL3007, which is now in a phase one dose escalation study with data expected later this year. Additionally, we are advancing the gene editing program with BEAM, on which we also expect to share more this year.
Speaker Change: We've been very pleased with the feedback and adoption so far.
Speaker Change: And in 2024, we will remain focused on maximizing our market position in <unk> and also look forward to the phase III data readout for systemic fixes that core value of <unk> and the ICM AGN, two rare and debilitating kidney diseases.
Speaker Change: Our phase III values study is fully enrolled and we expect top line data from this study mid year.
Speaker Change: Over the past couple of years, we've been very focused on our commercial products and new launches, but we have other exciting earlier stage programs advancing.
Speaker Change: Let me shift to our fourth priority for 2024, which is to progress our early R&D pipeline with an eye to the long term.
Speaker Change: In addition to the above any initiatives in <unk>, yet we are focused on our SA RNA program APL 3007, which is now in a phase one dose escalation study with data expected later this year.
Speaker Change: Additionally, we are advancing the gene editing program it team on which we also expect to share more this year.
Adam: We are entering 2024 from a position of strength with an unwavering commitment to address unmet needs for patients and to create even greater value for our shareholders. And with that, I will now turn it over to Adam to discuss our commercial and medical affairs. Thank you, Cedric.
Speaker Change: We are entering 2024 from a position of strength with an unwavering commitment to address unmet needs for patients and to create even greater value for our shareholders.
Speaker Change: And with that I will now turn it over to Adam to discuss our commercial and medical affairs activities.
Adam Townsend: Thank you Patrick it was a big year commercially for our pellets with the launch of <unk> and the commercialization of <unk> and <unk> edge.
Adam: It was a big year commercially for Apellis, with the launch of Cyfobrine GA and the commercialization of Empavelli in P&A. Starting with Cyfobrine, in the fourth quarter, we delivered approximately 62,000 doses to physician practices, including 55,000 commercial vials and 6,400 samples. Generating $114 million in U.S. net product revenue. This strong growth underscores the rebound in weekly demand that began in August of 2023. Our execution was driven by meaningful engagement with our key stakeholders.
Adam Townsend: In this type of rate in the fourth quarter, we delivered approximately 62000 doses to physician practices, including 55000, commercial vials and 6400 samples generating $114 million in U S net product revenue.
Adam Townsend: This strong growth underscores the rebound in weekly demand that began in August of 2023.
Adam Townsend: Our execution was driven by meaningful engagement with our key stakeholders.
Adam: Physicians, patients, and payers. We continue to see weekly orders coming from both new and existing physician practices, with a double-digit number of new sites ordering Siphovery every week since launch. Patients are motivated to seek treatment, and the vast majority of physicians are treating their patients with cyfovir every six to eight weeks.
Adam Townsend: Patients patients and Payors.
Adam Townsend: We continue to see weekly orders coming from both new and existing physician practices with a double digit number of new sites ordering five five rate every week since launch.
Adam Townsend: Patients are motivated to seek treatment and the vast majority of physicians are treating that patients with FIFO rates every six to eight weeks.
Adam: reinforce how much doctors and patients appreciate a more flexible dosing regimen, and we continue to have robust payer coverage. We are encouraged by the demand growth we are seeing in the first quarter so far. January and February have been two of our biggest months since...
Adam Townsend: Reinforcing how much doctors and patients appreciate a more flexible dosing regimen.
Adam Townsend: And we continue to have robust payer coverage.
Adam Townsend: We are encouraged by the demand growth we are seeing in the first quarter. So far January and February have been two of our biggest months since launch however.
Adam: However, as expected, we did see some seasonality in January as a result of Medicare recertifications, as well as weather delays affecting doctor visits and product shipments. These seasonality trends are consistent with what has been seen with some of the anti-VEGF products in the wet AMD market. Today, Cyfovi is the number one chosen GA treatment, with a current market share of approximately 90%. At launch, we estimated that there were 1 million patients with GA in the US. Now that treatments are available for GA patients, we are learning that this population may be even bigger than we expected, with estimates suggesting there may be up to 1.5 million patients. Going forward, we expect to continue to build this market and maintain our market-leading position.
Adam Townsend: However, as expected we did see some seasonality in January as a result of Medicare recertification as well as weather delays affecting doctor visits and product shipments. These.
Adam Townsend: <unk> seasonality trends are consistent with what has been seen with some of the anti VEGF products in the wet AMD market.
Adam Townsend: Today <unk> is the number one chose NCA treatment with a current market share of approximately 90%.
Adam Townsend: At launch we estimated that there were 1 million patients with <unk> in the U S.
Adam Townsend: Now the treatments are available for gea patients. We're learning in this population may be even bigger than we expected with estimates, suggesting that maybe up to one 5 million patients.
Adam Townsend: Going forward.
Adam Townsend: We expect to continue to build this market and maintain our market leading position.
Adam: We will be laser focused on executing our strategy, highlighting the key advantages of SIFO, which include increasing effects over time with more than 40% reductions in GA lesion growth demonstrated in our GALE extension study. Extensive experience with approximately 215,000 injections estimated to have been administered between our clinical trials and real-world experience, and more vision safe for patients, meaning treatment with syphobry has been shown to preserve visual function longer in multiple protoc analyses Now to Ed Merveille. The positive trends witnessed across the key leading indicators for this patient population have continued through the end of 2023. In the fourth quarter, Amper Valley generated approximately $24 million in U.S. net product sales, resulting in a total of $91 million for the full year.
Adam Townsend: We will be laser focused on executing our strategy highlighting the key advantages of SIFI.
Adam Townsend: Which include increasing effects over time with more than 40% reductions in G&A lesion growth demonstrated in our Gale extension study.
Adam Townsend: <unk> extensive experience with approximately 215000 injections estimated to have been administered between our clinical trials and real world experience.
Adam Townsend: Adding more patients safe for patients, meaning treatment with FIFO rate has been shown to Chris.
Adam Townsend: Visual function longer in multiple post hoc analyses.
Adam Townsend: Now to add the value.
Adam Townsend: The positive trends witnessed across the key leading indicators for this patient population have continued through the end of 2023.
Adam Townsend: In the fourth quarter <unk> generated approximately $24 million in U S net product sales.
Adam Townsend: Resulting in a total of $91 million for the full year.
Adam: Notably, approximately 10% of demand in 2023 was from treatment-naive patients, and compliance rates remain incredibly high at 97%. We also continue to have a very strong safety profile. We have over 1,400 patient years of systemic pegcetacopalin exposure and have had zero cases of meningococcal infection and very low rates of thrombosis.
Adam Townsend: Notably approximately 10% of demand in 2023 was from treatment naive patients and compliance rates remain incredibly high at 97%.
Adam Townsend: We also continue to have a very strong safety profile.
Adam Townsend: We have over 1400 patient years of systemic pack center Copeland exposure and have had zero cases, meningococcal infection, and very low rates of prognosis.
Adam: We are facing a more competitive market with the recent approval of an oral product in P&A, and I expect the convenience of a twice-a-day pill will be appealing to some patients. I've previously commented on the positive feedback since approval of the empathy injection. By simplifying administration and offering greater mobility, we believe the injector elevates the patient experience and fortifies our competitive position.
Adam Townsend: We are facing a more competitive market with the recent approval of an oral product <unk>.
Adam Townsend: I expect the convenience of a twice per day tail will be appealing to some patients.
Adam Townsend: Previously commented on the positive feedback since approval at the upper body injector bye.
Adam Townsend: By simplifying administration offering greater mobility, we believe the injector elevates the patient experience and fortify our competitive position.
Adam: Before I hand it over to Caroline, I'll close by saying that I am incredibly proud of both the Cyfovir and Empaveli medical and commercial teams. They did an outstanding job throughout 2023, working night and day to bring these two medicines to physicians and patients in need. With that, I will turn the call over to Caroline.
Speaker Change: Before I hand, it over to Caroline I'll close by saying that I am incredibly proud of both the SIFI oriented <unk> medical and commercial teams.
Speaker Change: Did an outstanding job throughout 2023, working night and day to bring these two medicines to physicians and patients in need.
Speaker Change: With that let me turn the call over to Caroline.
Caroline: Thanks, Adam, and good morning, everyone. We had an active year within the medical community for both syphobry and empivelli. In November, we presented data from our Gale Extension study, which followed three years of continuous treatment with syphobry, at the American Academy of Ophthalmology annual meeting. These data continue to show increasing effects over time with both monthly and every other month syphilis dosing, a seminal feature of syphilis efficacy profile. As Adam just highlighted, syphovery reduced GA lesion growth by more than 40% in patients with non-symphobial GA lesions in year three compared to projected sham.
Caroline: Thanks, Adam and good morning, everyone. We had an active year within the medical community for both <unk> and <unk>.
Caroline: <unk> and <unk>.
Caroline: November we presented data from our Gale extension study, which followed three years of continuous treatment with Tysabri at the American Academy of Ophthalmology annual meeting.
Caroline: These data continue to show increasing effects over time with both monthly and every other month playful re dosing.
Caroline: Seminal feature of Safe Harbor, its efficacy profile.
Caroline: As Adam just highlighted <unk> reduced GAA lesion growth by more than 40% in patients with nonsense <unk> lesions in year three.
Caroline: Care to projected Sean this is the largest treatment effect shown in <unk> to date.
Caroline: This is the largest treatment effect shown in GA to date. 2024 has already been a busy year so far in terms of medical meetings. Most recently, we were at the Macula Society, where we had a significant presence with three oral data presentations, including our Gale 36-month data, a Matching Adjusted Indirect Comparison, or MAIC, analysis using our 24-month data, and post-hoc microperimetry analysis demonstrating preservation of function in the retina following treatment with Cyfoavrine. Turning to Empaveli, we, along with our partner SOBE, presented These data show that treatment with empivelli can help PNH patients achieve rapid and sustained control of their disease over the long term.
Caroline: 2024 has already been a busy year, so far in terms of medical meetings most.
Caroline: Most recently, we were at the Macula Society, where we had a significant presence with three oral data presentations, including our gas 36 month data.
Caroline: Matching adjusted indirect comparison or MAA IC analysis, using our 24 month data and post hoc micro preliminary analysis, demonstrating preservation of function in the retina following treatment with <unk>.
Caroline: Turning to <unk>.
Caroline: Along with our partners <unk> presented post hoc long term efficacy and safety data on <unk> at Ash annual meeting in December.
Caroline: These data showed that treatment with <unk> can help <unk> patients achieved rapid and sustained control of their disease over the long term.
Caroline: Furthermore, it is impressive that the majority of patients remain transfusion-free for up to three years, alleviating a significant and common disease burden for many patients living with PNH. Additionally, at Kidney Week, we had the opportunity to present new data from our Phase 2 NOBLE study, investigating pegcetacopalin for the treatment of post-transplant recurrence of C3G and ICMPGN. C3G and ICMPGN are diseases in which patients have a 50% chance of progressing to end-stage renal disease or kidney transplantation over the course of 5 to 10 years.
