Q1 2024 Ironwood Pharmaceuticals Inc Earnings Call
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Cath: Thank you for standing by. My name is Cath, and I will be your conference operator today. At this time, I would like to welcome everyone to Ironwood Pharmaceuticals' first quarter 2024 investor update call. All lines have been placed on mute to prevent any background noise.
Cathy: Thank you for standing by my name is Cathy and I will be your conference operator today at this time I would like to welcome everyone to the Ironwood Pharmaceuticals first quarter 'twenty 'twenty four investor update call all.
Timothy Chiang: Your next question comes from the line of Tim Chiang with Capital One.
Cathy: All lines have been facing mute to prevent any background noise.
Speaker Change: After the Speakers' remarks, there will be a question and answer session. If you will back to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the call over to Matt Roche Director of Investor Relations. Please go ahead.
Cath: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Matt Roach, Director of Industrial Relations.
Unknown Executive: Thanks, Mike, you know, I was just looking back at the secondary endpoints from the start study. Do you guys plan on showing earlier week data from the CIC patient population at DDW, especially with the secondary endpoints that we didn't meet statistical significance on?
Matt Roache: Thank you, Cath. Good morning, and thanks for joining us for our first quarter 2024 Investor Update. Our press release issued this morning can be found on our website. Today's call and accompanying slides include four forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially.
Michael Shetzline: Yeah, Tim, if you're referring to sort of specifically things like enteral autonomy or things we might see at 24 weeks versus the key secondaries at 48, the answer is yes. And we certainly think that that data further, you know, supports our conviction of good efficacy in both stoma and CIC patient populations. So, yeah, we plan to see that, have that at DDW, as well as sort of the decrease in parenteral support volume and the relative change from baseline in that capacity as well. We, the DDW, have planned an oral presentation.
Matt Roche: Thank you Kathy good morning, and thanks for joining us for our first quarter 2024 investor update.
Matt Roche: Our press release issued this morning can be found on our website.
Matt Roche: Today's call and accompanying slides include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker Change: Such statements involve risks and uncertainties that may cause actual results to differ materially a discussion of these statements and risk factors is available on the current safe Harbor statement slide as well as under the heading risk factors in our annual report on Form 10-K for the year ended December 31, 2023 and in our subsequent SEC filings.
Unknown Executive: A discussion of these statements and risk factors is available on the current Safe Harbor Statement slide, as well as under the heading Risk Factors, in our annual report on Form 10-K for the year ended December 31, 2023, and in our subsequent SEC filings. All four forward-looking statements speak as of the date of this presentation; we undertake no obligation to update such statements. Also included are our non-gap financial measures, which should be considered only as a supplement to, not a substitute for or superior to, gap measures.
Speaker Change: All forward looking statements speak as of the date of this presentation and we undertake no obligation to update such statements.
Speaker Change: Also included a non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures.
Speaker Change: To the extent applicable please refer to the tables at the end of our press release are reconciliations of these measures to the most directly comparable GAAP measures.
Unknown Executive: To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable gap measures. During today's call, Tom McCourt, our Chief Executive Officer, will begin with a brief overview. Mike Shetzline, our Chief Medical Officer, will discuss our pipeline, and Sravan Emany, our Chief Financial Officer, will provide a commercial update and review our financial results and guidance. Today's webcast includes slides, so for those of you dialing in, please go to the events section of our website to access the accompanying slides separately. With that, I'll turn the call over to Tom. Thanks, Matt.
Michael Shetzline: It's obviously still in development, but we have a lot done on it already. And it's very data heavy. I think you'll be very impressed with the amount of data. We're certainly very excited by it because it clearly supports our conviction that the drug is approvable and works in both colon and continuity and stoma patients. So we really are looking forward to sharing that more broadly with the community.
Speaker Change: During today's call Tom Mccourt, our Chief Executive Officer begin with a brief overview, Mike <unk>, our Chief Medical Officer will discuss our pipeline and <unk> <unk>, our chief financial officer to provide a commercial update and review our financial results and guidance.
Thomas A. McCourt: Today's webcast includes slides so for those of you dialing in please go to the events section of our website to access the accompanying slide separately with that I'll turn the call over to Tom Thanks, Matt.
Thomas A. McCourt: Good morning, everyone, and thanks for joining us. We're pleased to be here to discuss the significant advancements that we've made across our portfolio so far this year in our mission to become the leading GI healthcare company. I always like to start with the three strategic priorities, which are maximize LINZUS, advance our GI pipeline, and deliver sustained profits and cash flow. In the first quarter of 2024, Linzess maintained its strong demand momentum, with prescription volume increasing 10% year-over-year, supported by robust new-to-brand prescription growth of 18% versus the prior year, marking the fifth consecutive quarter of double-digit new-to-brand growth.
Michael Shetzline: Mike, just one follow-up question, you know: why is the placebo effect so high in these studies? Because I noticed on your third secondary endpoint, you know, the placebo rate was almost 44%. Can you comment on that?
Thomas A. McCourt: Everyone and thanks for joining us.
Michael Shetzline: Yeah, I mean, I think the key thing to realize there is that the primary endpoint placebo response was 12.5%, right? And that's the key driver for the study's positivity statistically and the path to approval. So I think that's a key thing to keep aware of.
Michael Shetzline: The other thing to realize is the 48-week endpoints never had been tested in GLP2 therapy before, and there can be a tendency for placebo response to change during a clinical trial. And it's also important to realize that what we're actually talking about here, the placebo response, is different at 24 weeks on the primary end point, meaning it's the relative change from baseline versus the one day off, which is the third key secondary you alluded to. That's 44%.
Thomas A. McCourt: I'm pleased to be here to discuss our significant advancements that we've made across our portfolio. So far this year in our mission to become the leading Gi health care company.
Michael Shetzline: And then, in addition, we instituted a new design in this trial, which is the weaning algorithm. So that's clearly played forward through the study. We're going to analyze that date of real cost carefully to make sure we understand it.
Michael Shetzline: But there is a potential opportunity for the weaning algorithm, which would be in place for both placebo and drug-treated patients, could elevate the placebo response at later time points in the study. Because early in the study, it might be more volume-driven, whereas as people wean, then you may fall under the urine output threshold of 10%, and you may get exposed to the weaning algorithm. We're still looking into that, but that's clearly one thing on the list to figure out if that's what made the 48-week endpoint placebo-responsequist so high.
Speaker Change: I always like to start with the three strategic priorities, which are maximize linzess advance, our Gi pipeline and delivered sustained profits and cash flow.
Michael Shetzline: And one final point to realize, even though the placebo response was high at the third key end point in the CIC population, APRA was still numerically superior. So when we get to this sort of aspect of approvability, the fact that APRA still did numerically better will be a positive in terms of not looking at it like we're worse than placebo or things like that. And then given the things we talked about on the primary and the first key secondary, being positive in the whole population, we clearly think that bodes well for a high probability of success for approval in both populations.
Speaker Change: In the first quarter of 2020 for Linzess maintained its strong demand momentum with prescription volume, increasing 10% year over year supported by robust new to brand prescription growth of 18% versus the prior year, marking the fifth consecutive quarter of double digit new to brand growth.
Thomas A. McCourt: As you may have seen in our press release this morning, based on information provided by AbbVie, we recorded an adjustment to the first quarter collaborative arrangement revenue as a result of a gross net change in estimate for LINZUS related to the year ended December 31, 2023, which led to a revised full-year 24 outlook. Trevor will provide more detail on the impact of this one-time adjustment later on the call.
Michael Shetzline: And maybe just one last follow-up, Mike. Are some of these items, do you think that you could get them on the label? Because I think, you know, I think those would be important, especially in the colon and continuity patient population.
