Q4 2023 bluebird bio Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to Bluebird Bio's fourth quarter and 2023 annual results conference call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by and welcome to Bluebird Bio fourth quarter and 2023 annual results conference call. At this time, all participants are in a listen only mode.

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'll then hear an automated message advising that your hand is raised.

After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you'll didn't hear automated message advising your hand. This race to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today.

Operator: To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Courtney O'Leary, Investor Relations. Please go ahead.

Speaker Change: Accordingly, O'leary Investor Relations. Please go ahead.

Courtney O'leary: Good morning, everyone, and thank you for joining our fourth quarter and 2023 annual results call today. My name is Courtney O'Leary, Director of Investor Relations at Bluebird Bio. Before we begin, let me review our safe harbor seat. Today's discussion contains statements that are forward-looking under the Private Securities Litigation Reform Act of 1995, including expectations regarding our future financial results and financial position, in addition to statements of the company's plans, expectations, or intentions regarding regulatory progress, commercialization plans, and business operations. Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results.

Good morning, everyone and thank you for joining our fourth quarter and 2023 annual results call today.

Corneal Dairy: My name is corneal dairy director of Investor Relations at Bluebird bio.

Speaker Change: Before we begin let me review our Safe Harbor statement. Today's discussion contains statements that are forward looking under the private Securities Litigation Reform Act of 1995, including expectations regarding our future financial results and financial position. In addition to statements of the Companys plans expectations oriented.

Speaker Change: Regarding regulatory progress commercialization plans and business operations.

Speaker Change: Statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results. A description of these risks is contained in our filings with the SEC, which are available on the Investor Relations section of our website www.

Courtney O'leary: A description of these risks is contained in our filings with the SEC, which are available on the investor relations section of our website, www.bluebirdbio.com. On today's call, Andrew Obenshain, Bluebird Bio's CEO, will provide a general corporate update. And then Tom Klima, Chief Commercial and Operating Officer, will discuss progress on the commercial launches of Lifgenia, Zynteglo, and SkySona. And finally, Chris Krawtschuk, Chief Financial Officer, will provide a financial update before opening the call for Q&A. With that, I will turn it over to Andrew. Thanks, Courtney.

Speaker Change: Bluebird bio dotcom.

Speaker Change: On today's call Andrew Urban Shane Bluebird Bio's, CEO will provide a general corporate update and then Tom can be my chief commercial and operating officer will discuss the progress on the commercial launches uplift journey up from tableau and Sky sonar and finally, Chris Koch, Our Chief Financial Officer will provide a financial update before opening the call up for Q&A.

Speaker Change: With that I will turn it over to Andrew.

Andrew Obenshain: And thank you everyone for joining the call this morning as we provide an update on our fourth quarter 2023 results, discuss our strategic outlook, and plan milestones for 2020. Earlier this morning, we put out an 8K announcing that we will be restating financial information for 2022 and for the first three quarters of 2023 and that we've submitted an extension on our 10K filing. We now anticipate filing the 10K, inclusive of that restatement, no later than April 16. Importantly, the restatement does not impact our cash position or revenue.

Andrew Obenshain: Thanks, Courtney and thank you everyone for joining our call. This morning, as we provide an update on our fourth quarter 2023, and our results discuss our strategic outlook and plan milestones for 2024.

Andrew Obenshain: Earlier. This morning, we put out an 8-K announcing that we will be restating financial information for 2022 and for the first three quarters of 2023.

Submitted an extension on our 10-K filing we now anticipate filing the 10-K inclusive of that restatement no later than April 16th.

Andrew Obenshain: Importantly, the restatement does not impact our cash position or revenue.

Andrew Obenshain: Chris will discuss this in greater detail later in the call. 2023 was a year of significant progress for Bluebird. We established ourselves as a commercial gene therapy leader with a validated commercial strategy that brought both Zantaglo and Skysona to patients across the US. Our recent commercial progress for Lithuania builds on that foundation, with the only FDA approval of Genia for sickle cell disease. Last December, Bluebird is currently the only commercial gene therapy company with three FDA-approved products.

Andrew Obenshain: Chris will discuss this in greater detail later in the call.

Andrew Obenshain: 2023 with a year of significant progress for Blue Bird, we establish ourselves as a commercial gene therapy leader with a validated commercial strategy that brought both tableau and sky sooner to patients across the U S.

Andrew Obenshain: Our recent commercial progress for the junior builds on that foundation.

Andrew Obenshain: Would you only with the FDA approval of Australia for sickle cell disease last December Bloomberg is currently the only commercial gene therapy company with three FDA approved products.

Andrew Obenshain: Since then, our commercial team has hit the ground running to position ourselves for a strong Lipgenia launch. We've talked before about the benefits of our significant commercial head start with Integlo, and today we are seeing the fruits of that labor translate into real momentum for Lift Genium. We've activated 62 qualified treatment centers and have signed our first outcome space agreement for Medicaid, extending access to Lithgenia to this critical patient population. 2024 is also a fast start, with nine patient starts already this year. Tom will dive deeper into our commercial progress momentarily. Last week, we also announced that we entered into a five-year term loan with Hercules Capital for up to $175 million.

Andrew Obenshain: Since then our commercial team has hit the ground running to position ourselves for a strong with Kenya watch.

Andrew Obenshain: We've talked before about the benefits of our significant commercial I'd start with Taiwan Syntagma out today, we are seeing the fruits of that labor translate into real momentum with Virginia.

Andrew Obenshain: We've activated 62 qualified treatment centers and assigned our first outcomes based agreement for Medicaid extending access to with Jennie O to this critical patient population.

Andrew Obenshain: Yeah.

Andrew Obenshain: In 2024 is off to a fast start with nine patient starts already this year, Tom will dive deeper into our commercial progress momentarily.

Andrew Obenshain: Last week, we also announced that we encountered we entered into a five year term loan with Hercules capital for up to $175 million.

Andrew Obenshain: This transaction provides Bluebird with an infusion of capital that is expected to extend our cash runway beyond the next 24 months. Last August, on our Q2 earnings call, we set out a five-year vision for Bluebird as a standalone commercial gene therapy company. We outline our near-term path to profitability and are expecting additional growth and scale over the next five years. This funding will accelerate that vision to capitalize on the multi-billion dollar opportunity in front of us in the U.S. I will now hand the call over to Tom to highlight the significant progress happening in our commercial launch. Thanks, Andrew. And good morning, everyone.

Andrew Obenshain: This transaction provides a blue bird with an infusion of capital is expect to extend our cash runway beyond the next 24 months.

Andrew Obenshain: Yeah.

Andrew Obenshain: Last August on our Q2 earnings call, we set out a five year vision for Bluebird as a stand alone commercial gene therapy company.

Andrew Obenshain: Outline our near term path to profitability and our expected additional growth and scale in the next five years. This funding forwards that vision to capitalize on the multibillion dollar opportunity in front of us in the U S.

Andrew Obenshain: I will now hand, the call over to Tom to highlight the significant progress happening in our commercial launches.

Thanks, Andrew and good morning, everyone. As Andrew noted 2023 was a pivotal year for Blue Bird, which we built our commercial foundation was integral to beta thalassemia and Skype for cerebral <unk> dystrophy.

Thomas J. Klima: As Andrew noted, 2023 was a pivotal year for Bluebird, in which we built our commercial foundation with Integlo for beta thalassemia and SkySona for cerebral adrenoleukodystrophy. Today, we're capitalizing on that head start to accelerate the launch of Lifgenia for sickle cell disease. As a reminder, our launches are focused on three core elements for success.

Tom: Today, we are capitalizing on the Ed start to accelerate the launch of Virginia for sickle cell disease.

Tom: As a reminder, our launches are focused on three core elements for success.