Caroline: Furthermore, it is impressive that the.
Caroline: Majority of patients from main transfusion free for up to three years, alleviating a significant and common disease burden for many patients living with P&L.
Caroline: Additionally, at kidney week, we had the opportunity to present, new data from our phase two Novo studies <unk>.
Caroline: <unk> peso to Copeland for the treatment of post transplant recurrence of C. III G.
Caroline: ICEE and PGN.
Caroline: D through G and ICM PGN diseases in which patients have a 50% chance of progressing to end stage renal disease or kidney transplantation over the course of five to 10 years.
Caroline: Between these two indications, there are approximately 5,000 potential patients in the U.S. and up to 8,000 in Europe with no approved treatments available. This year, we are looking forward to the top-line data from our Phase III Valiant Study, which we expect mid-year. Valiant enrolled 124 patients, split 50-50 between treatment and placebo, aged 12 and up with C3G or primary IC MPGN. It is the only study to include both native kidney patients and patients who have recurrent disease after receiving a kidney transplant.
Caroline: Between these two indications there are approximately 5000 potential patients in the U S and up to 8000 in Europe with no approved treatments available.
Caroline: This year, we are looking forward to the topline data from our phase III <unk> study, which we expect midyear.
Caroline: Valeant enrolled 124 patients split 50, 50 between treatment and placebo age 12, and up with <unk> or primary IC and PGM.
Caroline: It is the only study to include both native kidney patients and patients who have recurrent disease after receiving a kidney transplant.
Caroline: Study participants were randomized to receive Pegcetacopalin or placebo twice weekly for 26 weeks. Following this 26-week randomized controlled period, patients will proceed to a 26-week open-label phase in which all patients receive Pegfetocopilin. The primary endpoint of the study is the reduction from baseline in urine protein to creatinine ratio, or UPCR, as compared to placebo at week 26. Now, I'd like to shift gears and comment on the Cascade Phase 3 study evaluating the efficacy and safety of pegcetacopalin in patients with cold agglutinin disease, or CAD. As SOBE previously disclosed, the decision was made to end the study due to decreased medical need in the CAHPS space and a limited number of patients eligible for the study. This is not due to any safety concerns, nor has efficacy been evaluated due to the study being mapped.
Caroline: Study participants were randomized to receive <unk> Copeland or placebo twice weekly for 26 weeks.
Caroline: Following the 26 week randomized controlled period patients will proceed to a 26 week open label phase in which all patients receive peg physical plan.
Caroline: The primary endpoint of this study is the reduction from baseline in urine protein creatinine ratio are you PCR as compared to placebo at week 26.
Speaker Change: I'd like to shift gears and comment on the Cascade Phase III study evaluating the efficacy and safety of <unk> Copeland and patients with cold agglutinin disease or cat.
Speaker Change: As <unk> previously disclosed the decision was made and the study due to decreased medical need in the CAD space and a limited number of patients eligible for the study.
Speaker Change: This is not due to any safety concerns and the efficacy has not been evaluated due to the study being mapped.
Caroline: I'd like to express our gratitude to the CAD community for their support and collaboration. SOBE is working with study investigators to manage the next steps for those enrolled in the study with their welfare as the priority. Now I will turn the call over to Tim for a review of the financials. Kim?
Speaker Change: I'd like to express our gratitude to the CAG community for their support and collaboration.
Speaker Change: <unk> is working with study investigators to manage the next steps for those enrolled in the study with their welfare as the priority.
Speaker Change: Now I will turn the call over to Tim for a review of the financials.
Speaker Change: Kim.
Tim: Thank you, Caroline. I will provide a brief overview of our financials, and you can find additional details in the press release that we issued earlier this morning. Total revenue for the fourth quarter of the year 2023 was $146 million and $397 million, respectively.
Speaker Change: Thank you Caroline.
Tim: I'll provide a brief overview of our financials you can find additional details in the press release that we issued earlier this morning.
Tim: Total revenue for the fourth quarter and full year 2023 was 146 million grew 397 million respectively.
Tim: Quarterly revenue consisted of $114 million in Cyphery and $24 million in Empa Valley U.S. Net Product Revenue, and $8 million in additional licensing and other revenues associated with the SOBI collaboration. Four-year revenue consists of $275 million inside OVRI and $91 million in Empa Valley U.S. Net Product Revenue and $30 million in additional licensing and other revenue associated with the SODI collaboration. Turning to the rest of the P&L, for the fourth quarter and full year, cost of sales was $20 million and $58.5 million, respectively.
Tim: Quarterly revenue consisted of $114 million in February and $24 million in <unk> U S net product revenue and $8 million in additional licensing and other revenue associated with the survey collaborations.
Tim: Alere revenue consists of $275 million and favorable rate and $91 million <unk> U S net product revenue and $30 million in additional licensing and other revenue associated with Sony collaborations.
Tim: Turning to the rest of the P&L for the fourth quarter and full year.
Tim: Cost of sales was $20 million of $58 5 million respectively.
Tim: R&D expenses were $69 million and $354 million, respectively. G&A expenses were $142 million and $501 million, respectively, and we reported a net loss of $89 million and $529 million, respectively.
Tim: R&D expenses were $69 million and $354 million respectively.
Tim: G&A expenses were $142 million, and 501 billion, respectively, and we reported a net loss of $89 million and 529 million respectively.
Tim: I'd like to point out a few items in our financial statements that will help in evaluating our business. First, we recorded accounts receivable of $206 million at year-end, which is primarily associated with payment terms that we provide to the SIFO redistributors. The accounts receivable line item has increased along with the increasing SIFO resales and is in line with typical payment terms. Second, as we shared previously, we are now categorizing the majority of medical affairs and certain other costs in GNA instead of in R&D. This represents an approximately $22 million shift from R&D to G&A in the fourth quarter and $41 million in the second half of 2023. No reclassifications were necessary for prior periods.
Speaker Change: I'd like to point out a few items in our financial statements that will help in evaluating our business.
Speaker Change: First we recorded accounts receivable of $206 million at year end, which is primarily associated with payment terms that we provide to the site <unk> distributors <unk>.
Speaker Change: Counts receivable line item has increased along with the increasing by four resales and is in line with typical payment terms.
Speaker Change: Second as we shared previously we are now categorizing the majority of medical affairs, and certain other costs and G&A instead of an R&D.
Speaker Change: This represents approximately 22 million shift from R&D to G&A in the fourth quarter and $41 million in the second half of 2023.
Speaker Change: No reclassifications were necessary for prior periods. However, it is important to note. This ship on reviewing trends in our operating expenses.
Tim: However, it is important to note this shift when reviewing trends in our operating expenses. And finally, our operating expenses do not yet reflect the ongoing efficiencies that we expect from our restructuring last August due to severance and the winding down of certain projects. As I said last quarter, we expect to realize these efficiencies beginning in 2024. While I'm not going to get into detailed numbers, what I will say is that we expect our total operating expenses in 2024 to be less than our total expenses in 2022. Turning to our balance sheet, as of December 31st, 2023, we had $351 million in cash and cash equivalents.
Speaker Change: And finally, our operating expenses do not yet reflect the ongoing efficiencies we expect from our restructuring last August due to severance and winding down of certain projects.
Speaker Change: As I said last quarter, we expect to realize these efficiencies beginning in 2024.
Speaker Change: Im not going to get into detailed numbers, but I will say is that we expect our total operating expenses in 2024 to be less than our total expenses in 2023.
Speaker Change: Turning to our balance sheet as of December 31, 2023, we have $351 million in cash and cash equivalents.
Tim: We continuously evaluate ways in which to further strengthen our financial position. And with that in mind, today we announce that we have entered into agreements to unwind approximately 80% of the capped call associated with the $425 million in convertible notes that we hold in Treasury. We expect total aggregate net cash proceeds to be up to $125 million, including approximately $100 million following this transaction and up to $25 million in additional net cash proceeds if we unwind the remaining CAPT call. The online transactions will be settled based on a seven-day averaging period beginning on and including February 27, 2024. As of December 31st, 2023, the aggregate principal balance of the remaining convertible notes and unamortized issuance costs was $93 million.
Speaker Change: We continuously evaluate ways in which to further strengthen our financial position and with that in mind today, we announced that we entered into agreements to unwind approximately 80% of the capped call associated with the $425 million in convertible notes that we hold in treasury.
Speaker Change: We expect total aggregate net cash proceeds to be up to $125 million, including the approximately 100 million. Following this transaction and up to $25 million in additional net cash proceeds if we unwind the remaining capped call.
Speaker Change: The underlying transactions will be settled based on a seven day, averaging periods, beginning on and including February 27th 2024.
Speaker Change: As of December 31, 2023 aggregate principal balance of the remaining convertible notes net of unamortized issuance costs was $93 million.
Tim: We now believe that our cash and cash equivalents, combined with the cash generated from the capital unwind and from sales of FedBovary and EmpaValley, will be sufficient to fund our projected operating expenses and capital expenditures for the foreseeable future. That said, we will continue to evaluate opportunities to further optimize our balance sheet and maintain an appropriate cash balance at all times. We have multiple levers that are available to us, and as always, we will be incredibly thoughtful and opportunistic in any decision we make. I will now hand the call back over to Cedric for closing remarks. Cedric?
Speaker Change: We now believe that our cash and cash equivalents combined with the cash generated from the Casco unwind and from sales of February in Napa Valley will be sufficient to fund our projected operating expenses and capital expenditures for the foreseeable future.
Speaker Change: That said, we will continue to evaluate opportunities to further optimize our balance sheet and maintaining an appropriate cash balance at all times.
Speaker Change: We have multiple levers that are available to us and as always we will be incredibly thoughtful and opportunistic in any decision we make.
Speaker Change: I'll now hand, the call back over to Sandra for closing remarks centered.
Cedric Francois: Thanks, Tim. This was a strong finish to the year. We are building on our success and learnings, and the evidence of our ongoing strength continues to be seen in the numbers and feedback we receive. We are headed into the year with renewed energy and acute focus on our goal of putting patients first and elevating the standards of care in all disease areas in which we work. With this, we are determined to execute on our four key priorities, continuing to expand patient access to safe food in the U.S., while also working to bring the And finally, progressing our early pipeline, including the siRNA program and our collaboration with PIMA. As always, we are looking forward to sharing updates as they become available and continuing our efforts toward becoming a global leader in complement medicine. Let us now open the call for questions. Operator?
Sandra: Thanks, David This was a strong finish to the year. We are building on our success and learnings and the evidence of our ongoing strength continues to be seen in the numbers and feedback we are seeing.
Sandra: We are headed into the year with renewed energy as an acute focus and our goal for these patients first and elevating the standards of care in all disease areas in which we work.
Sandra: With this we are determined to execute on our four key priorities.
Sandra: Are you doing to expand patient access to say it will be in the U S. While also working through the new therapy worldwide.
Sandra: Maximizing and Bavarian DNS, and then expanding in this new indication <unk> and SCM ECM.
Sandra: And finally progressing our early pipeline, including the <unk> program and our collaboration with team.