Speaker Change: As you may have seen in our press release. This morning based on information provided by Abbvie, We recorded an adjustment to the first quarter collaborative arrangement revenue as a result of a gross to net change in estimate for Linzess related to the year ended December 31 23.
Michael Shetzline: Yeah, I think we're going to work to get everything in the label that we can. We certainly think the drug works very well in both patient populations.
Speaker Change: Which led to our revised full year 'twenty four outlook Trevor will provide more detail on the impact of this onetime adjustment later on the call.
Thomas A. McCourt: Moving to our pipeline, we made important progress across our development programs in the quarter, most notably, we believe we have transformed our company with the positive top-line results in February from the Phase III STARS trial, evaluating the efficacy and safety of apraglitide in patients with short bowel syndrome with intestinal failure. These positive Phase III results demonstrate the potential of praglutide as the first and only weekly GLP-2 therapy for the treatment of adults with short bowel syndrome who are dependent on parenteral support if approved. Following the top-line results shared in late February, we have continued to analyze a robust data set from STARS Phase III.
Michael Shetzline: One of the reasons we included those additional secondaries was for exactly that reason. However, that challenge is higher now, obviously, because they didn't meet statistical significance. But, as I mentioned, both are numerically better. So we certainly have a strong confidence about approvability.
Speaker Change: Moving to our pipeline, we made important progress across our development programs in the quarter most notably.
Speaker Change: We believe we have transformed our company with a positive top line results in February from the Phase III Star trial evaluating the efficacy and safety of a pregnant died in patients with short bowel syndrome with intestinal failure.
Speaker Change: These positive phase III results demonstrate the potential of <unk> as the first and only weekly G. LPG therapy for the treatment of adults with short bowel syndrome, who are dependent on parental support if approved.
Speaker Change: Following the topline results shared in late February we have continued to analyze a robust dataset of the Starz phase III.
Thomas A. McCourt: New data was submitted as a late-breaking abstract and selected for an oral presentation at the upcoming Digestive Disease meeting. These data further strengthen the clinical profile of pragmatite, which we're eager to share with the broader GI medical and scientific community. Based on the combination of demonstrated efficacy, tolerability, and once-weekly dosing, we are confident that privatized has a high probability of approval. We believe these three distinguishing factors will drive uptake, compliance, and improvement in quality of life for patients, reinforcing our belief that apraglitide has the potential to achieve a billion dollars in peak net sales.
Speaker Change: And new data was submitted as a late breaking abstract and selected for an oral presentation at the upcoming digestive disease meeting.
Speaker Change: These data further strengthen the clinical profile and prioritize which we're eager to share with a broader Gi medical and scientific community.
Speaker Change: Based on the combination of demonstrated efficacy tolerability and once weekly dosing we are confidence they are prioritized as a high probability of approval. We believe these three distinguishing factors will drive uptake compliance and improvement in quality of life for patients reinforcing our belief that are frankly.
Speaker Change: <unk> has the potential to achieve a $1 billion in peak net sales.
Thomas A. McCourt: We are now focused on ensuring a successful path forward to commercialization, an area where we have significant expertise and a track record of success. We are working swiftly and plan to file the NDA as soon as possible with a label focus on adult SBS patients who are dependent on parental support. We continue to expect a commercial launch in 2025. We estimate that there are approximately 17,000 adult patients across the United States and Europe who suffer from short bowel syndrome with intestinal failure, with a significant portion of these patients still untreated by GLP-2.
Speaker Change: We are now focused on ensuring a successful path forward to commercialization in area, where we have significant expertise and a track record of success.
Speaker Change: We are working swiftly and plan to file the NDA as soon as possible with a label focus on adult SBS patients who are dependent on parental support.
Speaker Change: And continue to expect a commercial launch in 2025.
Speaker Change: We estimate that there's approximately 17000 adult patients across the United States and Europe, who suffer from short bowel syndrome with intestinal failure with a significant portion of these patients still untreated by G. L. P twos.
Thomas A. McCourt: We have the commercial infrastructure already in place and expect only incremental investments needed to launch a praglite successfully. We are well on our way with the launch planning and believe we are equipped to commercialize a preglotide if approved, with a strong sales presence already established in the offices of GI specialists across the United States. We are confident that the positive results from the STARS trial coupled with our proven track record of effective commercial execution position us uniquely in the market. We're excited to leverage our expertise to maximize the potential of praglutide and drive meaningful, impactful outcomes for patients with short bowel syndrome who are dependent on parental support.
Speaker Change: We have the commercial infrastructure already in place and expect only incremental investments needed to launch a prioritized successfully.
Speaker Change: We are well on our way with the launch planning and believe we are equipped to commercialize our <unk> if approved with a strong sales presence already established in the offices of Gi specialists across the United States.
Speaker Change: We are confident the <unk>.
Speaker Change: Positive results from the status trial, coupled with our proven track record of effective commercial execution position us uniquely in the market.
Speaker Change: We're excited to leverage our expertise to maximize the potential for a pregnant died and drive meaningful impactful outcomes for patients with short bowel syndrome, who are dependent on parental support.
Speaker Change: So to wrap up we.
Thomas A. McCourt: We are poised for future growth for the following reasons. First, Linzess continues to deliver robust demand growth and is driving meaningful cash flows for Ironwood, which we expect to continue until generic entry in 2029. Second, we believe we have transformed our company with positive phase three results from the STARS trial, which reinforced our conviction in a pragmatized high probability of approval for long-term revenue and profit growth potential. Finally, we're excited to see the Phase 2 top-line results from CMP 104 later this year.
Speaker Change: We are poised for future growth for the following reasons first linzess continued to deliver robust demand growth and is driving meaningful cash flows for ironwood, which we expect to continue until generic entry in 2029.
Speaker Change: We believe we have transformed our company with a positive phase III results from the status trial, which reinforces our conviction in a prioritize high probability of approval and long term revenue and profit growth potential.
Speaker Change: Finally, we're excited to see the phase two topline results.
Speaker Change: From CMP 104 later this year, we believe CMP 104 has the potential to be a disease modifying therapy for the treatment of primary biliary cholangitis with that I'll hand, it over to Mike to discuss our <unk> and our pipeline in more detail.
Thomas A. McCourt: We believe CMP 104 has the potential to be a disease-modifying therapy for the treatment of primary biliary cholangitis. With that, I'll hand it over to Mike to discuss Praglutide and our pipeline in more detail.
Michael Shetzline: Thanks, Tom. And good morning, everyone. We're pleased with the progress we made across our pipeline programs in the first quarter. I'll begin with apiglutide for short bowel syndrome in patients dependent on parenteral support. We're very proud of the positive results from the Pivotal Global Phase 3 STAR study, which is the largest ever GLP-2 trial in short bowel syndrome with intestinal failure, generating a robust data set across 68 sites and 18 countries. An important aspect of the STARS Phase III study design was the rigorous optimization of parenteral support volumes prior to treatment.
Operator: Okay, great. Thanks. Ladies and gentlemen, that concludes our Q&A session and today's call. Thank you all for joining. You may now disconnect. Please wait.
Mike: Thanks, Tom and good morning, everyone. We're pleased with the progress we've made across our pipeline programs in the first quarter I'll begin with Africa tied for short bowel syndrome in patients dependent on French will support we're very proud of the positive results from the pivotal global Phase III Star study, which is the largest ever <unk> trial in.
Michael Shetzline: That resulted in a low placebo rate, which in turn generated a robust treatment effect for apiglutide in this patient population. Apiglutide is the only once-weekly GLP-2 to meet its primary endpoint of relative change from baseline in actual weekly parenteral support volume at week 24, with a two-times treatment effect relative to placebo, driven by both stoma and colon incontinuity. As a clinician myself, I'm thrilled about Apra Gutai's strong profile, including the convenience of once-weekly administration and its potential to benefit a patient community in need of new treatment options.