Thomas J. Klima: First, establishing a robust network of qualified treatment centers, or QTs. These are transplant centers with significant experience in cell and gene therapy. As Andrew mentioned today, we have 62 activated QTs, unparalleled compared to others in the field. Second, ensuring that the value of our therapies is recognized and that patients have timely, equitable access. In a moment, I will dive deeper into our progress on access and reimbursement. And lastly, optimizing the patient and provider experience. Gene therapy is a high-touch business where transparency, collaboration, and understanding the needs of patients, families, and providers are paramount.

Tom: Establishing a robust network of qualified treatment centers or <unk>. These are transplant centers with significant experience in cell and gene therapy as Andrew mentioned today, we have 62 activated <unk> unparalleled compared to others in the field.

Tom: Second ensuring the value of our therapies are recognized and that patients have timely equitable access in a moment I will dive deeper into our progress on access and reimbursement.

Tom: And lastly, optimizing the patient and provider experience gene therapy is a high touch business, where transparency collaboration and understanding the needs of patients families and providers is paramount.

Thomas J. Klima: Our deep understanding of the gene therapy process, our dedicated focus, and our experience over the last 18 months allows us to be a strong partner to our activated QTCs as we help them bring life-changing therapies to their patients. Three months into the Legenia launch, patient demand is strong. I am very excited to share today that we expect our first patient start will be scheduled imminently, and we are extremely encouraged by the number of enrollments and patients preparing for treatment from multiple treatment centers across our QGC network. We anticipate starts for Lipgenia to grow quarter over quarter, with the majority occurring in the second half of the year as momentum builds. We anticipate that the first revenues for Lipgenia will be reported in Q3.

Tom: Deep understanding of the gene therapy process, our dedicated focus and our experience over the last 18 months allow us to be a strong partner to our activated <unk> as we help them bring life changing therapies for their patients.

Tom: Three months into the let Jennie O launch patient demand is strong.

Tom: I am very excited to share today that we expect our first patient start will be scheduled imminently and we are extremely encouraged by the number of enrollments and patients preparing for treatment for multiple treatment centers across our GTC network.

Tom: We anticipate startup.

Starts for <unk> to grow quarter over quarter with the majority occurring in the second half of the year as momentum builds and we anticipate that the first revenues for the Virginia will be reported in Q3.

Thomas J. Klima: Moving to Zenteglo, we continue to see strong linear growth with seven patient starts since the beginning of 2024, in addition to the 20 patient starts completed for Zenteglo in 2023. Additionally, we've completed two patient starts for Sky Sona since the beginning of 2024, in addition to the six patient starts completed for Sky Sona last year. And as a reminder, patient starts, which is when cell collection occurs, remains the key commercial metric to watch in the early stages of our launches, as this is the value-creating moment for the company, with revenue being recognized when the patient is infused. For modeling purposes, you can expect that patients are infused one to two quarters following cell collection. And in our experience, once a patient goes through the cell collection, they continue on the treatment journey. To date, every patient who has started the process has either completed the process or remains in it.

Tom: Moving to <unk>, we continue to see strong linear growth was seven patient starts since the beginning of 2024. In addition to the 20 patient starts completed.

Tom: <unk> in 2023.

Tom: Additionally, we just completed two patient starts for Skype <unk> since the beginning of 2024. In addition to the six patient starts completed for Sky zone of last year.

Tom: And as a reminder, patient starts which is when cell collection occurs.

Tom: <unk> the key commercial metric to watch in the early stages of our launches as this is the value creating moment for the company with revenue being recognized when the patient is if you're confused.

Tom: For modeling purposes, you can expect that patients are infused one to two quarters following cell collection.

Tom: In our experience once the patient goes through the sub collection. They continue on the treatment journey to date every patient who had started the process is either completed the process of remains in the process.

Thomas J. Klima: Going forward, we plan to provide quarterly updates on patient starts for each of our therapies as we work towards the 85 to 105 patient starts we guided to in 2024. Turning to Access and Reimbursement. Gene therapies are one-time transformative treatments and bring tremendous value to the healthcare system and to patients.

Tom: Going forward, we plan to provide quarterly updates on patient starts for each of our therapies as we work towards the $85 to 105 patient starts we guided to in 2024.

Turning to access and reimbursement gene therapies are one time transformative treatments and bring tremendous value to the health care system into patients.

Thomas J. Klima: For years, Bluebird has led the way in articulating the value of gene therapies to payers and charting paths to access for patients. We continue to see timely and timely access for Zantegla and Sky Sona with zero ultimate denials for either therapy across both Medicaid and commercial payers. Payers are recognizing the value of these therapies and the high burden of disease.

For years Bluebird has led the way in articulating the value of gene therapies to Payors and chart a path to access for patients.

Tom: We continue to see timely.

Tom: Timely access was integral in Sky Stoner with zero ultimate denials for either therapy across both Medicaid and commercial payers payers are recognizing the value of these therapies and the high burden of disease.

Thomas J. Klima: And today, we're seeing the same early success with Leuvenia, where our goal is timely, equitable access for patients, and our approach is working. We've designed outcomes-based agreements that are unique to Lifegenia, offering payers meaningful risk sharing tied to VOE-related hospitalizations with patients typically followed for three years. In addition to a commercial office offering, we've designed an offering specifically for Medicaid that addresses the need for predictability and operational ease that is essential for states grappling with resource constraints. Earlier this month, we announced that Bluebird signed its first outcomes-based agreement in Virginia with Michigan's Medicaid program, demonstrating support from government payers for these types of innovative arrangements. We've also signed a total of four commercial outcomes-based agreements for Lithuania, covering more than 200 million lives. In three short months, we've already seen close to 90% of coverage policies covered Lithuania at parity, including policies from major national insurers such as Aetna, Anthem, and Cigna.

And today, we are seeing the same early success with La Virginia, where our goal is timely equitable access for patients and our approach is working well.

Tom: We have designed outcomes based agreements there you need to look at it.

Tom: Offering payers meaningful risk sharing type of bogie related hospitalizations with patients typically followed for three years in.

Tom: In addition to our commercial offers offering we've designed an offering specifically for Medicaid that addresses the need for predictability and the operational ease that is essential for states grappling with resource constraints.

Tom: Earlier this month, we announced the Bluebird signed its first outcomes based agreement for the Ginia with Michigan Medicaid program, demonstrating support from government payers for these types of innovative arrangements.

Tom: We've also signed a total of four commercial outcomes based agreements for Lyft, Kenya, covering more than 200 million lives.

Tom: In three short months, we have already seen close to 90% of coverage policies.

Tom: Covered with journey at parity, including policies from major national insurers, such as Aetna anthem and Cigna.

Thomas J. Klima: We continue to be focused on access for Medicaid patients in 2024, and discussions are ongoing with more than 15 Medicaid agencies representing 80% of individuals with sickle cell disease in the U.S. We are also actively engaged with CMMI on its cell and gene therapy access demonstration that is slated to begin in 2025, which could serve as a bandwidth extender for states who do not have the ability to implement outcomes-based agreements on their own. Moving to our QTC network, one of the most significant advantages of our commercial head start has been our ability to build a synergistic QTC network. We now have 62 active centers, the largest network of qualified treatment centers for hemoglobin apathy. 49 of which are already ready to receive referrals for Lipgenia today. This means that approximately 95% of people living with sickle cell disease are within 200 miles or less of a bluebird QTC.

Tom: We continue to be focused on access for Medicaid patients in 2024, and discussions are ongoing with more than 15, Medicaid agencies, representing 80% of individuals with sickle cell disease in the U S.

We are also actively engaged with CMI on its cell and gene therapy access demonstration that is slated to begin in 2025, which could serve as the bandwidth extender for states, who do not have the ability to implement outcomes based agreements on their own.

Tom: Moving to our <unk> network one of the most significant advantages of our commercial head start has been our ability to build our synergistic UTC network. We now have 62 activated centers the largest network of qualified treatment centers for hemoglobin <unk> 49 of which are already ready to receive referrals for <unk>.

Tom: Jenny it today.

Tom: This means that approximately 95% of people living with sickle cell disease or within 200 miles or less of a bluebird Q Tc, we anticipate additional <unk> expansion across our portfolio in 2024.