Sandra: As always we are looking forward to sharing updates as they become available and continuing our efforts towards becoming the global leader in complement medicine.
Speaker Change: There is no open the call for questions operator.
Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star 1 1 on your telephone. If your question has been answered, or you wish to move yourself from the queue, please press star 1 1 again.
Speaker Change: Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered with should move yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
John Miller: We'll pause for a moment while we compile our Q&A roster. Our first question comes from John Miller with Evercore. Your line is open. Hey guys.
Speaker Change: Our first question comes from Jon Miller with Evercore. Your line is open.
John Miller: Thanks for taking the question. Congratulations again on a great Q4 and a great reacceleration of the launch. I would love to start on the EU reexamination.
Jon Miller: Hey, guys. Thanks for taking the question Congrats again on a on a great Q4, and a great re acceleration of the launch.
Jon Miller: Would love to start on the EU reexamination.
Cedric Francois: Cedric, you mentioned that you're getting a lot of enthusiasm from patient groups and from docs in the EU. I would love to get a sense from you about how much impact that doc enthusiasm will have on the EU reexamination and maybe why that wasn't helpful in the first round. What's changed now that that wasn't the truth in the first exam?
Jon Miller: Cedric you mentioned that Youre getting a lot of enthusiasm from patient groups from docs in the EU I would love to get a sense from you for how much impact that dock enthusiasm will have on the EU reexamination and maybe why that wasn't helpful. In the first round with whats changed now that that wasn't the truth.
Cedric Francois: And then secondly, on the commercial one, if, you know, even accounting for seasonality, is it fair to expect that Q1 will still be growing robustly relative to Q4? Do you expect that March orders will be making up for Medicare recertification delays in January and February? Thank you so much, John. First of all, as it relates to the European Union, these letters are letters that are not sent to us. They are sent independently from us to the review organization, and then we, you know, receive them via that route.
Jon Miller: In the first examination and then secondly on the commercial one.
Jon Miller: If.
Jon Miller: You've been accounting for seasonality.
Jon Miller: Is it fair to expect that Q1 will still be growing robustly relative to Q4.
Jon Miller: Do you expect that March orders will be making up for a Medicare recertification delays in January figure.
Speaker Change: Thank you so much Joe.
Joe: So first of all as it relates to the European Union. So these are these letters are lenders that are not sent to us there since two.
Joe: Dependency from Us to the review organization and then we.
Joe: We received them via that route. So these are important letters of support I think that highlights the unmet medical need the highlights the support that physicians have for this product in their desire to make it available to their patients in Europe will it have an impact of it is really impossible to tell for us.
Cedric Francois: So these are important letters of support. I think they highlight the unmet medical need. They highlight the support that physicians have for this product and their desire to make it available to their patients in Europe. Will they have an impact? That is really impossible to tell for us. You know, as we've always mentioned, this will be an uphill battle.
Joe: As we've always mentioned this will be an uphill battle. It is rare for these appeals to be successful.
Cedric Francois: It is rare for these appeals to be successful, but, of course, having the support from the patients and the physicians. Then, as it relates to the commercial question, I will hand that over to you. Yeah, hey John, it's Adam.
Joe: But of course, having the support from the patients and the physicians is important.
Speaker Change: Then as it relates to the commercial question I'll hand that over to a pattern.
Speaker Change: Yeah, Hey, John it's Adam So, yes, we did see seasonality impact.
Adam: So yeah, we did see seasonality impact January and the start of February, but the vast majority of that was due to recertification. And we also had a few weather delays, so.
Adam Townsend: January and the start of February so that the vast majority of that was due to reset vacations and we also had a few weather delays so.
Adam: Interestingly, right, we did some homework, and the seasonality is always consistent, and we saw it with, in our homework, with some of the anti-VEGF products over the years. For example, we believe that ILEA has not seen growth above 5% in Q1 versus Q4 over approximately the last 10 years, with several years resulting in a quarter-on-quarter decline in growth. It tends to be due to recertification seasonality and weather, et cetera, and other demands.
Adam Townsend: Interestingly right, we did some homework and the seasonality is always consistent and we saw it with a headwind with some of the anti VEGF products over the years. For example, we believe the Eylea has not seen growth above 5% in Q1 versus Q4 over approximately the last 10 years with several years, resulting in a <unk>.
Adam Townsend: On quarter decline in Q1.
Adam Townsend: Tends to be due to reset of vacation seasonality.
Adam Townsend: And weather et cetera.
John Miller: We have seen two of our biggest months since launch in January and February, and your question was, do you expect that to continue in March? We think we're through all of the recertifications. Hopefully, the weather stays friendly to us, so we continue to expect to see solid numbers in March. It makes sense. And maybe one for Tim, or I'll get back to Nicky, one of them.
Adam Townsend: We have seen two of our biggest month since launch in January and February and your question was do you expect to see that continue in March we think we're through all of the reset to vacations.
Adam Townsend: The weather stays friendly to us so we continue to expect to see solid.
Adam Townsend: The numbers in March as we move forward.
Makes sense and maybe one for Tim.
Speaker Change: Back in the queue I am I right.
John Miller: Go ahead, John. Why don't you ask it quickly? I think that's easier. I was just going to ask him about the runway now and for the foreseeable future. I remember at J.P. Morgan, you were saying that it was plausible you could reach profitability and be funded through the foreseeable future, but that you might not want to do that. And I would just want to get a sense for how that's changed since J.P. Morgan and whether you're really actively looking for ways to bolster your cash position and give yourself a little bit more flexibility or if you think you've done that with these capitals Well, so,
Speaker Change: Go ahead, gentlemen, Jessica quickly I think that's easier.
Speaker Change: I was just going to ask him about.
Speaker Change: The runway now through the foreseeable future I remember at Jpmorgan, you were saying that it was plausible you could.
Speaker Change: Reach profitability and be funded through the foreseeable future, but that you might not want to do that and I just wanted to get a sense for.
Speaker Change: How that's changed since JP Morgan and whether you are really actively looking for ways to bolster our cash position and give yourself a little bit more flexibility or if you think you've done that with these chemicals.
Speaker Change: Well.
Tim: So the good news is that with the cap call, with $120 to $125 million of essentially non-dilutive capital, in addition to the $351 million we reported at year-end. That puts us in a great financial position, and as we mentioned, in our scenarios that we project that that should get us to. I mean, it could be technically done.
Speaker Change: Thanks, John So the good news is with the cap call.
Speaker Change: It was 100 $120 million to $125 million, it's essentially a non dilutive capital. In addition to the $351 million, we reported at year end.
Speaker Change: Puts us in a great financial position and as we mentioned.
Speaker Change: In our scenario that we project that that should get us to.
Speaker Change: Through without having to raise capital necessarily I mean, it can be technically done.
Tim: But we also have certain things like our SFJ liability, which is, you know, $200 million in cash out the door over the next year and the next two years. And, you know, that could put us in a position where we don't really have an ideal cash balance. So, you know, the good news is we're in a pretty strong position and, you know, we have a lot of options available to us to opportunistically make sure we have a, you know, sufficient cash balance that could be refinancing SFJ, that could be a number of things. So again, we'll be thoughtful and opportunistic as we always have been. Yeah, that pretty much Fair enough. Thanks so much.
Speaker Change: But we also have certain things like our <unk> liability, which.
Speaker Change: That's $200 million in cash out the door over the next over the next two years.
Speaker Change: And that could put us in a position, where we don't really have an ideal cash balance so.
Speaker Change: The good news is we're in a pretty strong position and we have a lot of options available to us to Opportunistically make sure we have.
Speaker Change: A sufficient cash balance that could be refinancing SFA that could be a number of things.
Speaker Change: So again, we'll be thoughtful and opportunistic as we always have been.
Speaker Change: That pretty much covers it.
Speaker Change: Fair enough. Thanks, so much guys.
Tim: Thanks. Thank you, Tim. One moment for our next question. Our next question comes from Tazeen Ahmad with BFA Securities. Your line is open.
Speaker Change: Thank you Sir one moment for our next question.
Casino Margaret: Our next question comes from Casino Margaret Bofa Securities. Your line is open.
Tazeen Ahmad: Hi, guys. Good morning. Thanks for taking my questions. Just a point of clarification, Adam. Are you expecting to see growth in 1Q relative to 4Q in sales? I just want to clarify. I did mention the ILEA historicals.
Casino Margaret: Hi, guys. Good morning, Thanks for taking my question just a point of clarification. Adam are you expecting to see growth in <unk> relative to <unk>.
Margaret: On samples I just wanted to clarify did mention the Eylea historic and wanted to make sure it's flat to down and then secondly, I have a question on <unk> seven.
Adam: I wanted to make sure it's not going to be flat down. And then, secondly, I have a question on 3007. What are you expecting to show for this SIRNA program, and what potential indications do you think it has promise in? Thanks. Hey, Tazeen. It's Adam.
Margaret: What are you expecting to show for that.
Margaret: RNA program and what potential indications do you think it has promise.
Margaret: Okay.
Speaker Change: <unk> is that a yes I mean.
Cedric Francois: So, yes, I mean. We continue to see growth in February, and we expect to continue to see growth in March moving forward. As I said, you know, January and February were two of our biggest months since launch. You also asked about samples. So we continue to provide samples to our U.S. physicians, and we expect to continue to do that, especially as we're still in what I would call the early phases of this launch. Interestingly, we didn't see a sampling increase in the first quarter, which, I'll be honest, I thought it probably would as we were going through the recertifications, but sampling will continue to be there as we move forward. So hopefully, that answers your first question, and I'll hand over to Phil. Thank you, Adam. So, Tazeen, on 3007.
Speaker Change: We continue to see growth in February and we expect to continue to see growth.
Speaker Change: In March moving forward as I said.
Speaker Change: January and February were two of our biggest month since launch you also asked about samples so we.
Speaker Change: To provide samples to our U S physicians and we expect to continue to do that especially as we're still in what I would call. The early phases of this launch interestingly, we didn't see sampling increase in the first quarter, which I'll be honest I thought it probably would as we were going through the re certifications.
Speaker Change: Sampling will continue to be there as we move forward. So hopefully that answers your first question and I'll hand it.
Centric: Over to centric.
Centric: Thank you Adam.
Centric: 3007, so this is it.
Cedric Francois: So, this is in the escalation phase in healthy subjects. It is the first of, you know, several things that are coming out of the preclinical realm now, things that we're very excited about, and we'll talk about more in the year to come as well. So, what we're hoping to see there in the healthy volunteer phase is, of course, how much we can knock down C3 and how durable that will be in these subjects. The indications that we are going to pursue, we are for now keeping confidential, but we, of course, have a, We believe it's a very exciting development plan. Thank you. One moment for our next question. Hey, guys.
Centric: The escalation phase in healthy subjects.
Centric: First of several things that are coming out of our out of the preclinical realm now things that we're very excited about I will talk about more in the year to come as well.
Centric: So what we're hoping to see there in the healthy volunteer phase of course.
How much we can knockdown C III and how durable that will be in these subjects the indications that we're going to pursue.