Operator: Ladies and gentlemen, that concludes our Q&A session on today's call. Thank you all for joining us. You may now disconnect. Please wait; the conference will begin shortly.
Mike: Short bowel syndrome, with intestinal failure generating a robust dataset across 68 sites in 18 countries.
Mike: An important aspect the star's phase III study design with a rigorous optimization of parenteral support volumes prior to treatment that resulted in a low placebo rate, which in turn generated a robust treatment effect for Africa tied in this patient population.
Mike: At Berkeley tightest, the only once weekly G. L. P to to meet its primary endpoint of relative change from baseline in actual weekly parental support volume at week 24, with a two times treatment effect relative to placebo driven by both stoma and colon in continuity populations.
Mike: As a clinician myself I'm thrilled about <unk> strong profile, including the convenience of once weekly administration and its potential to benefit a patient community in need of new treatment options.
Mike: Options.
Michael Shetzline: As summarized on slide 9, I'm excited by the demonstrated efficacy in the primary endpoint in both stoma and colon and continuity patient populations at 24 weeks. With further analysis of the data, we're also excited by the rapid onset of treatment effect observed at week 8 and onward throughout the study. The fact that some patients in both stoma and colon incontinuity populations reached enteral autonomy or a complete weaning off of parenteral support, and the low prevalence of reported injection site reactions and abdominal distension, which are in line with placebo.
Mike: Summarized on slide nine I am excited by the demonstrated efficacy in the primary endpoint in both <unk> and colon and continuity patient populations at 24 weeks.
Mike: With further analysis of the data. We're also excited by the rapid onset of treatment effect observed at week eight and onward throughout the study.
Mike: That some patients in both stoma ends colon and continuity populations reached enter autonomy or a complete weaning off of parental support.
Mike: And the low prevalence of reported injection site reactions and abdominal distension, which are in line with placebo.
Michael Shetzline: Overall, we believe apiglutide's differentiated profile, including its demonstrated efficacy and tolerability and convenience of once-weekly dosing support our belief in apiglutide's high probability of approval and potential to improve the standard of care for patients with short bowel syndrome who are dependent on parenteral support. We're very much looking forward to the upcoming DDW meeting and presenting data that we believe further supports and enhances We also look forward to continuing to evaluate the robust data set from the largest ever GLP-2 study in short bowel syndrome with intestinal failure and plan to disclose further findings at additional meetings later this year.
Mike: Overall, we believe Africa types differentiated profile, including its demonstrated efficacy and tolerability and convenience of once weekly dosing support our belief in Africa types high probability of proposal and potential to improve the standard of care for patients with short bowel syndrome, who are dependent on parental support.
Mike: Much looking forward to the upcoming <unk> meeting and presenting data, which we believe further supports and enhances the clinical profile of <unk>. We also look forward to continuing to evaluate the robust dataset from the largest ever <unk>. Two study in sharp <unk> syndrome, with intestinal failure and plan to disclose further findings at additional meetings late.
Mike: For this year.
Michael Shetzline: In addition to the positive phase three results from Aproglutide and Shortbout syndrome with intestinal failure, we also announced positive results from our exploratory stargaze trial of apraglutide in patients with steroid refractory, gastrointestinal, acute graft versus host disease. The primary objective of the trial was to evaluate the safety and tolerability of once-weekly apiglutide in steroid refractory acute Results up to day 91 showed that upperglutide in acute GVHD was well tolerated with an acceptable safety profile, the study's primary objective.
Mike: In addition to the positive phase III results from <unk> tightened short bowel syndrome with intestinal failure. We also announced positive results from our exploratory stargaze trial of accurately tied in patients with steroid refractory gastrointestinal acute graft versus host disease. The primary objective of the trial was to evaluate the <unk>.
Mike: <unk> and Tolerability of once weekly <unk> tied in steroid refractory acute gvhd patients treated with standard of care.
Mike: The results up to day 91 showed that <unk> tied in acute gvhd was well tolerated with an acceptable safety profile. The study's primary objective. In addition to evaluating safety secondary endpoints assessed efficacy via lower Gi in Oregon responses. The majority of patients responded to treatment by de <unk>.
Michael Shetzline: In addition to evaluating safety, secondary endpoints assessed efficacy via lower GI and all organ responses. The majority of patients responded to treatment by day 28 and day 56. All lower GI responders at day 28 maintained their response through days 56 and 91. We're encouraged by the data on safety, tolerability, and maintenance of response and expect to present additional data at a future medical congress. The Stargrave study will continue through its two-year end point when apiglutide will be evaluated for safety and efficacy.
Mike: Eight and day 56, all lower Gi responders at day 28 maintained their response through day, 56% and 91.
Mike: We're encouraged by the data on safety Tolerability and maintenance of response and expect to present additional data at a future medical Congress. The star grades study will continue through its two year endpoint when <unk> will be evaluated for safety and efficacy.
Michael Shetzline: Moving to CMP 104 on slide 10, in the first quarter, CORE completed patient enrollment for the Phase 2 proof-of-concept study in patients with PBC and are on track to report top-line results in the third quarter of this year. The CMP 104 Phase 2 study is a 42-patient placebo-controlled study evaluating the safety, tolerability, pharmacodynamics, and efficacy of CMP 104 in patients with PBC Top prime results will be based on data through day 120 of treatment.
Mike: Moving to <unk> on slide 10 in the first quarter core completed patient enrollment for the phase II proof of concept study in patients with PBC and are on track to report top line results in the third quarter of this year.
Mike: The CMP 104 phase II studies of 42 patient placebo controlled study evaluating the safety Tolerability pharmacodynamics and efficacy of <unk> in patients with PBC, who are unresponsive to ATCA Enduro Calva top brand results were based on data through de <unk>.
Mike: 100 <unk> of treatment.
Michael Shetzline: The strong immunology underpinning the CMP program is focused on targeting the specific PDCE2 antigen responsible for the T cell driven pathology of PBC. Last year, we saw early data showing favorable PDCE2-specific T cell responses in patients treated with CMP104. In the top-line results anticipated in the third quarter, we're looking for a demonstrated T-cell response, which we believe is a leading indicator of clinical benefit. The study will also evaluate several markers of liver function.
Mike: The strong immunology underpinning the CMP program is focused on targeting the specific P. D. C. <unk> antigen responsible for the T cell driven pathology of PBC.
Mike: Last year, we saw early data showing favorable PDC to specific T cell responses in patients treated with <unk> 104.
Mike: In the top line results anticipated in the third quarter, we're looking for a demonstrated T cell response, which we believe is a leading indicator of clinical benefit. The study will also evaluate several markers of liver function a positive signal on liver function markers. In addition to the T cell response could further support the potential for <unk>.
Michael Shetzline: A positive signal on liver function markers in addition to the T-cell response would further support the potential of CMP104. We believe CMP104 has the potential to be the first disease-modifying therapy for patients suffering with PBC, as there are no therapies on the market today that address the root cause of the T-cell-driven immune destruction of the liver bile duct.
Mike: We believe <unk> has the potential to be the first disease modifying therapy for patients suffering with PBC as Sarah noted therapies on the market today that address the root cause of the T cell driven immune destruction of the liver biopsy.
Sravan Kumar Emany: With that, I'll turn it over to Shreve.
Mike: With that I'll turn it over to Shannon.
Sravan Kumar Emany: Thanks, Mike, and good morning, everyone. I'll begin on slide 12.
Shannon: Thanks, Mike and good morning, everyone I'll begin on slide 12, as Tom mentioned earlier Linzess carrying deposit demand momentum into the first quarter.