Thomas J. Klima: We anticipate additional QTC expansion across our portfolio in 2024. Additionally, we have recently signed agreements with QTCs and geographies with important proximity to sickle cell patients, where we meet patients where they are in Georgia, across Florida, and throughout the New York metropolitan area. Additionally, five centers have also been activated to administer Sky Sona for patients with CALD.

Tom: We also recently signed agreements with <unk> in geographies with important proximity to sickle cell patients, where we're meeting patients where they are in Georgia across Florida and throughout the New York Metropolitan area.

Tom: Additionally, five centers have also been activated to administer sky zone for patients patients with <unk>.

Thomas J. Klima: We were able to quickly quickly activate our Lifgenia QTC due to both the learned experience of setting up these centers for Zenteglo and the strong relationships we have built with these centers throughout 2023. From onboarding through infusion, our QTCs are comfortable with our process and have grown to expect the transparency and the partnership that Bluebird Bluebird brings to the table. To recap, Zintegro and SkySona launches continue to progress as planned, and we anticipate strong linear growth from Zintegro in 2024.

Tom: We were we were able to quickly activate our <unk> due to both blurred experience of setting up these centers for <unk> and the strong relationships. We have built with these centers throughout 2023.

Tom: Onboarding through infusion RQ Tcs are comfortable with our process and have grown to expect the transparency and the partnership that Bluebird Bluebird brings to the table.

Tom: To recap <unk> launches continue to progress as planned and we anticipate strong linear growth from <unk> in 2024, we've made incredible early progress in our lip Jennie O launch building at our validated commercial platform.

Christopher Krawtschuk: We've made incredible early progress in our Lufgenia launch, building on our validated commercial platform. We are seeing clear demand from patients and physicians. Payers are recognizing the value of Lyfgenia and providing access, and our QTC network is fully ready to help patients start their journey with curative therapy. Now, I'd like to turn the call over to Chris.

Tom: We're seeing clear demand from patients and physicians payers are recognizing the value of Virginia, and providing access and our <unk> network is fully ready to help patients start their journey with the curative therapy.

Tom: And now I'd like to turn the call over to Chris.

Christopher Krawtschuk: Thanks, and good morning, everyone. Before discussing the details of the restatement and the filing extension we announced this morning, I want to highlight the financial results we reported in our press release. In the fourth quarter, we reported $7.8 million in total revenue, primarily driven by product revenue from Zenteglo and SkyZone.

Chris Koch: Thanks, Tom and good morning, everyone.

Before discussing the details of the restatements and the filing extension, we announced this morning I want to highlight the financial results, we reported in our press release.

Chris Koch: In the fourth quarter, we reported $7 8 million in total revenue, primarily driven from product revenue from <unk> and Skype Soma.

Christopher Krawtschuk: As a reminder, we recognize revenue upon infusion of the drug product; additional drug product for several patients was delivered at the end of December and infused in January. So this revenue was recognized in the first quarter of 2024. For the full year 2023, we reported $29.5 million in net revenue, with $16.7 million of revenue attributable to Zinteglo and $12.4 million of revenue attributable to SkySona, with cumulative gross net discounts across the portfolio of two products of approximately 19 percent.

Chris Koch: As a reminder, we recognize revenue upon infusion of the drug product.

Chris Koch: <unk> drug product for several patients were delivered at the end of December and infused in January. So this revenue we recognized in the first quarter of 2024.

Chris Koch: For the full year 2023, we reported $29 5 million in net revenue.

Chris Koch: With $16 $7 million of revenue attributable to as integral and $12 $4 million of revenue attributable to sky sonar with cumulative gross to net discounts across the portfolio of <unk> products of approximately 19%.

Christopher Krawtschuk: In 2024, we anticipate gross net discounts in the range of 20% to 25%, with fluctuations based on product and payer mix, as well as utilization of our outcomes-based agreements. Going forward, Bluebird plans to provide revenue by product on a quarterly basis, and as Tom shared earlier, we expect the first Lifgenia patient infusion and revenue recognition in the third quarter of 2024. We ended the year with cash and cash equivalents, marketable securities, and restricted cash of approximately $275 million, which included $53 million of restricted cash.

Chris Koch: In 2024, we anticipate gross to net discounts in the range of 20% to 25%.

Chris Koch: With fluctuations based on product and payer mix as well as utilization of our outcomes based agreements.

Chris Koch: Going forward Bluebird plans to provide revenue by product on a quarterly basis and as Tom shared earlier, we expect the first lift ginnie outpatient infusion and revenue recognition in the third quarter of 2024.

Chris Koch: We ended the year with cash and cash equivalents marketable securities and restricted cash of approximately $275 million, which includes $53 million of restricted cash.

Christopher Krawtschuk: We're very pleased to announce that we entered into a five-year term loan with Hercules Capital for $175 million. This financing provides an infusion of non-diluted capital for bluebird, helping fuel the launch of Lifgenia and deliver on our mission as a company. The loan provides for up to $175 million in the aggregate, and it's available in four tranches. The first tranche, and the amount of $75 million, was drawn on closing.

Chris Koch: We're very pleased to announce that we entered into the five year term loan with Hercules capital for $175 million.

Chris Koch: This financing provides an infusion of non dilutive capital for Bluebird, helping fuel the launch of lift Kenya and deliver on our mission as a company.

Chris Koch: The loan provides for up to $175 million in the aggregate and it's available in four tranches.

Chris Koch: The first tranche in the amount of $75 million was drawn at closing.

Christopher Krawtschuk: We may draw additional two tranches over the next 18 months in aggregate of an amount up to $50 million, and this is subject to the achievement of commercial milestones tied to Lufgenia patient starts and gross profit. A fourth tranche of up to $50 million may be available at the sole discretion of her.

Chris Koch: They draw additional two tranches over the next 18 months in aggregate.

Chris Koch: Of an amount up to $50 million and this is subject to the achievement of commercial milestones tied to look journey of patient starts and gross profit.

Chris Koch: The fourth tranche of up to $50 million may be available at the sole discretion of Hercules.

Christopher Krawtschuk: Importantly, and to reiterate Andrew's comments, based on our launch estimates and our current business plans, and assuming the first three launches are executed, the transaction is expected to extend our cash runway beyond the next 24 months and puts us in a durable capital position as we approach profitability. Lastly, this morning we announced we will receive financial information for the full year of 2022 and for the first three quarters of both 2022 and 2023. The restatement relates to the application of our accounting policies for contracts with our contract manufacturing organizations and suppliers, which did not consistently combine lease and non-lease components, and was discovered by our internal finance team during the preparation of our annual financial statement. For 2022, we estimate an understatement of lease assets and lease liabilities of approximately 100 to $200 million for the full year, as well as an estimated understatement of lease assets and liabilities of approximately $30 million to $125 million for the first three quarters of 2022 and 2023. While we're still working through the exact details, the lease will be reclassified as finance leases as a result, and we anticipate an increase in non-cash interest expense on our P&L.

Chris Koch: Importantly, and to reiterate Andrew's comments based on our launch estimates in our current business plans and assuming the first three launches or executed the transaction is expected to extend our cash runway runway beyond the next 24 months and puts us in a durable capital position as we approach profitability.

Speaker Change: Lastly, this morning, we announced we received financial information for the full year of 2022.

Speaker Change: And for the first three quarters of both 2022 and 2023.

Speaker Change: The restatement relates to the application of our accounting policies for contracts with our contract manufacturing organizations and suppliers.

Speaker Change: Which did not consistently combined lease and non lease components and was discovered by our internal finance team during the preparation of our annual financial statements.

For 2022, we estimate the understatement of lease assets and lease liabilities of approximately $100 million to $200 million for the full year.

Speaker Change: As well as an estimated understatement of lease assets and liabilities of approximately $30 million to $125 million for the first three quarters of 2022 and 2023.