Centric: We're now keeping confidential, but we of course.
Centric: What we believe is a very exciting development plan.
Centric: In store for that product.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Our next question comes from <unk> Rama with Jpmorgan. Your line is open.
Adam: Adam, I wanted to ask you a quick question. What is driving your commentary about the GEA population size here in the U.S. being closer to 1.5 million versus, I think, what you've previously talked about is about a million? Thanks. Yeah, thanks Alan-Pam.
Rama: Hey, guys. Thanks, so much for taking my question.
Rama: Adam I wanted to ask you a quick question what is driving your commentary about the gea population size here in the U S being closer to $1 $5 million versus I think what you've previously talked about is about 1 million patients. Thanks. So much.
Adam Townsend: Yeah. Thanks, <unk>, so I'll I'll answer and then I'll hand, caroline's, while if she has any comments. So one thing we found with our interactions with physicians is supported the artwork prior to launch was sizing an opportunity that was based on prevalence data, but also having discussions prelaunch with physicians about how many patients that.
Adam: So, I'll answer and then I'll hand it to Caroline as well if she has any comments. So, one thing we found with our interactions with physicians is all of our work prior to launch was sizing an opportunity that was based on prevalence data, but also having discussions pre-launch with physicians about how many patients that they had. And one thing we found is that when you're first to market, you'll find a lot of patients that weren't categorized as GA, having GA because there were no treatments, were lost to follow up in terms of sitting So we put a large amount of effort into driving patients to go and get tested and check their vision at their optometrists, and then if they're diagnosed with GA, move into the clinic of a retina physician or an injecting physician.
Adam Townsend: I think they have.
Caroline: One thing we found is when you're first to market launch you'll find a lot of patients that were categorized as GAA, having gi because there was no treatments were lost to follow up in terms of sitting with them optometrist or something like that so we spent a large amount of effort to drive patients to go and get tested and check that vision.
Caroline: The optometrist and then if they are diagnosed with GAA move into the clinic of our retina physician <unk> physician. So in those interactions with starting to find that those patients that potentially were lost to follow up have now been diagnosed with GRM moving into the practices.
Adam: So in those interactions, we're starting to find that those patients that potentially were lost to follow up have now been diagnosed with GA and are moving into... So, that's how we believe, based on those interactions, that the market is bigger than we thought it was. Caroline, do you want to add anything from a...
Speaker Change: That's how we believe based on those interactions that the number is that the market is bigger than we had first anticipated caroline's you want to add anything from a doctor perspective sure. Thank you.
Caroline: Thank you. I think that the GA story is getting out there, not only to retina physicians and other eye care specialists but to patients, and this has really helped to drive it.
Caroline: I think that.
The GAA story getting out there not only to retina physicians and other eyecare specialists participation.
Caroline: And this has really helped to drive it. The other thing is that now that we have a treatment.
Caroline: The other thing is that now we have a treatment. All of the patients that we've been seeing that have neovascular or wet AMD in one eye, we're looking more closely at their fellow eye and seeing, I think, that there's TA in those patients that had previously just been observed. So, the number of patients seems to be greater and continues to be more in my practice. Thanks so much for taking the time to answer our questions. One moment for our next question. The next question comes from Salveon Richter with Goldman Sachs. Your line is open.
Caroline: Patients that we've been seeing that have neovascular wet AMD in one eye.
Caroline: Looking more closely at their follow up and I think that Theres GAA in those patients that had previously just been observed so the number of patients seems to be good.
Caroline: Later and continues to be more in my practice.
Caroline: Okay.
Speaker Change: Thanks, so much for taking my question.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from solving Richter with Goldman Sachs. Your line is open.
Elizabeth: Great, good morning, and thank you for taking our question. This is Elizabeth from Salveen. Two questions from us on the EU re-examination of the application of syphilis. First, you noted that you had revised the dossier to ensure that key questions were addressed. Could you just speak to what was included in that revision? And then, secondly, I was curious if the new rapporteurs had been identified and if there's any color you could provide on them with respect to them providing potentially a new perspective compared to the first set of rapporteurs. Thank you, Elizabeth. It's great to hear from you.
Great. Good morning, and thank you for taking our question. This is Elizabeth on <unk> two questions from us on the EU reexamination of the application of stifle.
Elizabeth: So first you noted that you had revised that dossier to ensure key questions are addressed could you just speak to what was included in that revision and then secondly curious if the new Revpar tours have been identified and if there's any color you could provide on that with respect to that.
Elizabeth: <unk> potentially a new perspective compared to the first rapid Chargers.
Speaker Change: Thank you visit with great to hear you so Andrew.
Cedric Francois: So, you know, in the revision, we don't provide that detail, of course, but what's important is to educate, of course, to understand this disease of geographic atrophy and how that works as it relates to the functional endpoints. We have, as you mentioned, two new rapporteurs now. These are going to provide a very fresh view of what we have presented, and we have new analyses available.
Speaker Change: The revision, we don't provide that detail first but what's important is to.
Speaker Change: Advocates of course understand this disease with geographic atrophy, and how that works as it relates to the functional endpoints.
Speaker Change: We have as you mentioned two new record tours now these are going to provide a very fresh view.
Speaker Change: Presented.
Speaker Change: And we have new analyses availability, we continue to generate data as you know when to get extension study as well so.
Cedric Francois: We continue to generate data, as you know, in the Gale Extension study as well. So, look, as we've always said, we believe that we have strong evidence, of course, not in a pre-specified prospective trial, but based on what we gathered throughout our very large data set, and that is what we will now present to these new rapporteurs, you know, with more focus and, you know, by making some concessions, maybe on the label, but with a backward step. I got it.
Speaker Change: As we've always said, we believe that we have.
Speaker Change: <unk> evidence of course, not in a pre specified prospective trial, but based on what we gathered throughout there are very large datasets and that is what we will now presents to these new rough waters.
Speaker Change: With more focus and.
Speaker Change: Im making some concessions maybe on them.
Speaker Change: On the label bits, where the path forwards we hope.
Elizabeth: Okay. Thank you. One moment for our next question. Our next question comes from Yigal Nochomovitz with Citigroup. Your line is open.
Speaker Change: Got it understood. Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Yigal <unk> with Citigroup. Your line is open.
Yigal Dov Nochomovitz: Hi, great. Thanks, Cedric and team. Cedric, I appreciate, as you pointed out, that it's not going to be easy for the CHMP reexamination. It's an uphill battle.
Yigal: Hi, great, Thanks, Jay and team.
Yigal: Cedric I appreciate as you pointed out that it's not going to be easy for the CH M. P. Reexamination, it's an uphill battle.
Cedric Francois: You've mentioned the micropermitry data. You've shown us the post-hoc BCVA data. There's another metric, which maybe you could talk about. I don't think you've discussed it before, the electroretinogram, or ERG. It's a very precise measure of electrical activity in the retina.
Yigal: You've mentioned the micro Perimetry data you've shown us the post hoc the CVA data there is another metric, which maybe you could talk about I don't think you've discussed it before the electroretinogram the EOG.
Very precise measure of electrical activity in the retina have you looked at that do you have any data there is that something that you could potentially include.
Cedric Francois: Have you looked at that? Do you have any data on that? Is that something that you could potentially include in the future that could support the claim that there is a functional benefit, even though you don't see it in the imaging or in the post-hoc BCVA? Thanks. Thank you so much, Yigal. So, ERG, I will hand it over to Caroline to comment on that next, but this is not the type of examination that you could use to look at a functional response in geographic atrophy. Again, there's like a resolution problem with that, from what I understand, but Caroline can talk about that more.
Yigal: In the future that could support the.
Yigal: Claim that there is a functional benefit even though you don't see it in the in the in the imaging or in the post hoc the CBA.
Speaker Change: Thank you so much you go so.
Speaker Change: I will hand, it over to Karen to comment on that next.
Karen: Is not the type of examination that you could use to look at a functional response.
Karen: Geographic atrophy again, theres like a resolution program with us from what I understand Thats Caroline can talk about that more.
Cedric Francois: What I think is important here is that the data that we have on micro perimetry is very strong, right? And it shows that, again, the longer you treat patients, the more you see these benefits increase over time. And that is also reflected in the functional measurements that we have. So, we will put all of that together in that package.
Karen: But I think is important here is that the data that we have on macro perimetry is very strong and it's data that <unk>.
Karen: The longer you treat patients the more you see these benefits increase over time.
Karen: It's also reflected in the selection of the measurements that we have so.
Karen: We will put all of that together in the package, we will consider on what we can do prospectively that will take time of course.
Cedric Francois: We will consider what we can do prospectively. That will take time, of course, but for everybody in the future to continue to study this. But for now, I think we have a strong package with clear evidence, but ERG is definitely not something that is part of that. Oh, thank you. ERG is something that absolutely is for Clinical Studies for Inherited Retinal Diseases. It gives a gross response to function and is less used for something like geographic atrophy.
Karen: But for everybody in the future to continue to study this.
Karen: But for now I think we have a strong package with clear evidence that EOG is definitely not something that is part of the equation. Kevin I don't know if you want to thank you.
Kevin: CRD is something that absolutely.
Kevin: For our clinical studies for inherited retinal diseases.
Kevin: Our gross response to <unk>.
Kevin: Function and is less used for something like geographic atrophy, but akshay Im Michael Perimetry data gives very similar sort of data 10, ERP, but in a more directed fashion.
Caroline: But actually, our microperimetry data gives a very similar sort of data to an ERG, but in a more directed fashion. I think the story with syphobry is that it's looking at the overall picture of what syphobry has to add. And when we present this, it's very meaningful for doctors at meetings. We talk about the imaging parameters, how syphobry reduces growth of GA, which alone in itself is highly meaningful.
Kevin: Thank.
Kevin: The startup of <unk> is it's looking at the overall picture, let's say February has to add and when we present.
Very meaningful adopters at meetings, we talk about the imaging parameters halfway full rate reduces growth of GAA, which alone in itself is highly meaningful we talk about.
Caroline: We talk about... AI parameters, and then we talk about all the functional data that we have, which is microperimetry, time to vision loss, and other parameters that we've given at the clinical meeting. So, I think that no one else has the amount of robust microperimetry data that we have in such a large patient group, and And It's really just presenting the entire Cyphovir story to the EMA and really educating the EMA on this story. Okay, thank you. Thank you, Carolyn and Cedric. And then just one for Adam.
Kevin: AI parameters and then we'll talk about all the functional data that we have which is Michael commentary tied to vision loss.
Kevin: And other parameters.
Kevin: Parameters that we've given at the clinical meeting so I think that no. One else has the amount of the robust permitting data that we have in such a large patient group and it really speaks to physician and it's really just presenting the entire cycle story can be EMEA Anthony educating the EMA on this.
Kevin: Sorry.
Speaker Change: Okay. Thank you. Thank you Carolyn and then just one for you mentioned, Adam the news the 90% share.
Yigal Dov Nochomovitz: You mentioned, Adam, the 90% share. Is that New Starts? Or is that existing? Or is that everybody?