Sravan Kumar Emany: As Tom mentioned earlier, Linzess carried positive demand momentum into the first quarter. This is now the 12th year on the market for Linzess, and as you can see, prescription demand remains remarkably strong.
Shannon: This is now the 12th year on market for Linzess and as you can see prescription demand remains remarkably strong.
Sravan Kumar Emany: Linzess volume rose 10% year-over-year in the first quarter, while new-to-brand prescriptions increased 18% compared with the first quarter of 2023, demonstrating that patients and healthcare professionals continue to choose Linzess. We believe the strong demand momentum and success of Linzess will continue as a result of high treatment satisfaction with both patients and healthcare professionals, combined with increased utility from the pediatric syndication, class-leading formulary access, guideline recommendations, focused commercial execution, and new patient start acceleration.
Shannon: Linzess volume rose, 10% year over year in the first quarter, while new to brand prescriptions increased 18% compared to the with the first quarter of 2023 <unk>.
Shannon: Reinforcing that patients and healthcare professionals continue to choose linzess.
Shannon: We believe the strong demand momentum and success of Linzess will continue as a result of high treatment satisfaction with both patients and health care professionals combined with increased utility from the pediatrics indication class, leading formulary access guideline recommendations focused commercial execution.
Shannon: And new patient start acceleration.
Sravan Kumar Emany: I'd like to take a moment to provide additional details on the ones that are gross to net change, an estimate that was reflected in the first quarter of 2024 on slide 13. In the first quarter, Avvi reported U.S. net sales of $257 million, an increase of 3% year-over-year. Based on information subsequently provided by ADVD, Ironwood estimates a $60 million adjustment to Linzess U.S. net sales, representing the difference between AbbVie's gross-to-net estimates made in 2023 and actual subsequent payments made.
Shannon: I'd like to take a moment to provide additional details on the linzess gross to net change.
Shannon: An estimate that was reflected in the first quarter of 2024 on slide 13.
Shannon: In the first quarter Abbvie reported U S net sales of $257 million, an increase of 3% year over year.
Shannon: Based on information subsequently provided by Abbvie Ironwood estimates, a $60 million adjustment to eat Linzess U S. Net sales representing the difference between Abbvie gross to net estimates made in 2023 and.
Shannon: And actual subsequent payments made as.
Sravan Kumar Emany: As a result of this change in est... Ironwood recorded a $30 million reduction in collaborative arrangements revenue. With this adjustment, total Ironwood revenue in the first quarter was approximately $75 million, down 28%. Turning to our first quarter financial performance slide on 4th, Q1 Linzess U.S. net sales, as reported by AbbVie, were $257 million, an increase of 3% year-over-year. Commercial Margin, excluding the gross to net change in estimate, was 71% in the first quarter of 2024, compared to 73% in the first quarter of 2023.
Shannon: As a result of this change in estimate Ironwood recorded a $30 million reduction to collaborative arrangements revenue.
Shannon: With this adjustment total ironwood revenue in the first quarter was approximately $75 million.
Shannon: Down 28% year over year.
Shannon: Turning to our first quarter financial performance slide on <unk>.
Shannon: <unk> performance on slide 14.
Sravan Kumar Emany: Q1, Linzess U S net sales as reported by Abbvie or $257 million increase of 3% year over year.
Shannon: And as commercial margin, excluding the gross to net change in estimate was 71% in the first quarter of 2024 compared to 73% in the first quarter of 2023.
Sravan Kumar Emany: As I noted a few moments ago, Ironwood revenue was $75 million, driven primarily by U.S.-Linzess collaboration revenue of $72 million. However, revenues in Q1 were lower year-over-year, primarily due to the $30 million change in estimate recorded for collaborative arrangements revenue. As a result, gap net loss was $4 million, and adjusted EBITDA was $13 million.
Shannon: As I noted a few moments ago Ironwood revenue was $75 million driven primarily by U S. Linzess collaboration revenue of $72 million revenues in Q1 were lower year over year, primarily due to the $30 million change in estimate recorded to collaborative arrangements revenue.
Sravan Kumar Emany: As a result, GAAP net loss was $4 million and adjusted EBITDA was $13 million.
Sravan Kumar Emany: In the first quarter, Ironwood generated approximately $45 million in cash flow from operations and ended the quarter with $122 million in cash and cash equivalents. After repaying $25 million of the outstanding principal balance on our revolving credit facility in cash, as of the end of March, the outstanding drawn balance on the revolver was $275 million.
Sravan Kumar Emany: In the first quarter Ironwood generated approximately $45 million in cash flow from operations.
Shannon: And ended the quarter with $122 million in cash and cash equivalents after repaying $25 million of the outstanding principal balance.
Shannon: Revolving credit facility and cash.
Sravan Kumar Emany: As of the end of March the outstanding drawn balance on the revolver was $275 million.
Sravan Kumar Emany: In the near term, we continue to expect to settle our 2024 convertible notes that mature on June 15 through a combination of cash on hand and undrawn revolver capacity. Regarding capital allocation, we are in a fortunate position with meaningful cash flow generation from MNZES, which we believe will be sufficient to fund all ongoing operations, and we do not anticipate the need to access the capital markets for incremental funding to support the potential Afroglutide launch and further progress our development program.
Sravan Kumar Emany: In the near term, we continue to expect to settle our 2024 convertible notes that mature on June 15th through a combination of cash on hand, and Undrawn revolver capacity.
Sravan Kumar Emany: Regarding capital allocation, we are in a fortunate position with meaningful cash flow generation from Linzess, which we believe will be sufficient to fund ongoing operations and we do not anticipate the need to access the capital markets for incremental funding.
Sravan Kumar Emany: Sport the potential <unk> launch and further progress our development programs.
Sravan Kumar Emany: Next, I'll review our updated 2024 guidance on slide 15. As a result of Lindsay's growth to net change in estimate in the first quarter, full year 2024, we now expect to lose us net sales decline in the mid single digits percent, Ironwood revenue of between $405 and $425 million, and Adjusted EBITDA of greater than $120 million.
Sravan Kumar Emany: Next I'll review, our updated 2024 guidance on slide 15.
Sravan Kumar Emany: As a result of Linzess gross to net change in estimate in the first quarter for full year 2024, we now expect to Linzess U S. Net sales decline in the mid single digits percent.
Sravan Kumar Emany: Ironwood revenue of between 405, and $425 million and adjusted EBITDA of greater than $120 million.
Sravan Kumar Emany: To wrap up, we've made significant advancements across our portfolio in the first... We look forward to sharing additional detail from the Apiglutide STARS Phase 3 study at Digestive Disease Week later this month, which we believe will further enhance the clinical profile of apriclutal. We believe we are well on our way to diversifying our portfolio and extending our growth horizon beyond... Looking ahead, we are focused on moving quickly to get apiglutide approved and to patients with SPS who are dependent on parental support as soon as possible, and executing across our strategic priorities by advancing our other GI pipeline assets, driving robust LINZES demand growth, and delivering sustained profits and cash. I want to close by thanking all of our employees, patients, caregivers, and advocates for their shared dedication to advancing and supporting therapies for GI disease. Operator, you may now open up the line for questions.
Sravan Kumar Emany: To wrap up we've made significant advancements across our portfolio in the first quarter.
Sravan Kumar Emany: Look forward to sharing additional detail from the <unk> phase III study at digestive disease week later this month, which we believe will further enhance the clinical profile of <unk>.
Sravan Kumar Emany: With positive stars data readout, we believe we are well on our way to diversifying our portfolio and extending our growth horizon beyond linzess.
Sravan Kumar Emany: Looking ahead, we are focused on moving quickly to get <unk> approved and to patients with Sps or dependent on parental support as soon as possible.
Sravan Kumar Emany: And executing across our strategic priorities by advancing our other Gi pipeline assets.