Speaker Change: While we are still working through the exact details the lease will be reclassified as finance leases as a result, and we anticipate the increase of noncash interest expense on our P&L.

Christopher Krawtschuk: The restatement is not expected to have any impact on our cash position or revenue. In consideration of the time it will take to complete the restatement, we have filed for an extension of our 10-K, and we anticipate that our 2023 10-K, inclusive of the restated periods, will be filed on April 16th. And with that, I will turn it back over to Andrew. Thank you, Chris.

Speaker Change: The restatement is an unexpected to have any impact on our cash position or revenue.

In consideration of the time, we will take to complete the restatement. We have filed for an extension of our 10-K and we anticipate that our $2023 10-K inclusive of the restated periods will be filed April 16th.

Speaker Change: And with that let me turn it back over to Andrew.

Andrew: Thank you Chris.

Andrew Obenshain: And to summarize, Bluebird is deploying a validated commercial gene therapy strategy with three FDA-approved therapies taking flight in 2024 and delivering on our promise to patients and their families. We expect 2024 to be a transformative year for our company, and we look forward to providing more updates in the upcoming quarters as our commercial launch of Let's Genium progresses. And with that, I'd like to open it up for questions. Operator.

Andrew: And to summarize Bloomberg is deploying a validated commercial gene therapy strategy with three FDA approved therapy is taken late in 2024 and delivering on our promise to patients and their families. We expect 2024 to be a transformative year for our company and we look forward to providing more updates the upcoming quarters as our commercial launch of <unk>.

Andrew: Ghanian progresses.

Speaker Change: And with that I'd like to open it up for questions. Operator. Thank you as a reminder to ask a question you will need to press star one on your telephone.

Operator: Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. To withdraw your question, please press star one one again.

Speaker Change: Your question. Please press Star one again, please wait for your name to be announced we ask that you. Please limit your questions to one and one follow up until all have had a chance to ask a question. Please standby, while we compile the Q&A roster one moment for your first question. Please.

Jason Gerberry: Please wait for your name to be announced. We ask that you please limit your questions to one and one follow-up until all have had a chance to ask a question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Jason Gerberry with Bank of America. Your line is now open.

Speaker Change: Our first question will come from the line of Jason <unk> with Bank of America. Your line is now open.

Thomas J. Klima: Hey guys, thanks for taking my question. I was wondering, maybe if you could just speak to, in the fourth quarter, the quarterly step down in revenue and what you're seeing there, to what extent that maybe speaks to sort of the conversion dynamics of these starts to an actual revenue recognition event. And then, can you comment at all, just as a follow-up, just directionally, on the flow of new starts, first half versus second half, and your outlook for the full year? Thanks. Yeah, good morning, Jason.

Jason: Hey, guys. Thanks for taking my question.

Jason: I was wondering maybe if you can just speak to in the fourth quarter.

Jason: Quarterly step down in revenue and what Youre seeing there.

Jason: To what extent that maybe speaks to sort of the conversion dynamics of any starts two to an actual revenue recognition events and then.

Jason: Can you comment at all just as a follow up.

Jason: Directionally the flow of new starts first half versus second half and your outlook for the full year.

Thomas J. Klima: Thanks for the question. So I'm actually Tom, just talking a little bit about the patient dynamics and how they're coming in and the flow, both for the fourth quarter with Zynteglo and then for the first and second half this year with Lepgenia. Yeah, good morning, Jason.

Speaker Change: Yes, good morning, Jason Thanks for the question, so Im actually as Tom just talk a little bit about the patient dynamics and how they're coming in and the flow both for the fourth quarter was <unk> and then for the first and the second half of this year with Virginia go ahead, Tom Yes. Good morning, Jason. Thanks for the question. So we saw.

Thomas J. Klima: Thanks for the question. So we saw, you know, strong demand and building demand over the course of the year last year for both Zynteglo and Sky Soda. And then, as we expected, we started six patients for Sky Soda.

Strong demand in building demand over the course of the year last year for both for <unk> and then as we expected we started six patients for sky soda with integrity, we actually collected a number of patients at the end of the year.

Thomas J. Klima: With Zynteglo, we actually collected a number of patients at the end of the year that elected to be treated after the start of the new year. So, although collections were on track in Q4, many of those patients went on to be infused in Q1. So that was the reason you saw a little bit of a dip in Q4.

Tom: That elected to be treated after that started the new year. So although the collections were on track in Q4. Many of those patients went on to be infused in Q1. So.

Tom: So that was the reason you saw a little bit of a dip in Q4, but we remain very positive on patient demand for <unk>. We also are seeing just very strong demand for us for <unk>, we expect a linear build over the course of this year with the vast majority of the journey starts happening in the second half of the year.

Thomas J. Klima: But we remain very positive on patient demand for Zynteglo. We also are seeing very strong demand for Lepgenia. We expect a linear build over the course of this year with the vast majority of Lepgenia starts happening in the second half of the year.

Thomas J. Klima: And Jason, just to reiterate what we said earlier, too, we had some drug products that were delivered to the QTCs in Q4, but they were not actually infused, and those infusions will happen in Q1 and be recognized there. And I would also say that, quarter to date, we've had our best, strongest quarter to date on starts.

Tom: And Jason just to reiterate what we said earlier too we had some drug products that were delivered to the <unk> in Q4, but actually where not to use those adhesions will happen.

Tom: In Q1, it would be recognized there and I would also say that.

Tom: Quarter to date, where we've had our best strongest quarter to date on starts Idaho.

Danielle Breaux: Thanks. Thank you. One moment for our next question. Our next question comes from the line of Danielle Breaux with Raymond James. Your line is now open. Hi guys, good morning.

Jason: Got it thanks.

Speaker Change: Thank you one moment for our next question.

Our next question comes from the line of Danielle Brill with Raymond James Your line is now open.

Thomas J. Klima: Thanks so much for the question. I guess as a follow-up to Jason's, Do you still expect Lipgenia to make up over 50% of the total volume this year? And then, I know you said that the first patient start is imminent, but I believe in the past you communicated that multiple patients would start in one queue. Just curious what's getting to getting those patients started. Thank you. Ask Tom to answer that question, Tom.

Danielle Brill: Hey, guys. Good morning. Thanks, so much for the question I guess as a follow up to Jason's.

Danielle Brill: Do you feel like with Jenny I can make up over 50% of the total volume this year and then.

I know you said that the first patient sorry is eminent but I believe in the past and communicated that multiple patients would start in one queue just curious what's gating.

Danielle Brill: Getting those patients started thank you.

Danielle Brill: Okay.

Thomas J. Klima: Yeah, so again, we're excited about the momentum and the demand we're seeing with Lipgenia. We do expect, you know, roughly half or more of the volume to come from Lipgenia. Obviously, it's a much larger patient population, and we should see a lot of the starts starting to pick up in the second half of the year as we build momentum. We did say that we would have a patient start in Q1. We believe that we'll have our first patient started very soon, imminently. We've seen, again, very strong demand, and what we've seen so far is a number of patients who have enrolled in the process and who are going through the process of getting ready for treatment across a number of different QTCs. And keep in mind that if you look at, just refer you to the package insert for Lipgenia, it takes about two months on average for patients to be medically ready, as they have to wash out their hydroxyurea or disease-modifying therapies that they might have been on for at least two months.

Danielle Brill: As Tom to answer that Tom Yes. So again, we're excited about the momentum and the demand we're seeing with tenure.

Tom: We do expect.

Tom: Roughly half or more of the volume to come from Virginia, Obviously, it's a much larger patient population and we should see a lot of the starts starting to pick up in the second half of the year as we build momentum.

Tom: We did say that we would have a patient started in Q1, we believe that we'll have our first patients started very soon imminently, we have seen again very strong demand and what we've seen so far as a number of patients who have enrolled in the process and who are going through the process of getting ready for treatment across a number of different Q Tcs.

Tom: And keep in mind that if you look at just refer you to the package insert for La <unk>. It takes about two months on average for patients to be medically ready as they have to wash out there.