Speaker Change: Is that new starts or is that existing or is that everybody can you just split that out if possible.
Adam: Can you just split that out if possible? Yeah, that's, thanks Yigal. Yeah, that's the total market share. So we're the number one leading GA drug. Okay, thank you very much.
Speaker Change: Yes.
Speaker Change: Thanks, Yale, Yes, that's that the total market share so with the number one leading Gi drug.
Speaker Change: Okay. Thank you very much.
Yigal Dov Nochomovitz: One moment for our next question. The next question comes from Steve Seathouse with Raymond James. Your line is open. Great. Yeah, thanks for taking the question. I wanted to ask about a couple of specific parameters as it pertains to the SIFO-RE launch.
Speaker Change: One moment for our next question.
Speaker Change: The next question comes from Steve State House with Raymond James Your line is open.
Speaker Change: Great Yeah. Thanks for taking the question wanted to ask about a couple of specific parameters as it pertains to the site ovary launch first.
Steve Seathouse: Can you comment on patient persistence or discontinuation rates in the real world? Second, just the interval between doses. Is it closer to eight weeks or six weeks? What's the sort of average dose interval?
Speaker Change: Can you comment on patient persistence or discontinuation rates in the real world.
Speaker Change: Just the interval between doses.
Speaker Change: Closer to eight weeks or six weeks with what's the sort of average dose interval and then also net price or gross to net.
Steve Seathouse: And then also net price or gross to net adjustment, we should be thinking about as well. Thanks. Thank you, Steve.
Speaker Change:
Speaker Change: And what we should be thinking about as well thanks.
Speaker Change: Thank you Steve.
Caroline: Maybe, Caroline, you can briefly comment on what we've seen with this continuation, and then Adam will talk about the pathology and the... Overall, from what I hear from physicians and what I've seen is that patients are highly motivated and, actually, are very comforted to know the exact number of injections that they might be receiving, you know, over the year and the following years. With anti-VEGF, it's a treatment we often use treat and extend, so it can be a little more variable.
Speaker Change: Medicare then you can briefly comment on what we've seen with discontinuation and then Adam will talk about the pathology and the gross clinic.
Speaker Change: Overall from what.
Speaker Change: What I hear from physicians and what I've seen is that patients are highly motivated and actually in some ways a very comforting to note.
Speaker Change: Exact number of injections that they might be receiving over a year and following years with anti VEGF itself, we often use to extend so it can be a little more variable.
Caroline: But I think that the majority of physicians in the real world are dosing every six to eight hours for patients. Patients seem to be returning for their follow-ups. There was one group that looked at this, a large retina group that found very high levels. Yeah, just to build on that too, Steve, it's Adam. You know, we're still in the, you know, we just got past the first year, so it's still early in the launch, and we found that the vast majority of patients are really committed to research, as Caroline just described.
Speaker Change: But I think that the majority of physicians and the railroads are dosing every six to eight weeks with patients and patients seem to be returning further follow ups. There was one of group.
Speaker Change: <unk> looked at this a lot of excitement it sounds very high level.
Speaker Change: And Ah patients.
Speaker Change: Yes, just to build on that too Steve It's Adam.
Speaker Change: We're still in the.
Adam Townsend: <unk> got past the first year. So it's still early in the launch and we found that the vast majority of patients are really committed to receiving the treatment of catalog just described beautifully.
Adam: So I think about the second part of your question. We are seeing the vast majority every six to eight weeks. It tends to skew closer to six weeks, but that flexibility of, you know, every other month dosing and that range allows physicians to, you know, move appointments around, particularly when weather affects them. We truly believe that the every-other-month dosing, as we call it, six to eight weeks, is a real, real competitive advantage for us and that the vast majority of patients are choosing that. I'll hand out the grates to the next question.
Adam Townsend: I think to the second part of your question.
Adam Townsend: We are seeing the vast majority being every six to eight weeks it tends to skew closer to six weeks with that flexibility.
Adam Townsend: Every other month dosing in that range allows physicians to to medical appointments around particularly when the weather impacts et cetera et cetera.
Adam Townsend: Hi.
Adam Townsend: We truly believe that the every other month dosing as we call. It six to eight weeks is a real real competitive advantage for us and that the vast majority of patients.
Adam Townsend: Using that frequency.
Adam Townsend: Ill hand, the gross to net question over to Tim.
Adam: So, in terms of gross TANF, you know, we don't guide on that. I think our previous guidance was something between 10 and 20 percent. But, you know, in our 10-K, we do have some pretty good disclosure over the past year in terms of the blended disclosure, both at Fovere and at Bovelli, but it has chargebacks, discounts, and fees laid out, government, and other rebates and returns. And what you can see there is a provision related to sales in the current year, kind of to the midpoint of that, that's on a historical basis. I don't see what that is going to be like. Thanks so much.
Tim: Yeah. Thanks, Adam So in terms of gross to net we.
Tim: We don't guide on that I think our previous guidance was something between 10 and 20%.
Tim: But you know in our 10-K, we do have some pretty good disclosure over the past year in terms of blended disclosure both sector oriented the valley, but it has charge backs discounts and fees laid out government and other rebates and returns.
Tim: What you can see there is a provision related to sales in the current year that gets you kind of to the midpoint of that that's on a historical basis.
We don't say what that is going forward, but.
Tim: But just sort of towards the middle.
Steve Seathouse: I just have one clarification, because Adam mentioned I think sampling, you didn't see a sampling increase in 1Q so far. I'm just curious, is that relative to 4Q or relative to what? Because in 4Q it was down, I think, relative to, like, it was 6, we just reported 6,400 relative to 10,000 in the prior quarter. So I'm just curious, what's the reference point for that comment?
Speaker Change: Thanks, so much.
Speaker Change: One clarification, because Adam mentioned I think sampling.
Speaker Change: Didn't see sampling increase in <unk>. So far I'm, just curious is that relative to <unk> or relative to what because <unk> was down I think relative to I think it was six what we just reported 6400 relative to 10000 in the prior quarter. So Im just curious whats the reference to.
Speaker Change: What's the reference point for that comment.
Adam: Yeah, I was a little surprised. Our assumption going in was that this was the first January and February we've had where recertifications were new to us. So, our assumption prior to that was that, you know, some physicians would reach for a sample during this process. But I actually think that, you know, our sampling rate was relatively flat, did not increase, and it did not increase versus Q4 too dramatically.
Speaker Change: Yes.
Speaker Change: I was a little surprised I'll be honest with you our assumption going this was the first January and February we've had right with recertification were new to us So our assumption prior to that it was.
Speaker Change: Some physicians would reach for example, during this process, but I actually think.
Speaker Change: That.
Speaker Change: Our sampling rate was relatively flat did not increase it did not increase versus Q4, two dramatically and I think that's because we were.
Adam: And I think that's because we were, you know, relatively efficient in getting through the re-verification. So, my assumption on sampling going up prior to those months turned out to be wrong. So, I do expect sampling to continue. I do expect it to be flat quarter-on-quarter. As we drive new accounts to start, they tend to reach for less samples. And with our J-code, it's very easy for these accounts to get reimbursed for Cypher. I hope that answers your question. Yeah, thanks so much.
Speaker Change: Relatively efficient and getting through the re verification process. So my assumption on sampling going up prior to those months tie that turned out to be wrong. So I do expect <unk> to continue I do expect it to be continue to be flat quarter on quarter.
Speaker Change: As we drive in overdue accounts to start they tend to reach for less samples.
Speaker Change: Without J code, it's very easy for these accounts to get reimbursed for <unk>. So.
Speaker Change: Hopefully that answers your question yes.
Speaker Change: Yes, thanks, so much.
Colleen Cussey: One moment for our next question. Our next question comes from Colleen Cussey with Bayard. Your line is open. Great, thanks. Good morning.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Colin <unk> with Baird. Your line is open.
Colin: Great. Thanks, Good morning, Congrats on the progress a couple of commercial questions from us what share of the patients on cycle ever today are receiving bilateral injections versus one injection.
Adam: Congratulations on the progress. A couple of commercial questions from us. What share of the patients on cyfovery today are receiving bilateral injections versus one injection or an injection in one eye? And then following up on Caroline's comment about patients with wet AMD, are you seeing those patients able to get their cyfovery and VEGF injections on the same day? Or are those injections typically being. Hey, Colleen, it
Colin: And then following up on Caroline's comment about patients with wet AMD are you seeing those patients able to get their size ovary and VEGF.
Colin: Injections on the same day or those injections typically being staggered.
Colin: Hey, Collin, it's Adam so yes.
Adam: So, yes, we were expecting bilateral treatment to be a core piece of our launch. And then, obviously, during the rare episodes of vasculitis last year, we did see that bilateral usage slowed down. We are seeing a return to bilateral usage. We are seeing physicians change their approach in how they administer bilateral therapy. They'll start potentially with one eye, and they'll wait a little bit and see how that progresses, and then they'll move to the second eye.
Adam Townsend: We were expecting bilateral treatment should be.
Adam Townsend: A core piece of our launch and then obviously during the ramp access the vasculitis last year, we did see that bilateral usage slowed down.
Collin: We are seeing a return to bilateral usage, we are seeing physicians change their approach and how they administer bilateral.
Collin: <unk> in our wave a little bit and see how that progresses, and then they'll move to the second half. So we are seeing bilateral usage increase I think.
Caroline: So we are seeing bilateral usage increase. I think that's very positive as physicians start to really understand the benefit-risk profile of this drug and be able to have those conversations with patients. Anything Caroline you want to add to that? I think it's very common to have treatment with an antivirgin in one eye, and if they need treatment with different products, including Cyfovery in the other eye, to do that on the same day. But there's no generalizable formula for how retinal doctors work.
Collin: It's very positive as physicians start to really understand the benefit risk profile of this drug and be able to have those conversations with patients.
Collin: Caroline you want to add on bilateral.
Caroline: I think it's very common to have patients had treatment with an anti VEGF when one IME.
Caroline: Chicken with different products, including <unk> and the other I can do that on the same day.
Speaker Change: But theres no general general Generalizable formula to how retinal doctors, where I will say one thing that retina doctors, let me like flexibility and four.
Caroline: I will say one thing that retinal doctors really like is flexibility. And fortunately, we have that in our label, with this very flexible treatment interval between our label, so it can really be tapered to what works for you. Great, thanks for taking our questions. One moment for our next question. Our next question comes from Phil Nadeau with TD Coward, and your line is open. Good morning. Thanks for taking our questions. A couple on the U.S. market.
Speaker Change: Fortunately, we have that in our labor with its very flexible treatment interval between our label. So it can really be papered, what works for the patient.
Speaker Change: Great. Thanks for taking my questions.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Sean <unk> with PD Cowen Your line is open.
Sean: Good morning, Thanks for taking our questions a couple on the U S market first over the summer right. After the vascular events were first found I think you did a physician survey where you showed about one third of physicians that stop using safe over one third stopped using a new patients for continuing patients and then.