Sravan Kumar Emany: Driving robust linzess.
Sravan Kumar Emany: <unk> growth and delivering sustained profits and cash flow.
Sravan Kumar Emany: I want to close by thanking all of our employees patients caregivers and advocates for their shared dedication to advancing and supporting therapies for Gi diseases.
Sravan Kumar Emany: Operator, you May now open up the line for questions.
Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, press 1 again. If you are called upon to ask your question and are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press 1 to join the queue. Your first question comes from a loudspeaker on your device. from the line David Amsalim with Piper Sandler. Your line is in.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question Press Star one again.
David A. Amsellem: Called upon to ask your question and listening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking a question again press star one to join the queue. Your first question comes from the line of David <unk> with Piper Sandler Your line is open.
David A. Amsellem: Hey, thanks. So I have a couple questions here. I know you've got the data coming at DDW, but I just wanted to get some additional color on what you mean about efficacy across both stoma and colon-in-continuity patients. And I guess what I'm getting at is just within the CIC subgroup, is there statistical separation? I know what you had shown at 48 weeks, but is there statistical separation, say, at earlier time points, say 24 weeks or 12 weeks?
David A. Amsellem: Hey, Thanks, So a couple of questions here I know you've got the data coming.
David A. Amsellem: DW, but.
David A. Amsellem: Just wanted to get.
David A. Amsellem: Some additional color on on what you mean about efficacy across both stoma and colon and continuity patients and I guess, what I'm getting at is just within the CIC subgroup.
David A. Amsellem: Is there a statistical separation I know what you had shown at 48 weeks, but is there a statistical separation.
David A. Amsellem: Say at earlier time points say 24 weeks or 12 weeks. So just help us understand that and if he can answer it that's fine, but I thought I'd ask the question anyway, and then secondly on 104, what do you have to see.
Unknown Executive: So just help us understand that. And if you can't answer it, that's fine, but I thought I'd ask the question anyway. And then, secondly, on 104, what do you have to see in order to move forward? Help us understand, you know, how you're thinking about the bar for continued advancement. I'll leave it there. Thanks.
Unknown Executive: In order to move forward help us understand how you're thinking about the bar for continued advancement I'll leave it there. Thanks.
Unknown Executive: Okay, thanks for the question, David. So we're very excited about the data from apiglutide, and a lot has been discussed around CIC versus stoma. It's just critical to remember that the primary endpoint included both stoma and colon incontinuity patients. So we clearly think we have a high probability of approval for the whole population, stoma and CNC, based on the fact that colon incontinuity patients contributed to the primary endpoint. That was quite distinct from what happened with the regulatory precedent that GATTAC set, where they really didn't see a meaningful contribution from the colon incontinuity.
Speaker Change: Okay. Thanks for the question David.
Unknown Executive: We're very excited about the data from accurately tight and a lot has been discussed around CIC versus down there. It's just critical to remember that the primary endpoint included both stoma and colon and continuity patients. So we clearly think we have a high probability of approval for the whole population stoma NCIC based on the fact that.
Unknown Executive: Colon and continuity patients contributed to the primary endpoint that was quite distinct from what happens with the regulatory precedent that GATX said, where they really didn't see a meaningful contribution for the colon and continuity patients. So we continue to believe that the potency of the of the asset is well established now with this phase III data.
Unknown Executive: So we continue to believe that the potency of the asset is well established now with this phase three data and that that's given us the opportunity for once weekly therapy. And what you'll see at DDW is further rollout of the colon and continuity specific data, which certainly gives us even more confidence in the efficacy in colon and continuity patients. And we certainly fully support the submission we're gonna do for the whole population and have a high probability of success for approval in colon and continuity and stoma patients.
Unknown Executive: And that's given us the opportunity for once weekly therapy, and what Youll see at Dws further rollout of the colon and continuity specific data, which certainly gives us even more confidence in the efficacy in colon and continuity patients and we certainly fully support the submission we're going to do for the whole population and have a high probability of success.
Unknown Executive: <unk> for approval in colon and continuity and stole my patients. In addition, there'll be a fair amount of Tolerability data, which will further support the differentiation of <unk> from other <unk> therapies in the class, we've really learned a lot from the.
Unknown Executive: In addition, there will be a fair amount of tolerability data which will further support the differentiation of apiglutide from other GLP-2 therapies in the class. We've really learned a lot from the pivotal trial data in terms of safety and tolerability. And you'll see details on events and numbers at DDW which really support a very safe and well tolerated profile. And in principle, most all events were actually in line with placebo. So we think it's a very good profile for commercial success. And the next question you asked was about CMP, OK?
Unknown Executive: Pivotal trial data in terms of the safety and Tolerability and Youll see details on events that numbers at CDW, which really support a very safe and well tolerated profile and in principle. Most all events were actually in line with placebo. So we think it's a very good profile for commercial success.
Unknown Executive: Yes.
Unknown Executive: And the next question you asked was on CMP.
Chase Richard Knickerbocker: What we hope to see in CMP as we discuss the real strength of the CNC program is the science behind the immunology and what we know about the pathology of PBC. It's a PDCE2-driven disease. And we can test the T cells that destroy the vial duct with PDCE 2 to determine if treatment with CMP 104 modulates or reprograms those T cells. So we're really looking for a demonstrated T cell effect that shows that those T cells are no longer pathologic, and no longer prone to destroying bile ducts.
Unknown Executive: And what we planned what we hope to see in CMP as we discuss the real strength of the CNC program is the science behind the immunology and what we know about the Panther allergy of PBC, It's a PDC <unk> driven disease and we can test the T cells that destroyed the bile ducts.
Chase Richard Knickerbocker: With PDC to to determine if treatment with <unk> and fluor.
Chase Richard Knickerbocker: And in combination with that, we're looking for a meaningful clinical outcome, and that's why we have a number of liver function assessments in the trial as well. And this 120-day assessment gives the opportunity to look at that demonstrated T-cell response and the potential opportunity to improve liver function.
Chase Richard Knickerbocker: Modulates of re programs those T cells. So we're really looking for your demonstrated T cell effect that shows that <unk>. Those T cells are no longer pathologic no longer prone to destroying bile ducts and in combination with that we're looking for a meaningful clinical outcome and thats why we have none.
Chase Richard Knickerbocker: Number of liver function assessments in the trial as well and this 120 day assessment should give us the opportunity to look at that demonstrated T cell response, and the potential opportunity to improve of liver function assessment.
Speaker Change: Okay. Thank you.
Unknown Executive: Your next question. Your next question comes through the line of Chase. Knickerbocker with Craig Hallam, your line is open.
Speaker Change: And our next question.
Chase Richard Knickerbocker: All right.
Chase Richard Knickerbocker: Your next question comes from the line of Chase.
Chase Richard Knickerbocker: Knickerbocker with Craig Hallum. Your line is open.
Unknown Executive: Good morning, guys. Thanks for taking the questions. Maybe just digging in a little bit on the gross to net adjustment from last year. Can you just talk to us about kind of what that was specifically as far as you know, probably, you know, by payer channel or just however you think it's best to break that down just a little bit more detail around exactly what that $60 million adjustment was that was not accounted for by AbbVie?
Chase Richard Knickerbocker: Good morning, guys. Thanks for taking the questions, maybe just dig in a little bit on the gross to net.
Unknown Executive: Jonathan from last year can you just talk to us about kind of what that was specifically as far as you know probably by payer channel or just however, you think it's best to break that down just a little bit more detail around exactly what that $60 million adjustment was that was not accounted for by Abbvie.
Unknown Executive: Yeah. So first of all, Chase, thank you for your question. Good morning.
Unknown Executive: Sure.