Tom: <unk> urea or disease modifying therapies that they might be on for at least two months. They have to also go through two rounds of transfusions. One month. Each so just takes patients a little longer to get ready for therapy.

Jack Kilgannon Allen: They also have to go through two rounds of transfusions, one month each, so it just takes patients a little longer to get ready for therapy, private. Thank you. One moment for our next question. Our next question comes from the line of Jack Allen with Baird. Your line is now open.

Speaker Change: Got it thanks, so much.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from the line of Jack Allen with Baird. Your line is now open.

Andrew Obenshain: Hey, thanks for the question. I wanted to ask about your manufacturing capacity and how you think about, you know, the essential influx of patients and the quarters and the sensitive second half as well. Can you provide some color as it relates to what capacity you have and how you could meet demand as it comes in in different kinds of waves as we think about the second half being really the build here as it relates to training? And so, good morning, Jack.

Jack Kilgannon Allen: Great. Thanks for taking the question.

Jack Kilgannon Allen: I wanted to ask about your manufacturing capacity and how you think about it.

Jack Kilgannon Allen: Central embarks on patients in the quarters in the.

Jack Kilgannon Allen: The second half as well.

Jack Kilgannon Allen: Can you just provide some color as it relates to what capacity you have an opportune meet demand as it comes in in different kind of ways. We think about the second half being really the.

Jack Kilgannon Allen: But build here.

Andrew Obenshain: I'll take that one. So the first thing to understand is that the supply chain for Zantegra or SkySona is one supply chain, and there's a supply chain for Lepidogena, so the two don't impede upon each other. And the way we've designed it, and obviously, we've designed our capacity for Lipsgenia to be larger than our capacity for Syntagma and Skysona in anticipation of a larger demand there. And on both sides, both with Vector and with the drug product, we do anticipate that we have the volume or the capacity to meet the initial launch expectations. And what we also have in place is plans to expand that capacity as we see demand coming in. So we do anticipate that we do have capacity for this year and the launch phase of it all. Got it, thanks.

<unk>.

So.

Speaker Change: Good morning, Jack I'll take that one so the.

Speaker Change: First of all I think important to understand is that the supply chains for his integrity Sky zone as one supply chain and there is a tight supply chain people agenda. So that you don't impede upon each other and the way we've designed and obviously that we've designed our capacity for <unk> to be larger than our capacity for some tech one sky. So in anticipation of a larger demand there.

Speaker Change: And we do on both sides, both the sector and with drug product, we do anticipate that we have.

Speaker Change: The volume or the capacity to meet the initial launch.

Speaker Change: Expectations are and what we also have in place is plans to expand that capacity SBC demand coming in.

Speaker Change: So we do anticipate that we do have capacity for it for this year in the launch phase of all of our products.

Huidong Wang: Thank you. One moment for our next question, please. Our next question comes from the line of Jenna Wang with Barclays. Your line is now open.

Got it thanks.

Speaker Change: Thank you one moment for our next question. Please.

Our next question comes from the line of Gena Wang.

Huidong Wang: <unk> with Barclays. Your line is now open.

Thomas J. Klima: Thank you for taking my questions. I wanted to know that now you have a little bit of early real world experience. What is your expected time from start to finish for left genus? Morning, Tina. Tom, go ahead.

Huidong Wang: Thank you for taking my questions I wanted to know that now you have a little bit early.

Huidong Wang: Our real world experience of what is your expected from start to finish for Lyft gene.

Thomas J. Klima: Yeah, good morning, Tina. So what we're saying is that, obviously, from cell collection to infusion is one to two quarters. And the biggest part of that time is just the manufacturing time, and the range in the package insert is between 70 and 105 days plus two weeks. So that's the vast majority of the time.

Huidong Wang: Hey, Good morning, Gina Tom go ahead, yes, good morning, Gina So we what we're saying is that obvious.

Tom: From cell collection to infusion is a one to two quarters.

Tom: And the biggest part of that time is just the manufacturing time and range in the package insert is between 70 and 105 days plus two weeks.

Thomas J. Klima: And then we obviously ship it back to QTC, and then it's up to QTC when they infuse it. So we're saying, for modeling purposes, one to two quarters. Thank you. One moment for our next question, which comes from the line of Eric Joseph with J.P. Morgan. Your line is now open. Hi, good morning.

Tom: So that's the vast majority of the time and then we obviously shipped back to <unk> and then it's up to the <unk> when they use it so we're saying for modeling purposes.

Tom: One to two quarters.

Speaker Change: Thank you.

Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Eric Joseph with Jpmorgan. Your line is now open.

Eric William Joseph: Thanks for taking the question. I guess just if we're looking back at 2023, can you just provide a little more color on how many of the 24, I think, total cell collections contributed to revenue generation and whether there were any Yeah, explicitly how many patients actually contributed to revenue recognition, and then you know how the Average time to treatment between collection and treatment has trended. What avenues do you anticipate there being to sort of improve conversion rates going forward? Thanks. So Eric, good morning.

Hi, good morning, Thanks for taking the question I guess, just if we're looking back at 2023 can you just.

Eric William Joseph: Provide a little more color on how many of the 24 I think total cell collections contributed to revenue share.

Eric William Joseph: Generation and.

Eric William Joseph: Whether there.

Eric William Joseph: Yes explicitly how many patients actually contributing to revenue recognition and then how.

Eric William Joseph: Average time to treatment between collection and treatment.

Eric William Joseph: Has trended.

Eric William Joseph: Avenues do you anticipate there being to sort of improve conversion rates going forward. Thanks.

Andrew Obenshain: So 26 collections in 2023. Every single patient that has gone through the process is still in the process; they've either been infused, or had the drug product delivered, or the product is in process. So they're all still in the process. And we haven't actually given numbers of infusions. So I'm not going to say that directly.

Eric William Joseph: So Eric good morning, So 26 functions.

Eric William Joseph: In 2023 every single patient that has gone through the process is still in the process of either been infused or had the drug product delivered or the product.

Eric William Joseph: And processes are all still in the process.

Speaker Change: And we aren't we.

Eric William Joseph: Haven't actually given the numbers of confusions, so innocent directly but we have said we have infused a number in 2023, we have some products that were delivered in Q4, but not refuse and you will see that revenue in Q1, we have some of those patients will be introduced early this year in general you're going to see that the time from collection to infer.

Andrew Obenshain: But we said we would have infused a number in 2023. We have some products that were delivered in Q4, but not infused; you'll see that revenue in Q1, and most patients will be infused early this year. In general, you're going to see that the time from collection to infusion is one to two quarters. There will be some outliers there, just as the hospital chooses to infuse late or something else happens. But, in general, it's one to two quarters.

Eric William Joseph: Fusion is one to two quarters.

Eric William Joseph: There will be some outliers there just as the hospitals uses which is late or something else happens, but in general as one to two quarters as we get more collections and as we get more data on and be able to narrow that number down for you and give you a kind of a more precise number but still we're still dealing with relatively small numbers.

Andrew Obenshain: As we get more collections and as we get more data, we'll be able to narrow that number down for you and give you a kind of more precise number. But still, we're still dealing with relatively small, Okay, and to remain in the process, I guess, is there a certain time frame. I guess how long can a patient kind of be in the process? Is it, you know, ultimately a nine, 12 month window? So there's really no end date for them being in the process, except for the expiration of the drug product is just about a year, right? Once you've manufactured it, the drug product will expire after a year or a little bit longer. So that would be the end process. We don't anticipate anyone going that far.

Eric William Joseph: Okay.

Eric William Joseph: Okay.

Eric William Joseph: Okay.

Eric William Joseph: Remain in process I guess is there.

Speaker Change: I guess, a bracket timeframe I guess, how long can a patient kind of be in process as it is there ultimately.

Speaker Change: One 912 month window.