Phil Nadeau: First, over the summer, right after the vascularized events were first found, I think you did a physician survey where you showed about one-third of physicians had stopped using cyfovir in new patients, but continued to use it in existing patients, and then, one-third; there was no change. Do you have a sense of how those numbers stand today? What proportion of physicians are still not using cyfovery versus what proportion have returned their use to normal? That's the first question. And then the second question, a follow-up to Yigal's, on the 90% share, what do you attribute that to? Is it the two-year data that you have versus the two-year data that I surveyed? presented, or is it execution issues? What do you think is enabling the 90% share that you currently have? Hey, Phil. It's Adam.
Sean: Third there was no change do you have a sense of how those numbers stand today, what proportion of.
Sean: Physicians are still not using say for every versus what proportion have returned their use to normal.
Speaker Change: The first question and then the second question a follow up to you guys on that.
Speaker Change: <unk>, 90% share what do you attribute that to is it is it the two year data that you have versus the two year data surveys.
Speaker Change: Surveys.
Speaker Change: Presented or is it execution issues.
Speaker Change: What do you think is enabling the 90% share that you currently have.
Adam: Thanks for the question. So, yes, we haven't done any new research since the last wave of what I call the third, a third, a third. One thing we have seen anecdotally is that each of those segments have started to use Cyphobria again. So, the segment that has stopped, we really spent time with those physicians. We were there, we were being incredibly transparent about these rare cases of vasculitis, and we waited.
Speaker Change: Hey, Phil it's Adam Thanks for the question. So yes, we haven't done any new research since the last wave of the what I call a third a third a third.
Adam Townsend: One thing we have seen anecdotally is that each of those segments have started to use slide fabry again, so the segment that has stopped.
Adam Townsend: We really spent time with those physicians we were there we were being incredibly transparent about these rare cases of vasculitis and we waited and once those physicians were ready.
Adam: And once those physicians were ready, we then stepped back up. And so we've started to see physicians that had stopped start again. Same for the segment of new patients only. Again, we've had a couple of physicians that I know of anecdotally that have said, no, I've started new patients again based on the benefit-risk profile of the drug. And we continue to see growth in those accounts that did not stop. They continue to see the benefit of this drug. So whilst we haven't done that wave of market research again, I do believe we're really making an impact. Thank you. Now, the second part of your question, the 90%, is... I think it's down to a lot of things, right?
Adam Townsend: We then step back up and so we've started to see.
Adam Townsend: Physicians that had stopped restart.
Adam Townsend: Same for the segment of new patients only again, we've had a couple of physicians.
Adam Townsend: Organic totally that have said no I started new patients again based on the benefit risk profile of the of the drug and we continue to see growth in those accounts that did not stop they continue to see the benefit of this drug so whilst we don't have.
Adam Townsend: Haven't done that wave of market research again, I do believe wouldnt really impacting those three segments now.
Adam Townsend: Second part of your question the 90% is.
Adam Townsend: I think it's down to two a lot of things right.
Adam: Continued strong execution from the team, particularly over the last few months. We've been incredibly transparent with the Redmond community, and I think we've spent a lot of time building trust and cooperation. Physicians now, I believe, truly see the benefits of our overall clinical profile. So this is long-term efficacy from Gail, and real-world safety in over 200,000 doses. Dosing flexibility, you know, the vast majority of physicians, as I said before, are leaning towards six to eight weeks.
Adam Townsend: Continued strong execution from the team, particularly over the last few months.
Adam Townsend: Been incredibly transparent with our vendor community and I think we spent a lot of time building trust and confidence.
Adam Townsend: Physicians now I believe truly see the benefits of our overall clinical profile. So this is long term efficacy from Gail real world safety and over 200000 doses since launch dosing flexibility.
Adam Townsend: The vast majority of physicians as I said before leaning towards six to eight weeks, we have strong payer coverage.
Adam: We have strong payer coverage, and with our JCODE from October 1st, I think it's all of those things coming together, but the efficacy profile of this drug, I think, stands up high.
Adam Townsend: Without J code from October the first I think it's all of those things coming together, but the efficacy profile of this drug I think stands up high and this is a drug you choose for its efficacy the impact it can have on patients' vision moving forward. So we are laser focused on communicating our.
Caroline: And, you know, this is a drug you choose for its efficacy and the impact it can have on patients. We are laser focused on, you know, communicating our benefit, risk, and the benefit of this drug with physicians. I think that will work. Caroline, anything you want to add?
Adam Townsend: Benefit risk.
Adam Townsend: And the benefit of this drug with physicians I think time will make a difference Caroline anything you want to add I think it's that.
Caroline: I think it's like, to hone a little more on the efficacy story. The fact that we have the data from Gale with up to three years of data now, they really appreciate that this data is so thoughtful and also includes visual function with up to 42% reduction in GA region growth. That's something that's amazing.
Caroline: Just to hone in a little more on the efficacy story. The fact that we have the data from Gail with up to three years of data now.
Caroline: Really appreciate that this data so thoughtful and also includes visual function with up to 42% reduction in <unk> well, that's something that's amazing and the fact that every other month dosing into gale and non portfolio of patients is so meaningful so the first thing for <unk>.
Phil Nadeau: And the fact that every other month, Yigal in non-symphobial patients is so meaningful. So the first thing for physicians is the efficacy story, the experience with the company, and then their experience using the product. And that's sort of where doctors are getting that experience. Now, the initial patients who came in were with physicians who were in our clinical study, which was so large, and now we're reaching all the other physicians. That's very helpful.
Caroline: <unk> is the efficacy story the experience with the company and then their experience using the product and Thats sort of where patients doctors are getting that experience now the initial patients who came in were with physicians who are in our clinical study, which was so large and now we're reaching all the other physicians.
Caroline: And the community.
Akesh Terwari: Thank you. One moment for our next question. Our next question comes from Akesh Terwari, with Jeffries. Your line is open. Hi, good morning. This is Ayubian Prakash. Thanks for taking our questions. We just have two quick ones on Safari.
Speaker Change: That's very helpful. Thank you.
Speaker Change: Well remember for <unk> syndrome.
Speaker Change: Our next question comes from <unk> <unk> with Jefferies. Your line is open.
Jefferies: Hi, Good morning. This is <unk>. Thanks for taking all my questions. We just have two quick ones on February <unk>.
Adam: So, when we spoke to our team heading to the train, you felt confident that the long-term split between Safari and either way could be somewhere around, like, 70 and 30. So, given that a competitor has commented on their call that either way is currently taking 20% market share after 5 months of launch, how do you feel comfortable that you can maintain this 70 and 30 split in the long term?
Jefferies: We spoke to our Kim heading the train you had felt confident that the long term split between safari and either way it could be somewhere around like 70, 30, So given competitive her house commented on their call that either way is currently taking 20% market share of the final month of launch how do you feel comparable that you can maintain.
Jefferies: This 17 30 point in the long term and then secondly, just quickly why do you have in your guidance for <unk> 'twenty four and do you plan to guide in later quarters. Thanks.
Adam: And then secondly, just quickly, why haven't you guided Sephora reps for 24 hours, and do you plan to guide in later quarters? Thank you so much for that question. Sure. Hi Ivy. It's Adam.
Speaker Change: Thank you so much for that question.
Speaker Change: Sure Hi, Ivy Hill.
Adam: So, yeah, Estelis has said they have a 20% market share. But, as I discussed previously, there are multiple ways you can estimate market share. Our assumption is that Estelis is using total vials shipped for a specific time period.
Kim: Yes, as benefits that they have a 20% mark.
Speaker Change: Sure as I discussed previously there are multiple ways you can estimate market share our assumption is that our.
Speaker Change: <unk> is using total vials shipped for a specific time period, so that last quarter versus last quarter. What we do is we use real world ECP injection data, which is a snapshot of the current market where physicians.
Adam: So, their last quarter versus our last quarter. What we do is we use real-world ECP injection data, which is a snapshot of the current market where physicians are, you know, ordering vials and using vials. And we think this is actually a better way of analyzing the market because it actually counts injections rather than looking at file shift or revenue.
Speaker Change: Ordering files and using vials and we think this is actually a better way of analyzing market share it actually counts injections, rather than looking at bottles shipped or revenue.
Adam: And obviously, there's a total market analysis that we would do. So we're confident that we are number one. We also did a time-adjusted analysis of our launch versus the competitor's, and if you time-adjust so that you assume they both launched on the same day, ECP, or physician, demand for cyfovir was three times greater than that of either in the first four months. So that's an incredibly positive list. We also see that the majority of new patient starts continue to be on Cyfovery. And just another point, right? Keep in mind that this market is much larger than we believed, you know, from 1 million patients to 1.5 million. I think it can accommodate more than one product, but we truly believe that we are the number one product, and we expect to maintain that leadership over time.
Speaker Change: And obviously there is a total total market analysis that we would do so we are confident that we are the number one.
Speaker Change: GI drug out that we also did a time adjusted analysis of all launch versus the competitive launch and a view time adjusted that you assume they both launch on the same day.
ECP or physician demand a FIFO rate was three times greater than that of either way in the first four months of launch.
Speaker Change: So that's an incredibly positive metric.
Speaker Change: We also see that the majority of these new patient starts continues to be onsite delivery.
Speaker Change: Just another point right keep in mind that this market is much larger than we believed from 1 million patients to one five I think it can accommodate more than one product, but we truly believe that we are the number one product and we expect to main that maintain that leadership overtime.
Adam: So hopefully, that answers your question, Ivy. I think I'll hand it to Tim for the next one. I'll take the guidance questions. Obviously, after the past year, we felt we needed a little more time before we could guide effectively and, you know, case in point, you know, we've never been through a first quarter where we had recertifications or the like.
Speaker Change: Hopefully that answers your question Ivy I think I'll hesitate for Peter I will take the guidance question. So.
Speaker Change: Obviously after the past year, we felt we needed a little more time before we could guide effectively and case in point, we've never been through our first quarter, where we have re certifications or or the like.
Tim: So, you know, we're just going to take our time and make sure we understand the dynamics over the course of a full year. And, you know, we'll get back to you on when we plan to guide. One moment for our next question. Our next question comes from Ellie Merle with UBS. Your line is open.
Speaker Change: So we're just going to take our time and make sure we understand the dynamics over the course of our full year and we'll get back to you on when we plan to guide thanks.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Ellie Merle with UBS. Your line is open.
Ellie Merle: Hi Guys, thanks for taking the question and congrats on all the progress. I just want to follow up on the quarter-over-quarter growth question asked earlier. You said you're seeing January and February as two of the strongest months since launch, and the sampling rate did not increase. So, shouldn't 1Q be higher than 4Q? I guess, how do we balance that with the seasonality commentary?
Ellie Merle: Oh, Hey, guys. Thanks for taking my question and congrats on all the progress.
Ellie Merle: Just wanted to follow up on the quarter over quarter growth question asked earlier, you have youre seeing in January and February of two of the strongest month since launch and the sampling rate did not increase though so that <unk> be higher than <unk> I guess, how do we balance that with the seasonality commentary I just want to clarify on that point.