Unknown Executive: I'd say that, zooming out first, I would say that fluctuations in gross to net relating to shifts and channel mix are common and their normal occurrence within this industry, as you know. It's something that happens on a periodic basis for us, but rarely is it this material.
Unknown Executive: I think the change in estimate for us was based on information that had to be provided subsequent to their reporting. And it was the difference between the gross investments during the year and the actual invoices they got. And it was primarily associated with government and contractual. I think that's the, you know, the coloring probably can give you in terms of where we were.
Unknown Executive: That's helpful. Maybe one for Mike.
Mike: What about what's left to be done with all the data work that you've you've been doing in the background to prepare you know the submission.
Mike: Yeah sure. That's a good question and clearly that's our key priority number one two and three priorities is the app or a submission. So it's all hands on deck for that will clearly continue to look at the data. That's what resulted in the D. D W or abstract acceptance or very excited about that that's gonna support obviously getting the <unk>.
Mike: Data out, but also all that date is part and parcel to the submission and the lines with everything we're trying to do to to get the submission in and on track. So we're currently not planning the pre N D. A meeting, which we will will do as well and we're really looking forward to moving that submission forward as expeditiously as possible will still targeting a potential launch in 2020.
Unknown Executive: Can you just talk around kind of next steps with the APRA NDA, you know, certainly looking forward to the data, just maybe specifically on the filing. Have you had your type B meeting? Or is that, you know, scheduled for soon? And then, you know, kind of talk a little about what's left to be done with all the data work that you've been doing in the background to prepare, you know, the submission? Yes,
Unknown Executive: Yes, that's a good question, and clearly, that's our key priority. Our number one, two, and three priorities are the APRA submission. So it's all hands on deck for that. We clearly continue to look at the data, and that's what resulted in the DDW oral abstract acceptance.
Unknown Executive: So we're very excited about that. That's going to support, obviously, getting the data out, but also, all that data is part and parcel of the submission and aligns with everything we're trying to do to get the submission in and on track. So we're currently planning the pre-NDA meeting, which we will do as well. And we're really looking forward to moving the submission forward as expeditiously as possible. We're still targeting a potential launch in 2025, and as we get more granular on the submission timelines, we'll certainly make that available.
Unknown Executive: Five and as we get more granular on the submission timelines will certainly make that available.
Unknown Executive: Okay, and then just last for me on CNP 104. Just to confirm for investors, when we get that data in 3Q, that will be, you know, both T cell response, and we will also be able to see that liver function data. Is that right, Mike?
Speaker Change: Okay, and then just last for me on C. N. P 104, just to confirm foreign investors when we get that data and three Q that will be you know both T cell response, and we will also be able to see that liver function data that right Mike.
Unknown Executive: Yeah, we plan to talk about the T cell, the demonstrated T cell effects to obviously prove the point of the program, which is the reprogramming and the immunology around the PDCE2 specific antigens. So we plan to share that as well as liver function outcomes as well. Remember, it's a 120 day study. It's a phase two study. It's the first human study for CMP104, and so that is a sort of early timeframe.
Mike: Yeah, we plan to talk about the T cell to demonstrate a T cell effects. Obviously proved the point of the program, which is the re programming and the immunology around the P. D. C to specific antigens. So we plan to share that as well as liver function uhm outcomes as well remember it's 120 day study, it's a phase two study.
Unknown Executive: It's the first Uhm inhuman study for C. M. P 104, I've been so that that is a sort of early timeframe. You may know that things like a bed of colic acid and <unk> and those products went out to a year, but we clearly think based on the science and technology and why we did the deal that we have an opportunity to see real early clinical bad point and point in those sliver <unk>.
Unknown Executive: You may know that things like obeticolic acid and Simibe and those products went out for a year, but we clearly think, based on the science and the technology and why we did the deal, that we have an opportunity to see a real early clinical endpoint in those liver function assessments.
Unknown Executive: Function assessments.
Unknown Executive: Great, and just last year, having to come back to you on guidance. I mean, looking at it, it certainly seems that really the only material changes to your guys' expectations were this $30 million adjustment. Is that fair to say, you know, as far as, you know, the Medicaid changes on the rebate cap this year, everything else is the same as far as your expectations go on, you know, your revenue expectations in 2024 from Windsus?
Speaker Change: Great and then just slash for having to come back to you just on guidance I mean looking at it you know it certainly seems that really the only material changes to your guys' expectations was the 30 million dollar judgment is that fair to say you know as far as you know the Medicaid changes on the on the rebate cap. This year everything else is the same as far as your expectation goes on you know your revenue expert.
Unknown Executive: Patients in 2024 from <unk>.
Unknown Executive: Yes, so I would say that our guidance now is reflective of the one-time adjustment. As you can see, based on AbbVie's reporting, I think our performance of the brand continues to be really strong with double-digit demand growth. The pricing headwinds that we would have faced or we anticipated having of high single-digit price erosion and low single-digit revenue growth were kind of there outside of the one-time out-of-period
Speaker Change: Yes, so I would say that our guidance now is reflective of the one time adjustment as you can see how the.
Unknown Executive: An AD these reporting.
Unknown Executive: I think we would have been <unk> performance of the brand continues to be really strong with double digit demand growth.
Unknown Executive: Pricing headwinds that we would've faced are we anticipate having of of high single digit price erosion in low single digit revenue growth. We're we're kind of their outside of the one time period address.
Unknown Executive: I think the only other comment that, you know, I would make on this is, as you can see, the demand is really remarkable with regard to the kind of growth we're seeing, you know, in year 11, year 12, you know, for the brand, which we obviously want to continue to nurture. And what we do know is, you know, there's really kind of three things that are driving that. Certainly, high treatment satisfaction. No, no question.
Speaker Change: Thank you <unk>.
Speaker Change: You know I'll make on this is as you can see the demand.
Unknown Executive: He was really remarkable with regard to what kind of growth regime.
Unknown Executive: 11 or 12.
Unknown Executive: For their brand, which we obviously wanted to continue to nurture and what and what we do know is you know it was really kind of three things that are driving that certainly the high treatment satisfaction no no question.
Unknown Executive: But I think the other piece is payer access, which is part of the marketing mix. Now, what we'll be doing moving forward is really working with our partner to continue to evolve that marketing mix so we can really optimize the value that Linzess can create. So, you know, we have been doing this from day one. As we've evolved the marketing mix, we've reduced the investment and increased the profit of the brand.
Unknown Executive: Well I think the other pieces pair access which is part of the marketing mix now what we'll be doing moving forward. It was really working with her partner to continue to evolve that marketing mix. So we can really optimize the value that linzess can create so we've been doing this from day, one as we've evolved the marketing mix we read.
Unknown Executive: <unk> best friend and increase the profit of the brand.
Unknown Executive: Move forward I think we're seeing very durable growth and and brand demand and what we really want to focus on now is what is the appropriate.
Unknown Executive: As we move forward, I think we're seeing very durable growth in brand demand, and what we really want to focus on now is what is the right marketing mix and investment to continue to drive profits to the bottom line.
Unknown Executive: Appropriate marketing mix and investment to continue to drive profits to the bottom line.
Speaker Change: Great. Thanks.
Unknown Executive: Your next question comes from the line of Amy Li with Jeffries. Your line is open.
Speaker Change: Your next question comes from the line of any leave it in checking your line is open.
Amy Li: Hey, good morning, guys. Thanks so much for taking my question.
Amy Li: Hey, guys. Thanks, so much for taking my question Uhm what is your current internal estimate on their ability treatment and will we get any data at T. T W to support <unk>.
Amy Li: <unk>. Additionally, can you give us any update on how you were thinking about the address on the market for opera <unk> I C. D 10 cards being put in place late last year.
Amy Li: And how many of these patients you had access to you with your current sales force.