Speaker Change: So there's really no end date for them being in the process, except to the exploration of the drug product is just about a year right. Once you've manufactured at that the drug product might expire after a year a little bit longer so that would be an process. We are not anticipating we're going that far but again remember this is an election that the patient mix to get treated.

Andrew Obenshain: But again, remember, this is an election that the patient makes to get treated. So very often, it'll be scheduled in around life events, etc. That's why it's somewhat unpredictable once we deliver the product back to the hospital about when they will. Thanks for taking the question. Thank you. One moment for our next question, please. Our next question comes from the line of Mani Foroohar with Liring Partners. Your line is now open. Hey, thanks, guys. I want to pivot a little bit to think about broader market dynamics.

Very often they will schedule that around life events et cetera, that's why it's somewhat unpredictable once we deliver the product back to the hospital when they will get approved.

Speaker Change: Okay.

Speaker Change: Thanks for taking the question.

Speaker Change: Thank you one moment our next question please.

Speaker Change: Our next question comes from the line of Manny <unk> with Leerink Partners. Your line is now open.

Manny: Hey, Thanks, guys.

Manny: On a pivot a little bit to thinking about broader market dynamics, you've obviously talked about.

Mani Foroohar: You've obviously talked about finding patient demand, volume demand out there for leukemia, said that that's going to be perhaps half or more of the 8,505 patients. Can you give us a little bit of a sense of how deep that backlog is? How much clarity you have into it.

Manny: Finding patient demand volume demand out there from Virginia.

Manny: <unk> said that thats going to be perhaps half or more of the $85. Five patients can you give us a little bit of a sense of how deep that backlog is how much clarity do you have into it I know you can't give us a numerical guidance number of number of patients.

Andrew Obenshain: I know you can't give us a numerical guidance number of patients currently, but can you give us some, can you put some color around exactly what that backlog of identified potential leukemia patients looks like? And, I guess the separate follow-up question, can you give us a sense of exactly what demand metrics and other data was available to Hercules as part of your engagement with them prior to their transaction with them? Just trying to understand their due diligence process as well. Yeah, so I'm going to pass this on to Thomas to talk about the backlog or the interest in Lufgenia, and Chris, I'll talk about just what we're providing to Hercules. Go ahead, Tom.

Manny: Currently but can you give us some can you put some color around exactly what that backlog of identified.

Potential a journey of patients looks like.

Manny: And I guess as a separate follow up can you give us a sense of exactly what demand metrics and other data was available to Hercules as part of your engagement with them prior to their transaction with them just trying to understand their due diligence process as well.

Speaker Change: Yeah, So obviously I pass it to <unk>.

Tom is to talk about the backlog or that the interest in La Virginia, It's Chris I'll talk about just what we're providing.

Thomas J. Klima: Yeah, good morning, Mani. You know, keep in mind that if you look back a year ago, people were asking questions around whether we could get to our goal of 40 to 50 QTCs, which was a factor in making sure that patients had access to therapy. People were also asking questions around reimbursement. And then lastly, people were asking about patient demand. Now we have 62 qualified treatment centers up and running.

Speaker Change: Please go ahead, yes.

Speaker Change: Good morning money.

Speaker Change: Keep in mind that if you look back a year people were asking questions around can we get to our goal of 40% to 50, <unk>, which was a.

Chris Koch: Factor in making sure that patients had access to therapy people were also asking questions around reimbursement and then lastly people were asking about patient demand that we have 62 qualified treatment centers up and running.

Thomas J. Klima: We've seen reimbursement happen. We have positive coverage policies so far with Lufgenia, so that box is being checked. And now you're looking at patient demand. And we've seen historically in market research that over 70% of patients who have more severe sickle cell disease have said they would seek a gene therapy if recommended by their physicians. And now we're seeing that play out in real life.

Chris Koch: We've seen reimbursement to happen we have positive coverage policies. So far with journey is to that box is being checked and now youre looking at patient demand and we've seen historically in market research that over 70% of patients who have.

Chris Koch: More severe sickle cell disease have said they would seek a gene therapy, if recommended by their physician and now we're seeing that play out in real life that we have multiple enrollments already.

Thomas J. Klima: We have multiple enrollments already just a few months after approval across multiple QTCs. We wouldn't expect a huge bolus because patients, as Andrew mentioned, can get treated on their schedules. And also, I think QTCs are going to want to treat a handful of patients first before they go through their list of patients. But anecdotally, we've heard of long wait lists at QTCs for patients who have sickle cell disease that are looking to be treated.

Chris Koch: In a few months after approval across multiple Q Tcs.

Chris Koch: We wouldn't expect a huge bolus because patients as Andrew mentioned can treat get treated.

Chris Koch: Their schedules that also I think Q tcs are going to want to treat a handful of patients first before they go through their list of patients, but anecdotally we've heard of long weightless at <unk> of patients who have sickle cell disease that are.

Thomas J. Klima: Again, I can't overemphasize how excited we are about the early demand that we're seeing. Perfect. Chris, do you want to comment on what was provided at Hercules?

Looking to be treated so we're again I can't overemphasize, how excited we are about the early demand that we're seeing.

Chris Koch: Perfect.

Chris Koch: Spent on what.

Christopher Krawtschuk: Thanks for the question. With respect to what Hercules received, so Hercules received customary information as it relates to projections, not just 2024, but beyond that, and the confidence that having a third party come in and scrutinize our projections should provide confidence to the marketplace on the achievability of those considering they entered into the arrangement for the $175 million. What I would say, though, is that the patient start guidance that you saw there for leuk Right? That's viewed as progress.

Speaker Change: <unk> provided Hercules thanks for the question.

Speaker Change: With respect to what Hercules receive so Hercules received customary information as it relates to projections, not just 2024, but beyond that and the confidence that having a third party come in and scrutinize, our projections should provide confidence to the marketplace on the achieve ability of those considering they entered into the arrangement for the 175 million.

Speaker Change: Finance.

Speaker Change: What I would say, though is that the patient start guidance that you saw there Phillip Jenny I should not be viewed as consensus alright, that's viewed as progress so that milestone associated with that is not consensus.

Christopher Krawtschuk: So that milestone associated with that is not in consensus. We provided our guidance, which is the 85 to 105 start. Okay, that's helpful. Thanks guys.

We provided our guidance, which is the 85 to 105 starts.

Speaker Change: Okay. That's helpful.

Speaker Change: Thanks, guys.

Jeff Hung: Thank you. One moment for our next question, please. Our next question comes from the line of Jeff Hung with Morgan Stanley. Your line is now open.

Speaker Change: Thank you.

Speaker Change: One moment for our next question please.

Speaker Change: Our next question comes from the line of Jeff Hung with Morgan Stanley. Your line is now open. Thanks.

Thomas J. Klima: Thanks for taking my questions. For Lipgenia, with 49 QTCs already receiving referrals, what proportion of these sites might have their first patient cell collections in the first half of the year? And what are the gating factors that might result in different timelines, particularly for the 35 sites that were online at the beginning of the year?

Jeff Hung: Thanks for taking my questions for <unk> with 40, <unk> already receiving referrals, but what proportion of these sites might have their first patient cell collections in the first half of the year. What are the gating factors that might result in different timelines, particularly for the 35 sites that were online at the beginning of the year and then I have a follow up.

Thomas J. Klima: And then I have a follow-up. Go ahead, Tom. Yeah, sure. Yeah, we haven't really given specific guidance per QTC, but needless to say, a lot of QTCs were coming on board late last year in anticipation of the Lipgenia launch and approval. So we would expect, you know, most of our QTCs to be pretty excited about getting patients started on Lipgenia. In most cases, they are waiting for patients to come in for their regular appointments.

Speaker Change: Go ahead, yes, sure, yes, we haven't really given specific guidance for Q T C, but needless to say a lot of <unk> were coming on board late last year in anticipation for lip Jennie O launch and approval. So we would expect most of our <unk> to be pretty excited about getting patients started on with journey yet.

Speaker Change: In most cases, they are waiting for patients to come in for their regular appointments and in some cases.