Adam: I just want to clarify on that point. And then, just a second question, in terms of compliance and dosing frequency, are you seeing any trends and differences in compliance or dosing frequency at different types of sites, such as private equity-owned versus academic? Hi Annie, it's Adam. So, yeah, so we've been, you know, seasonality does impact drugs within this market. As I said, I used the analogs that we found from the Anti-VEG-S. We did see recertifications happen a lot in January and leak into February, and they had an impact on the weather.
Ellie Merle: And then just a second question in terms of compliance from dosing frequency are you seeing any trends in differences in compliance or dosing frequency at different types of sites such as private equity owned versus academic.
Ellie Merle: Hi, Anthony it's Adam so yes.
Adam Townsend: Yes, so we've bid season.
Adam Townsend: Seasonality does impact.
Adam Townsend: Drugs within this market as I said I used the analogs that we found from the anti VEGF.
Adam Townsend: We did see recertification happen a lot in January it leak into February and impacted on the weather. We do believe that January and February are likely to be two of our largest months. So with we're executing flawlessly and pushing to make Q1 as big as it possibly can be by being.
Adam: We do believe that, you know, January and February are likely to be two of our largest months. So we're, you know, executing flawlessly and pushing to make Q1 as big as it possibly can be by being incredibly thoughtful in how we interact. So, you know, the team is flawlessly executing, I'm incredibly proud of them, and we're pushing incredibly hard. As you would expect us to, we believe we have the number one GA drug. Compliance. As I said, it's a touch early for compliance. We tend to see the vast majority of patients for six to eight weeks, and they seem to be very comfortable with that.
Adam Townsend: Credibly thoughtful in how we interact with these physicians.
Adam Townsend: So.
Adam Townsend: The team is flawlessly executing I'm incredibly proud of them and with pushing incredibly hard as you would expect us to.
Adam Townsend: We believe we have the number one Gi truck moving forward.
Adam Townsend: Compliance.
Adam Townsend: It's a touch Ali for compliance we tend to see the vast majority of patients being six to eight weeks and they seem to be very comfortable with that.
Adam: We have not noticed any difference that I'm aware of between compliance at PE-backed practices versus non-PE-backed practices. We have a nice, wide range of businesses, right? So PE-backed practices are about 30% of our business, and the rest, the remaining 70%, are independent practices and academic practices. To my knowledge, we haven't seen any differences in terms of compliance between those groups. As I said, we just exited the first year. I think as we get into years two and three of treatment with this drug, that's when physicians will have to have a conversation with their patients about compliance, but it's too early. Great. One moment for our next question. Our next question comes from Francois Bisvois with Oppenheimer. Your line is open. Hi, this is Dan Fangone on behalf of Frank Riesbaugh.
Adam Townsend: We have not noticed any difference that I'm aware of between compliant the pea back practices versus non piggyback practices.
Adam Townsend: Have a nice wide range of business right back.
Adam Townsend: Practices are about 30% of our business and the rest the remaining 70% independent practices that academic practices to my knowledge, we haven't seen any differences in terms of compliance from those those groups.
Adam Townsend: We just exited the first year I think as we get into years, two and three of treatment with its drop that's when physicians will have to have a conversation with with that patients back from clients, but it's too early for that.
Speaker Change: Okay, great. Thanks.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Francois <unk> with Oppenheimer. Your line is open.
Speaker Change: Hi, This is Dan <unk> on for Frank Thanks for taking my questions.
Cedric Francois: Thanks for taking our questions related to a question regarding the physician segments from the market research now that the permanent J-code is effective and the Gale Extension readout. Are you starting to see an impact within that one-third segment of physicians who are on the sidelines? Yes, thanks for the question. So, obviously, we haven't redone that market research, but we are starting to see an impact from physicians who are on the sidelines. The J-code unlocked all of that.
Dan: Related to your question regarding the transmission segments from the market research.
Dan: Now with Department of J code effective and the Gale extension readout are you starting to see an impact within that.
Dan: One third segment of physicians, who are on the sidelines.
Speaker Change: Yes, thanks for the question so yes.
Speaker Change: Obviously, we haven't redone that market research that we are starting to see.
Speaker Change: And the impact form physicians, who are on the sideline that J code unlocked toward a that we continue it's my favorite metric, we continue to see double digit new account sign up to use <unk>.
Adam: We continue, it's my favorite metric. We continue to see double-digit new accounts sign up to use CyphoRead every week since launch. That has continued, which tells you that these physicians are no longer on the sidelines. They keep starting to want to start patients, so I think that's an incredibly positive metric. So yeah, whilst we haven't done the research anecdotally, we're hearing that those physicians who were on the sidelines have started to go. We do have some upside opportunity, too, right?
Speaker Change: Every week since launch that has continued that tells you that these physicians are no longer on the sidelines that keep starting to want to start patients I think that's an incredibly positive metric for us. So yes, whilst we haven't done the research anecdotally. We are hearing that those physicians who are on the sidelines.
Speaker Change: Started to go we do have some upside opportunity right. So.
Adam: So, you know, we have about 1,800 sites of care across the US. That's about 50% of our potential target list. So there's still an opportunity for growth for us to target that other half of the market, and we have some good plans to go and execute on that, which we started in the first quarter and expect to move into the rest of the year. So hopefully, that answers your question. And that's it. Congratulations on the quarter.
Speaker Change: We have about 1800 sites of care across the U S. That's about 50% of our potential target list. So there's still an opportunity for growth for us to target that other half at the market and we have some good plans to to go and execute that.
Speaker Change: We started in the first quarter and expect to move into the to the rest of the year. So hopefully that answers your question.
Speaker Change: Understood Congrats on the quarter.
Joseph Stringer: Thank you. Thank you. One moment for our next question. Our next question comes from Joseph Stringer with Needham. Your line is open. Hi, good morning, and thanks for taking our question. Just a quick one on potential switching dynamics.
Speaker Change: Yes.
Speaker Change: Thank you. Thank you one moment for our next question.
Speaker Change: Yes.
Our next question comes from Joseph Stringer with Needham Your line is open.
Joseph Stringer: Hi, good morning, and thanks for taking our question just a quick one.
Joseph Stringer: On potential switching dynamics, just curious if you could provide any metrics or data or even qualitative feedback that you're hearing so far on.
Joseph Stringer: Just curious if you could provide any metrics or data or even qualitative feedback that you're hearing so far on any switching dynamics between cyphobria and rape? Yeah, I think so. Thank you so much, Joey. Great to hear from you. Look, that is a place where I think we are very well positioned as well. At the end of the day, where the metrics will stand out is the comparator between efficacy and safety, right? So, and on efficacy, you know, quite frankly, the difference is quite stark, right? I mean, as mentioned before, in extra foveal patients, up to 42% slowdown versus what has so far been reported as 14, even though we don't know what it is exactly in the second year for our competing product.
Joseph Stringer: Any switching dynamics between safe O'brien is it right.
Speaker Change: Yes, I think.
Speaker Change: So it's really great to hear you.
Speaker Change: That is a place where I think we are very well positioned as well.
Speaker Change: At the end of the day, where the metrics will stand out as the comparator between on an efficacy as well as on safety right. So and on the efficacy quite frankly, the difference is quite stark with I mean as mentioned before on extra fulfill patients up to 42% slowdown versus what has so far been reported this 14.
Speaker Change: Even though we don't know what it is exactly in the second year for a competing product.
Joseph Stringer: And then maybe briefly on safety, right, that risk that exists on the first injection of developing vasculitis, which is very rare, is something that we now firmly believe is caused by a pre-existing allergy to polyethylene glycol, something that is shared between the products. And, you know, we have every reason to expect that both products in the future will have that risk, a rare risk associated with them, that will then have to be discussed with the Yeah, hey, Joe, it's Adam.
Speaker Change: And then maybe briefly on the safety right.
Speaker Change: That risk that exists on a first injection of developing vasculitis, which is very rare is something that we announced Germany belief is caused by a pre existing.
Speaker Change: Allergy towards polyethylene glycol, something that is shared between the products and we have every reason to expect that both products in the future. We will have that risk rare risk associated with it that will then has to be discussed with the patients when the treatment plant.
Speaker Change: Adam do you want to add substances, Yeah, Hey, Jerry as Adam said, yes, no surprise right during.
Cedric Francois: So yes, no surprise, right? During the rare cases of vasculitis last year, we did see some accounts switch. They switched primarily for safety, and we know where those accounts are.
Adam Townsend: The rate cases of vasculitis last year, we did see some accounts.
Adam Townsend: <unk>.
Adam Townsend: They switched primarily for safety.
Adam Townsend: And we know where those accounts are now again anecdotally I have actually seen some.
Adam: Now, again, anecdotally, I have actually seen some physicians switch patients back. So I have seen and heard from my field teams that physicians switched from Syphovir to Compesta, and then some of those patients were switched back. So switching does happen in this market. It definitely happens.
Adam Townsend: Physicians switch patients back so I have seen and heard from my field teams that physicians switched from <unk> to the competitor and then some of those patients with switched back so switching does happen in this market it definitely happened.
Adam: It definitely happened in the rare cases of vasculitis, but we believe in the profile, the efficacy, the safety, and the benefit-risk profile of this drug, and we truly will be focused on making sure we communicate that profile to everybody. Great. Thanks so much for the call. Our next question comes from Derek Archilla with Wells Fargo. Your line is open.
Adam Townsend: It definitely happened during the day rate cases, the vasculitis, but we.
Adam Townsend: We believe in the profile of the efficacy and the safety and the benefit risk of this drug and we truly will be focused on making sure we communicate that profile to every physician in this market.
Speaker Change: Great. Thanks, so much for the color.
Speaker Change: One moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from Derek <unk> with Wells Fargo. Your line is open.
Derek Archilla: Hey, good morning. Thanks for taking the questions. There are just two on Empaveli.
Derek: Hey, good morning, Thanks for taking the questions just two on <unk> I guess first have you seen any impact from the launch of the co Pan and <unk> and I guess, how much upside do you think there is in the first line setting from the 10% you discussed today and then just overall kind of commercial strategy for <unk> in <unk> and M. P. J M.
Derek Archilla: I guess first, have you seen any impact from the launch of Ithacopan and PNH? And, secondly, how much upside do you think there is in the first line setting from the 10% you discussed today? And then just the overall kind of commercial strategy for Empaveli and C3G and NPGN.
Cedric Francois: Thanks. Thank you so much, Derek, and great to hear from you. Look, at P&H, we now have a very competitive situation, of course, and our expectations should be commensurate with that competitive situation. So, you know, while we don't guide, certainly there will be pressure on this whole product.
Speaker Change: Thank you so much as Eric and Great to hear you look at <unk>, we now have a very competitive situation of course.
Speaker Change #100: And our expectation should be commensurate with that competitive.
Speaker Change #101: The situation.
Speaker Change #102: So while we don't guide certainly there will be pressure from this world products I think in general, though that it is a great thing that there are now two products available to address the problem of extra vascular hemolysis in these patients. If we go back a couple of years as you may recall, because you were already covering us.