Unknown Executive: On APRA Glutide, what is your current internal estimate on durability of treatment? And will we get any data at CDW to support potential differentiation on this over GADx? Additionally, can you give us any updates on how you're thinking about the addressable market for APRA post the ICD-10 codes being put in place late last year? And how many of these patients do you have access to with your current sales force?
Amy Li: My wife, just start with the first one.
Michael Shetzline: So thanks, Amy. So in terms of durability, I suspect you mean the longer term. I mean, clearly, as the only once weekly available therapy, we certainly think that phase three data supports the weekly administration, and sort of the pharmacokinetics and pharmacodynamics really lend themselves to that once weekly dosing. So the data speaks for itself in that regard.
Unknown Executive: Well, Mike, why don't you start with the first one, and I'll answer the second one. Thanks, Amy.
Speaker Change: So a second so thanks, Amy <unk> in terms of their ability I suspect you mean more longer term I mean, clearly as the only once weekly available therapy. We certainly think that phase III data supports the weekly administration and sort of the pharmacokinetics and pharmacodynamics really lend itself to that once weekly dosing so the data.
Michael Shetzline: It's a once-weekly therapy. I think in terms of longer term, right, the actual ideal goal for most patients is enteral autonomy, where they could come off all parenteral support in that setting. They often would need continued GLP therapy to maintain that intestinal growth. Then from that going forward, it'll be up to them, obviously, and their physician, a caretaker to understand how that long term plays out.
Mike: Speaks for itself in that regard it. So it's at once weekly therapy I think in terms of longer term right. The the actual ideal goal for most patients as antrel autonomy, where they could come off all parental support in that setting. They often would need continued G. L. P. Two therapy to maintain that in.
Michael Shetzline: <unk> growth and then from that going forward it'll be up to them obviously in there.
Michael Shetzline: Physician, a caretaker so I understand how that longterm plays out but the reality is in patients with your Pal who has limited epithelium. They benefit from continued therapy from the G. L. P. Two because as we've seen with other G. L. P. Two therapies when you come off it is we often revert back to a need for parental support.
Michael Shetzline: But the reality is, in patients with short bowel who have limited bowel epithelium, they benefit from continued therapy from the GLP, too, because as we've seen with other GLP-based therapies, when you come off it, we often revert back to a need for parenteral support. And then on the...
Unknown Executive: The ICD-10 codes and our overall sales force, just taking a step back again, our level of access to the major GI practices across the United States is probably unparalleled from our perspective. We've got over 90 sales reps calling on these practices and leading clinicians.
Michael Shetzline: And then on the <unk>.
Michael Shetzline: Question about the I C D 10 codes and our overall sales force just taking a step back again uhm our level of access to the major Gi practices across the United States is probably unparalleled from our perspective, we've got over 90 sales reps calling.
Unknown Executive: Calling on these on these practices and leading Ah conditions.
Unknown Executive: Specifically, with the ICD-10 codes, we're really excited about this development, Amy Li. Amy, I think the big thing for us is that these ICD-10 codes are starting to shed real light on how many patients there actually are. I think you've heard a little bit in some of the things you've hosted yourself about differences in what the estimates are. You know, I think there have been 7,000 or so patients that have already been identified to date through the ICD-10 codes in just a few months.
Unknown Executive: Specific with the I C. D 10 codes, we're really excited about this development honestly Emily <unk> I think the the big thing for US is that these I C. D. 10 codes are starting to <unk> real light on how many patients are actually are I think he heard a little bit in some of the things you posted yourself about differences in what the estimates are you know I think.
Unknown Executive: <unk> 7000, or so patients that have been identified all ready to date through the I C. D 10 codes in just a few months. It just reinforces our estimates as that has more data. It comes to light about how many patients. There are and then I think given our presence across.
Unknown Executive: It just reinforces our estimates as more data comes to light about how many patients there are. And then, I think, given our presence across the United States, I think our ability to capture, share with our best-in-class product, you know, with our, you know, as an overall profile with Apiglutide having once weekly administration demonstrated real efficacy across the both stoma and CIC patient populations, and then now, as you'll see in a few weeks, the safety and tolerability data being equivalent to placebo, I think that is, I think our ability to penetrate that and capture, share to be a billion-dollar brand is in sight.
Unknown Executive: The United States, I think our ability to capture share with our best in class product.
Unknown Executive: It's R. As in overall profile with Africa, having once weekly administration uhm demonstrated real efficacy across the both stole man see I see patient populations and then now as you'll see in a in a few weeks the the safety and Tolerability data being equivalent <unk> I think that is uhm I think are.
Unknown Executive: Ability to penetrate that and capture share to be a billion dollar brand is is an insight.
Unknown Executive: We feel confident about it.
Speaker Change: Great. Thank you so much.
Jason Nicholas Butler: Your next question comes from the line of Jason Butler with Citizens JMP. Your line is open.
Unknown Executive: Your next question comes from the line is Jason <unk> G. M. P. Your line is open.
Unknown Executive: Hey, thanks for taking the questions. The first one is for APRA. Can you maybe talk about the work you're doing pre-commercial to build awareness for the brand and, beyond just obviously, presentation of data, what work you're going to do this year to prepare the market for the drug? And then, on Linz, can you maybe speak to the contribution of the pediatric market to growth this quarter and looking forward in 2020?
Jason Nicholas Butler: Hey, Thanks for taking my questions first one is for apathy maybe talk about the the the work you're doing precommercial to to build awareness as a brand and beyond.
Unknown Executive: Beyond just obviously presentation of data what what work you're gonna get through this year to to prepare the market for the drug and then secondly on Linzess can you maybe speak to the the contribution of the pediatric market too gross.
Unknown Executive: This quarter and looking for and it's around 24.
Unknown Executive: Yeah, so, Tom, why don't you handle the first one, and then maybe I'll take the second part of the question, if that works. I mean, remind me what the first question was.
Unknown Executive:
Speaker Change: Yeah. So how much you would handle the first one and then maybe I'll take the second part of the question is that works I mean, <unk> remind me. The first question was the brand.
Unknown Executive: The brand awareness, and the activities. Oh, sure. So, as far as the pre-launch activities go, you know, we are just in the midst of launching a disease education program targeted primarily at the GI community, which, you know, will probably stretch into, you know, a digital platform for patients and for patients to, you know, seek better understanding and options. So, this is really about increasing the awareness of who these patients are, how debilitating this disease is, and, you know, the need for more effective therapy.
Unknown Executive: Brand awareness of the activity.
Unknown Executive: So as far as as far as a pre launch activities. We are just in the midst of launching a disease education program targeted primarily on the Gi community, which will will probably stretch into it.
Unknown Executive: Digital platform for patience for patients to seek better understanding and options. So this is really about increasing the awareness of who these patients are how debilitating this diseases and you know the need for more effective therapy and through that exercise a big objected.
Unknown Executive: And through that exercise, a big objective here, as far as overall impact on performance, is identifying available patients within these large GI practices, as well as academic centers of excellence. You know, we're very, very encouraged by the feedback that we're getting from, you know, the key opinion leaders in the center of excellence, as far as the response rate and the acceptance of Pregnantide in the clinical trials, and they're all looking forward to working in a very collaborative way, not just as far as educating people, but also how do we really work with the patients to help them through the process to get better care.
Unknown Executive: Here as far as overall impact on performance is identifying available patients within these large gi practices as well as the academic centers of excellence, we've been very very encouraged by the feedback that we're getting from you know the key opinion leaders in the center of excellence as far as the response rate and the <unk>.
Unknown Executive: <unk> of privatized in the clinical trials and they're all looking forward to working in a very collaborative already not just as far as educating people, but also how do we really work with the patience to help them through the process to get better care. So we're we're very well position.