Speaker Change: Have a waiting list save for a patient to wanted to dry a gene therapy through a clinical trial than those patients might go faster. So it really the dynamic will play out but we're excited about the early enrollments that we've seen in across multiple QTS is not just one or two <unk>.

Thomas J. Klima: And in some cases, they you know, if they have a waiting list, say, for a patient that wants to try a gene therapy through a clinical trial, then those patients might go faster. So really, the dynamic will play out. But we're excited about the early enrollments that we've seen across multiple QTCs, not just one or two QTCs. And we're excited about the excitement for gene therapy.

Speaker Change: And we're excited about the excitement for gene therapy.

Okay. Thanks, and then for the third tranche of the term loan facility, but what would you need to see in patient starts by the end of the year to be on track to reach the 30 million gross profit Marston by the end of the first half of 'twenty five.

Christopher Krawtschuk: Okay, thanks. And then for the third tranche of the term loan facility, what would you need to see in patient starts by the end of the year to be on track to reach the $30 million gross profit milestone by the end of the first half of 25? Thanks. Go ahead, Chris.

Speaker Change: Okay go ahead, Chris So we're not going to we haven't commented on that.

Chris Koch: Commented on was the exact metric associated with that.

Chris Koch: But we're not going to comment on the patient start number remember our patients start guidance that we provided in the second tranche was the 35% by.

Chris Koch: By September the 55 by the end of the year for lip Kenya.

Christopher Krawtschuk: So we're not going to, and we haven't commented on that. What we commented on was the exact metric associated with that. But we're not going to comment on the patient start number. Remember, our patient start guidance that we provided in the second tranche was the thirty-five by September, the fifty-five by the end of the year for Levchenia. And then there's a gross profit metric also.

Chris Koch: And then there's a gross profit metric also.

Chris Koch: And then for the third tranche, but we're not going to provide that level of detail associated with the number of equivalent patient starts to get to the gross sorry.

Speaker Change: Alright, Yes, you were asking about the first thing.

Speaker Change: You said the third quarter I think you meant the second yes.

Speaker Change: Yes, I was talking about the third tranche, yes.

Sorry.

Christopher Krawtschuk: And then for the third tranche. But we're not going to provide that level of detail associated with the number of equivalent patient starts to get to the gross profit. Sorry, Jeff, you were asking about the first trunch. You said the third trunch, but I think you meant the second trunch. Yeah, I was talking about the third tranche, yeah.

Speaker Change: The first tranche of 52nd tranche of 25, which is that its keyed off of either the.

Speaker Change: 35 of the 55 stars.

Speaker Change: Starts by the end by the end of the year and then Theres a theres a third times 25 that is that is keyed off of different retro.

Christopher Krawtschuk: So there's this first tranche of 50, second tranche of 25, which is that it's keyed off of either the 35 or the 55 starts by the end of the year. And then there's a third tranche of 25 that is keyed off of a different metric, which is gross profit. Just to be clear, the first tranche was the 75. The second tranche is the 25.

Speaker Change: Yes, just to be clear the first tranche was the 75%. The second tranche is the 25 and 25% is attributable to the Lyft journey of patient starts as I said 35 by September 55 by December 31, and then the third tranche is associated with gross profit.

Speaker Change: Alright, and then of course as I said.

Christopher Krawtschuk: The 25 is attributable to the left genia patient starts, as I said, 35 by September 55 by December 31st. And then, as I said, the third tranche is associated with gross profit, right? And then, of course, as I said, the fourth tranche is the 50 that sets the discretion of her. Yeah, you answered it.

Speaker Change: The fourth tranches, but 50, that's at the discretion of Hercules.

Speaker Change: Yes. Thank you you guys sort of you said that you wouldn't comment on the number of patient starts for the $30 million gross product yes. Okay. Thank you that's correct that's correct.

Q.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Sylvan Richter with Goldman Sachs. Your line is now open.

Jeff Hung: Yeah, you said that you wouldn't comment on the number of patient starts for the 30 million gross profit. Yeah. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.

Sylvan Richter: Good morning, Thanks for taking my question.

Sylvan Richter: From the line of Pittsburgh Directory that Youre seeing right now in the understanding.

Sylvan Richter: The various on boarding dynamics reimbursement dynamics.

Salveen Jaswal Richter: Good morning, thanks for taking my question. Just in line with the trajectory that you're seeing right now and your understanding of, you know, the various onboarding dynamics, reimbursement dynamics, how are you thinking about the peak opportunity here for the drug and, maybe, an update on XUS commercialization. Thank you. Yeah, so Salveen, I was a little hard to hear, but I think you asked what the peak opportunity for the drug is. Yes, and the Ex-US Commercialization Outlook. Oh, actually, actually, okay, got it.

Sylvan Richter: About the peak opportunity here for the Dragon.

Sylvan Richter: Maybe an update on <unk>.

Sylvan Richter: For ex U S commercialization. Thank you.

Speaker Change: Yes, so sorry, I was a little hard to hear I think you asked what the peak opportunity is for for the drug.

Speaker Change: Yes, and ex U S commercialization outlook.

Speaker Change: Okay got it so let me take that so we do see this as a multibillion dollar opportunity.

Speaker Change: At peak in the U S alone.

Speaker Change: Ex U S. We do think there is a very attractive opportunity there as well.

Speaker Change: Right now we as a company our focus exclusively on the U S. <unk> ex U S. We must certainly do that with a partner we are watching very closely the reimbursement dynamics of gene therapy in Europe as well.

Andrew Obenshain: So let me take that. So if we do see this as a multi billion dollar opportunity at peak in the US alone, x us, we do think there's a very attractive opportunity there as well. Right now, we as a company are focused exclusively on the US, we go x us, we most certainly do that with a partner, and we are watching very closely the reimbursement dynamics of gene therapy in Europe, as well.

Speaker Change: That's kind of a key dynamic that will determine the opportunity there.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Sami Corwin with William Blair. Your line is now open.

Andrew Obenshain: That's that that's kind of a key dynamic; they'll determine the opportunity there. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Sammy Corwin with William Blair. Your line is now open. Hi there.

Samantha Danielle Corwin: Hi, there thanks for taking my question.

Samantha Danielle Corwin: I was curious if you could speak a little more as to the cost of goods and your gross margins and how you expect that to change as our launches across the portfolio continue and then can you provide any granularity in terms of your assumptions for.

Samantha Danielle Corwin: Thanks for taking my question. I was curious if you could speak a little more as to the cost of good near gross margins and how you expect them to change as your launches across the portfolio continue. And then can you provide any granularity in terms of your assumptions for the LiveGenia launch this year and the percentage of patients you expect to be covered by Medicaid versus private insurers? Yeah, sure. This morning,

Jennie O launch this year and the percentage of patients you expect to be covered for covered by Medicaid versus private insurers.

Speaker Change: Yes sure.

Speaker Change: Good morning, So let me have Thomas he is in the second part first and then I'll go to crest that percentage on the journey on Medicaid.

Thomas: Just to give you the stats again about 50% of patients there are people living with sickle cell disease are covered by Medicaid.

Thomas J. Klima: So let me have Thomas answer the second part first, and then I'll go to Chris on the percentage of longevity on Medicaid. Yeah, just to give you the stats again, about 50% of patients or people living with sickle cell disease are covered by Medicaid. About 45% are covered by commercial insurance and then a small portion of Medicare.

Thomas: About 45% are covered by commercial insurance and then a small portion of Medicare.

Thomas: Hard to predict the early patients will be but we would expect we would expect over time that the payer mix will play out like we've seen historically.

Chris just covering on the cost of sales and maybe I'll answer that a slightly different way, which I think is what youre intending as gross margin. So the gross margin for the company will improve as we scale and we've said that we would get to a 70% gross margin and as we scale the company not only with filling the capacity with.