Cedric Francois: I think, in general, though, that it is a great thing that there are now two products available to address the problem of extravascular hemolysis. If we go back a couple of years, as you may recall, because you were already covering us, there was a notion that this was something affecting 7% of patients. That is not true.
Speaker Change #102: There was a notion that this was something affecting 7% of patients.
Cedric Francois: This is something that affects the overwhelming majority of these patients, and a big segment of patients can and will benefit from this. And in that sense, you know, raising the awareness around that, having No Heart Disease by our side will be. As we've mentioned before, we're incredibly excited about what we can do in kidney disease through the readout of the Valiant trial this summer and what we will be able to do for the 5,000 patients with T3G and ICMP that are in need. Adam, do you want to add something to that?
Speaker Change #102: That is not true this is something that affects the overwhelming majority of these patients and a big segment of patients Kevin will benefit from this and in that sense raising the awareness around that having novartis Bayer said will be helpful.
Speaker Change #102: As we've mentioned before.
Speaker Change #102: We're incredibly excited about what we can do in the kidney to the readout of the Valeant trial. This summer and what we will be able to do for the 5000 patients with <unk> that are in need.
Adam: Yeah, you said it really well, Cedric, but just to add a few extra bits, right? So, Derek, you know a twice-a-day oral will be appealing to PNH patients, for sure. We should expect that.
Speaker Change #102: Adam do you want to add something to that yes, you said, it really well et cetera, but just to add a few extra bits right. So derrick.
Adam Townsend: Twice, a day oral will be appealing to to peanuts patients for sure we should expect that.
Adam: In fact, we've seen one or two patients switch from Empaveli to the twice-a-day oral, as you would expect. But the vast majority of our patients are really committed to Empaveli. They see the benefits of the efficacy, they see the benefits of the safety profile, and with the auto-injector, the Empaveli injector, we're really improving that convenience aspect of the drug. So, we're going to be strongly competitive in the market, but oral will have an impact. You asked about the first line segment, right?
Adam Townsend: In fact, we've seen one or two patients switched from <unk> to the.
Adam Townsend: Twice a day oral as you would expect the vast majority of our patients are really committed to a P value. They see the benefits of the efficacy they see the benefits of the safety profile and with the also objected. The <unk> injected we are really improving that convenience aspect of the drug so we're going to be strongly competitive in the market.
Adam Townsend: But an oral will have an impact you asked about the SaaS line segment right. So I do expect we have 10% I do expect that the oral will be used nicely within that first line segment, but I've been around the block a little bit and every time, there's a new entrant into the market.
Adam: So I do expect, we have 10%, I do expect that oral will be used nicely within that first line segment. But I've been around the block a little bit, and every time there's a new entrant into the market, and a conversation is had between a physician and a patient, it's an opportunity for Empaveli. So if a patient has a conversation with a physician about starting on an oral or switching from Ultimiris or Soliris to an oral, that is an opportunity for us to make sure that Empaveli is in that consideration.
Adam Townsend: And our conversation is half between a physician and a patient it's a opportunity for <unk>.
Adam Townsend: Ah patient had the conversation with the physician about starting on an oral or switching from Altamira <unk> soliris to an oral that is an opportunity for us to make sure that <unk> within that consideration set so switching opportunities become particularly important for us during this phase.
Derek Archilla: So switching opportunities have become particularly important for us during this. And just an execution perspective on nephrology, so we obviously have a great Medical Affairs Empa Valley team. We're starting to send that Medical Affairs team to nephrology conferences, and they'll be the face of the nephrology discussions that we have based on the until we see some data in mid-2024. Got it, thank you.
Adam Townsend: And just an execution perspective on nephrology. So we obviously had a have a great medical affairs empathetic team, we're starting to send that medical affairs team to the nephrology conferences.
Adam Townsend: And that will be the face of nephrology discussions that we have based on these conferences et cetera until we see some data mid 2024.
Speaker Change #103: Got it thank you.
Douglas Alwith: One moment for our next question. Our next question comes from Douglas Alwith, from A.C. Wainwright. Your line is open.
Speaker Change #104: One moment for our next question.
Speaker Change #104: Our next question comes from Douglas Tsao with H C. Wainwright Your line is open.
Douglas Alwith: Thank you. Thank you. Hi, good morning.
Speaker Change #104: Hi.
Douglas Alwith: Thanks for taking the questions. Just maybe, as a follow-up on bilateral treatments, presumably there was a slowdown during the vasculitis days. So, should we think that relative to your sort of original expectations in terms of how big a part of the business it was, it is smaller? And are we starting to see some of that catch-up?
Douglas Tsao: Hi, good morning. Thanks.
Douglas Tsao: Thanks for taking the questions just maybe as a follow up on bilateral treatments.
Douglas Tsao: Presumably there was a slowdown during the vasculitis days, so should we think that relative to your sort of original expectations in terms of how big a part of the business. It was it is smaller and are we starting to see sort of some of that catch up and so should we think about that as sort of some amount of pent up.
Douglas Alwith: And so, should we think about that as sort of some amount of pent-up demand from patients who are on cyfovirate but only getting one eye treated but eventually should most likely convert to bilateral treatment? Thank you. I think that it's likely that
Douglas Tsao: Demand of patients who are on site for free, but only getting one eye treated but essentially should most likely convert to bilateral treatment. Thank you.
Douglas Tsao: I think that.
Douglas Tsao: It's likely that physicians will once they are comfortable and patients had gotten past the first injection ourselves and they will be using bilateral patients just out of out of convenience that is patients to only have to come in one.
Douglas Alwith: Thank you. So, you know, now that we have such a large number of vials that have been used and the robust patient experience to date, I think that will. Yeah, Doug, it's Adam, just to add, you know, I think.
Douglas Tsao: So.
Douglas Tsao: Now that we have such a large number of miles that have been used in the.
Douglas Tsao: Robust patient experience to date I think that we're approaching that.
Douglas Tsao: Yes, Doug it's Adam just to add I think.
Adam: I think the bilateral usage was definitely impacted, as you said. I expect that to come back, but it's going to be time-delayed as we start to communicate with all of these physicians. They've changed their practice on how they do bilateral injections, the process of how they do it, differently based on what happened last year. I don't think it impacts the opportunity.
Adam Townsend: I think the bilateral usage was definitely impacted as you said I.
Adam Townsend: I expect that to come back, but it's going to be time delayed right as we start to.
Communicate with all of these physicians they've changed that practice on how they do bilateral injections. How is the process of how they do it different based on what happened last year.
Adam Townsend: I don't think it impacts the opportunity I think thats, just a time delay as physicians get comfortable.
Adam: I think that's just a time delay as physicians get used to... No, no, no. And I think my sort of question was, is that when we think about a certain number of patients on cyfovery today, presumably a higher proportion are just having a single eye treated than you might originally anticipated. But we should expect those to eventually catch up. So, on a, like, we should see vials per patient increase relative to where we are. I think you should expect to see bilateral symmetry.
Adam Townsend: Yes.
Adam Townsend: I think my sort of question was just when we think about a certain number of patients on safe over today, presumably a higher proportion are just having a single eye treated than you might have originally anticipated, but we should expect those to eventually catch up.
Adam Townsend: On a like we should see vials per patient increased relative to where we are.
Adam Townsend: I think you should expect to see bilateral increase yes moving forward.
Douglas Alwith: Yeah. Okay, great. Thank you. One moment for our next question. Our next question comes from Garrix Aveneve with Mizzou Health Security. Thank you. Thank you for taking my questions. Just two, please.
Speaker Change #106: Okay, great. Thank you.
Speaker Change #106: Okay.
Speaker Change #107: Number four our next question.
Speaker Change #107: Our next question comes from Garik <unk> with Mizuho Securities.
Speaker Change #107: Yeah.
Garik: Hey, good morning, Thank you for taking my questions and congratulations on the quarter. Just two please one I might have missed this before but just on the.
Garrix Aveneve: One, I might have missed this before, but just on the European reexamination. I'm going to stop sharing my screen and let you guys clarify. Thank you. Thank you, during this reexamination period, whether you are able to provide additional data or new analyses, two new rapporteurs, you. And then my second question, please.
Garik: The European Reexamination process could you just clarify.
Garik: Or me weather as a company during this reexamination period, whether you are able to submit additional data or new analyses or is it.
Garik: Now the two new rapid tours.
Speaker Change #109: I'll provide just a fresh view.
Speaker Change #109: <unk> stated that was.
Speaker Change #109: Included in the original dossier. So that's my first question. My second question. Please just a reminder, on the safety profile. It looks like <unk> has the rate of basking latest change in terms of either increasing or potentially decreasing or is it essentially the same. Thank you.
Cedric Francois: A reminder on the safety profile of cyfovir has the rate of decreasing, or is it? Thank you so much. Great to hear from you. First of all, in the European Union, so you are not allowed to include new data, but you are allowed to include new analyses, right?
Speaker Change #110: Thank you so much great great to hear your first of all on the European Union. So you are not allowed to include new data that you are allowed to include new analyses. So that is something that we.
Cedric Francois: So, that is something that we, that our team has really done well. And again, especially the microperimetry data. We'll see what happens. As we mentioned, an uphill battle, but one that we are excited about. As it relates to safety, the rate continues to be at 0.01%, where it has been since July. And of course, that stability provides a very good context for physicians to disclose to their patients when they speak with them as to what the risk in front of them is versus the benefit that they can get from being on treatment. So unchanged, again, these cases are so rare that for a rate change to become manifest, we're going to have to wait. So unchanged again, these cases are so rare that for a rate change to become manifest, And I'm not showing any further questions at this time.
Speaker Change #111: That our team has really done well and again, especially the micro perimetry data is really compelling. So we will see what's going to happen as we mentioned uphill battle, but one that we are excited to take out.
Speaker Change #111: As it relates to the safety the rate continues to be at 0.0% to 1% to where it has been since July and of course that stability provides very good context for physicians to disclose to their patients when they speak with them.
Speaker Change #111: As to what the risk in front of them is versus the benefit that it can get from being on treatment. So unchanged. Again. These cases are so rare that for a rate change to become manifest but are going to have to wait quite a bit.
Speaker Change #111: Okay.
Speaker Change #111: And I'm not showing any further questions at this time I'd like to turn the call back over to Cedric for any closing remarks.
Cedric Francois: I'd like to turn the call back over to Cedric for any closing remarks. Thank you so much, everyone, for joining us. It is a great start to the year for us, and we look forward to sharing much more with all of you as the months come by. And for those of you available later today, we will be here to take questions and answer any further inquiries. Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day! www.mooji.org Copyright 2020 Mooji Media Ltd. All Rights Reserved.
Speaker Change #111: Yes.
Cedric Francois: Thank you so much everyone for joining us.
Cedric Francois: Great start to the year for us and we look forward to sharing much more with all of you as the months come back.
Cedric Francois: And so for those will be available later today, we will be here to take your questions and answer any further inquiries that you may have thank you.
Speaker Change #112: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
Speaker Change #112: [music].