Thomas J. Klima: It's hard to predict who the early patients will be, but we would expect over time that the payer mix would play out like we've seen in the historic past. I'm just covering on the cost of sales. And maybe I'll answer it a slightly different way, which I think is what you're intending to say is gross margin. So the gross margin for the company will improve as we scale. And we've said that we would get to a 70% gross margin.

Christopher Krawtschuk: And as we scale the company, not only by filling the capacity with infusions but then continuing to kind of scale the capacity in a gated fashion, over time, as needed, the gross margin will continue to improve, achieving that 70% that we discussed. Great, thanks. Thank you. One moment for our next question, please. Our next question comes from the line of Nizan Yu with, Wells Fargo, your line is now. Hi, thanks for taking our questions. So just curious, when you say multiple patients enrolled for Lithuania, does enrollment imply approval of insurance? And the time from enrollment to cell collection is the main gating factor, those washout period and also the pre-transfusions, if not what might be the gating factor you see. Also, as a quick follow-up, if you can talk about 19% growth to net to date, is that significantly different between Ventaglo and Skysona, and is there any expectation for the groups to net for Lithgenia to be very different from that 19% number?

Thomas: Infusions.

Thomas: Then.

Thomas: Continuing to kind of scale the capacity in our gateways fashion over time as needed.

Thomas: Gross margin will continue to improve to achieve that 70% that we discussed.

Okay.

Speaker Change: Great. Thanks.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question comes from the line of Nevada with Wells Fargo. Your line is now open.

Nevada: Hi, Thanks for taking our questions.

Nevada: So just curious when you say multiple patients.

Nevada: Road for Lyft, Kenya.

Nevada: Enrolment.

Imply approval of insurance.

Nevada: And the time from enrollment to cell collection is the main gating factor.

Those washout period end.

Also the <unk>.

Nevada: Pre transfusions.

Nevada: If not what might be the gating factor.

Nevada: T.

Nevada: Also as a quick follow up if you can talk about.

Nevada: 19% gross to net to date.

Nevada: Is that different significantly between than tableau.

Nevada: <unk>.

Nevada: Any expectation for the gross to net for leukemia to be very different from that.

Nevada: 19, 19% number thanks.

Nizan Yu: Thanks. Thanks for the questions. Tom, why don't you address the enrollments, and then we'll have Chris address that. Yeah, again, again, we're very excited about the multiple enrollments across multiple QTCs. I think it's an indicator of strong demand.

Nevada: Thanks for the question is Tom long.

Tom: The address the.

Tom: Enrollments and then we'll have Chris address that gross to net question yes.

Speaker Change: Again again, we're very excited about the multiple enrollments across multiple <unk> I think it's an indicator of strong demand.

Thomas J. Klima: The road to yes, as we call it, is, you know, multifaceted. And the two big components there are, obviously, as you mentioned, making sure that they're covered by their insurance. And that's, you know, taking approximately what it did Integlo, we're saying on average, about two weeks. And then the second part of being ready is being medically ready. And this is a little bit different with Lipgenia than it was for Integlo. With Lipgenia, there's a washout period of their other medications. For example, hydroxyurea has to be discontinued for at least two months before they start therapy.

Speaker Change: The royalties as we call it is.

Chris Koch: Multifaceted and the two big components. There are obviously as you mentioned, making sure that they're covered by their insurance.

Chris Koch: And Thats, taking approximately what it was in <unk>, we're saying on average about two weeks.

Chris Koch: And then second part of being ready as being medically ready and this is a little bit different with Virginia than it was for us Integra with lip journey.

Chris Koch: There is a washout period are there other medications for example, hydroxyurea has to be discontinued for at least two months before they start therapy and they are also supposed to go for transfusions at least two transfusions one month apart so.

Thomas J. Klima: And they're also supposed to go for transfusions, at least two transfusions one month apart. So once they're enrolled and once they're going through the process, if they're not already doing transfusions, I mean, if they're already doing transfusions and they're not on one of the medications that needs to be discontinued, they can go a lot faster. So I'm a little hesitant to give you an average right now because it's just going to depend on the patients. And we provided enrollments today. Enrollments are an early indicator of patient demand.

Chris Koch: They are enrolled and once theyre going through the process, if they're not already doing transfusions, if they're already doing transfusions and theyre not on one of the medications that needs to be discontinued and it can go a lot faster. So I'm a little hesitant to give you an average right now because it's going to depend on the patients and we provided enrollments today enrollments as an early indicator.

Thomas J. Klima: The thing to watch going forward is the number of patient starts. That continues to be the value-creating moment for the company. And Chris, do you want to comment on that question? Sure. So the 19% that we discussed between the combined two products, just characteristically, the difference between Zinteglo and Skysona is that Zinteglo has an outcomes-based agreement; Skysona does not.

Chris Koch: <unk> of patient demand the thing to watch going forward is number of patient starts that continues to be the value, creating moment for the company.

Chris Koch: And then Chris one covenant Chris sure.

Chris Koch: The 19% that we discussed between the combined two products.

Chris Koch: Just characteristically the difference between <unk> and <unk> has an outcomes based agreements queso and it does not and then what to expect on a go forward basis as lift <unk> comes into the Fray is a higher increase Medicaid population associated with lip, Kenya, and Thats, where you saw that we provided guidance to 20% to 25% associated with the.

Christopher Krawtschuk: And then what to expect on a go-forward basis as Lifgenia comes into the fray is a higher increased Medicaid population associated with Lifgenia. And that's where you saw that we provided guidance of 20 to 25% associated with the combined gross to net population of all three products. Got it. Thanks. Thank you. One moment for our next question, please. Our next question comes from the line of Luca Issi with RBC Capital Markets. The line is now open. Hi, this is Renon for Luca Issi. Thanks for taking my question. I just want to ask, during the last approval call after not receiving the PRV, you mentioned that you'd engage in discussion with the agency and attempt to achieve a potentially positive outcome, ultimately meaning receiving the PRV. Just wondering if there was any update on that.

Chris Koch: <unk> gross to net population of all three products.

Speaker Change: Got it thanks.

Speaker Change: Thank you.

Speaker Change: One moment for our next question please.

Speaker Change: Our next question comes from the line of Luca <unk> with RBC capital markets. Your line is now open.

Speaker Change: Hi, This is Ryan on for Steve. Thanks for taking my question I just wanted to ask during the last approval call. After not receiving the PRD you mentioned that you will engage in discussion with the agency and attempt to achieve a potentially positive outcome.

Speaker Change: Ultimately meeting receiving a P IV just.

Ryan: Just wondering if there was any update on that.

Luca Issi: Yeah, thanks for the question. We have submitted a request for reconsideration and had discussions with the agency. We're not going to elaborate on ongoing discussions with the agency now, but we believe we have a clear and compelling rationale for why Lichenia should be awarded a PRV.

Speaker Change: Yes. Thanks for the question, we have submitted a request for reconsideration and we have discussions with the agency.

Speaker Change: We're not going to elaborate on ongoing discussion agency now, but we believe we have a clear and compelling rationale for wireless churn yet to be awarded a PRP will provide an update when we conclude our discussions.

Andrew Obenshain: We'll provide an update when we conclude our discussion. Thanks for taking my question. Thank you. This will now conclude today's question and answer session. I'll now turn the call back over to Andrew Obenshain for a closing remark. Okay. Thank you, everyone, for joining our call this morning and for your questions. Our management team is available for a follow-up call today, and please reach out to Courtney if you would like to connect. Thank you very much. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day. [inaudible]

Speaker Change: Okay. Thanks, Thanks for taking my question.

Speaker Change: Thank you this.

Speaker Change: This will now conclude today's question and answer session I will now turn the call back over to Andrew Open Sheng for closing remarks.

Speaker Change: Great. Thank you everyone for joining our call. This morning and for your questions. Our management team is available for a follow up call today and please reach out to Courtney if you would like to connect thank you very much. This concludes today's conference call. Thank you for your participation. You may now disconnect everyone have a wonderful day.

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Speaker Change: Yes.