Unknown Executive: So, we're, I think we're very well positioned to prepare our go-to-market strategy, and, of course, that work has been ongoing, and we're just in the early stages of implementing the disease awareness program. Would you like to take the Lincess question? Yeah, I'll hopefully do that.
Unknown Executive: <unk> to prepare our go to market strategy and of course that work has been ongoing and we're just in the early stages of implementing the disease awareness program.
Speaker Change: You can take the Windsor Court hopefully do that so Jason good morning. So I think on your question about the pediatric launch in its progress I think we are <unk> I think overall I think uhm so launches started.
Unknown Executive: So, Jason, good morning. So I think on your question about the pediatric launch and its progress, I think we are purely, I think, overall, I think, since the launch has started, still really positive about the pediatric indication. We're still early in the launch, frankly, but to date, we're really encouraged by the strong new-to-brand prescription volume growth. I think Tom mentioned earlier on the call that 18% of new-to-brand growth, and specifically, a large portion of that growth on a year-over-year basis is in the 72 microgram dose, which is the approved dose for the 6 to 17-year-old patient group, so it's embedded in those numbers, and I think it's part of what's sustaining our long-term growth here but for Linz as we're
Unknown Executive: Positive about pediatric indications, we're still early in the launch frankly, uhm, but to date were really encouraged by the strong new to brand prescription volume growth I think I think Tom mentioned earlier on the call that 18 per cent new to brand gross mm. That's specifically a large portion of that growth year over year basis as in.
Unknown Executive: The 72, microgram dose, which is D prove dose for the six to 17 year old Asian groups. So it's embedded in those numbers and I think it's part of what's sustaining or a longterm growth ear, but.
Unknown Executive: Orleans us.
Unknown Executive: As we are in your 12th.
Mohit Bansal: Your next question comes from the line of Mohit Bansal with Wells Fargo.
Speaker Change: Your next question comes from the line of <unk> Wells Fargo.
Unknown Executive: Great, thank you very much for taking my question. I have a couple of questions. So one on the guidance again. Thanks for clarifying, but one thing I wanted to ask was that typically this happens because you have a particular mix in your mind for government versus commercial and that exchange subsequently because you don't know it until now. And the second question is about ALP with CNP-104. So if I look at drugs like Celdalpar, there was an impact on ALP with CNP-104 by month one, and then at month three, it was more like stabilized after that. So isn't 120 days enough to see benefit? I appreciate that the mechanisms are different, but so how should we think about benefit on endpoints like ASB there?
Mohit Bansal: Great. Thank you very much for taking my question I have a couple of questions on one of the guidance again.
Unknown Executive: Sure.
Unknown Executive: Thanks for clarification, but one thing I wanted to ask was that typically.
Unknown Executive: Happens because you're you're <unk>.
Unknown Executive: <unk> you had a particular mix in the mind for government versus commercial and that change subs.
Unknown Executive: Secretly because you don't know it until you get the receipts and I'll.
Unknown Executive: Are you expecting similar mix.
Unknown Executive: The updated Miss for 2024, as well I'm asking because <unk>. The fact that you are morning is limited.
Unknown Executive: So that's the first question.
Unknown Executive: And the second question is on <unk> 104, so if I look at <unk>.
Unknown Executive: And in fact L b.
Unknown Executive: Five months and then at monthly, but more like stabilize after that it was not.
Unknown Executive: Mentally impact so he's the 120 day enough to see benefit I I. Appreciate the mechanisms that are different so how should we think about benefit on.
Speaker Change: I'll be there.
Unknown Executive: You know, Mike, why don't you go first, and then I'll answer the guys. Yeah, thanks.
Speaker Change: Thank you.
Speaker Change: Yeah. My point, you go first and I'll answer the guns, yeah. Thanks for <unk>. It's a good question because as you know the regulatory like precedent is around our class. That's clearly what <unk> based on through right now so it. It clearly is an approved path for accelerated approval, which is which is not full approval you made out.
Michael Shetzline: Yeah, thanks, Reed. It's a good question because, as you know, the regulatory precedent is around ALCFAS. That's clearly how Betacolic Acid got approved, and with Simabase going through right now. So it clearly is an approved path for accelerated approval, which is not full approval.
Michael Shetzline: You may know Simabase actually added Puritis to that to sort of help balance that need, a non-specific sort of effect on liver function in a lot of ways because it really speaks to how the bile's moving through the liver. So it's very important to understand that if you give something like betacolic acid, which is a bile acid mimetic, it actually increases bile flow. One of the early benefits you'll get from this is improved alfalfa.
Michael Shetzline: Somebody's actually added Prewriting and that sort of help balance that that need alpha is a very.
Michael Shetzline: Non specific sort of effect on liver function in a lotta ways because it really speaks to how the Bios moving through the liver. So it's very important to understand that if you give something like a bed of colic acid, which is a bile acids memetic it actually increases by a flow one of the early benefit you'll get from that is.
Michael Shetzline: Is improved alfonse, it's also not necessarily part and parcel that that's a.
Michael Shetzline: It's also not necessarily part and parcel that that's not aligning with liver function improvement. And that's why Obeticolic Acid had to have a post-marketing commitment to show a benefit in liver function brought more broadly with histology, which incidentally did not meet needs at the time. So it is important to understand what ACFAS is there for.
Michael Shetzline: Aligning with liver function improvement and that's why you <unk>. It had to have a postmarketing commitment to show a benefit and liver function brought more broadly with histology, which incidentally did not <unk> needs at at the time. So it is important to understand without fast is therefore, and as you highlighted or mechanism is completely.
Michael Shetzline: And as you highlighted, our mechanism is completely different. We're actually targeting the root cause of PBC, which is T-cell driven bile duct destruction. So we clearly believe if we can affect the T-cells and then reprogram those T-cells so they no longer attack the bile ducts, we'll see clinical improvement. And then, to your point, the timeline for that clinical improvement, we're going to learn. We clearly think we have an opportunity to see it early, given the specificity of PDCE2 and the specificity of this therapy.
Michael Shetzline: Different we're actually targeting the root cause of P. B C, which is the T cell driven bile duct destruction. So we clearly believe if we can affect the T cells, and then reprogram those T cells. So they no longer attack the bile ducts will see clinical improvement and then to your point the timeline for that clinical improvement we're gonna learn.
Michael Shetzline: Clearly think we have an opportunity to see it early given the specificity of P. D. C E. Two and the specificity of this therapy. That's why we have a 120 day look, but we're certainly going to learn from that and that's why we have this combination of of need meaning to demonstrate a T cell response, and the liver function improvement. So certainly the different mechanism is important <unk>.
Michael Shetzline: That's why we have a 120-day look, but we're certainly going to learn from that. And that's why we have this combination of need, meaning to demonstrate a T-cell response and deliver function improvement. So certainly, the different mechanism is important to understand. And also, it's very important to realize that we're actually going for a very disease-modifying approach, not just moving bile flow through the liver better, which is a biomarker for potential benefit in liver disease. Great. Thank God. So...
Michael Shetzline: Stand and also it's very important to realize that we're actually going for a very disease modifying approach not just moving bile flow through the liver better which is a biomarker for potential benefit for liver disease.
Speaker Change: Okay got it so.
Unknown Executive: On your guidance question, look, I think I'll, high level, I'd say again, one, I think from our perspective, and it's the guidance we gave for 2024 counts was the mix we anticipate in 2024. It's our 20204 guidance. We expect to still see high single-digit prescription demand growth, and I think the decline is as stated based on our overall annual guidance. This is a one-time adjustment.
Michael Shetzline: On your guidance question, I think I'll spell high level I'd say again, one I think from our perspective and it's the guidance. We gave for 2024 accounts or the mixed we anticipate in 2024, it sort of 2024 guidance, we expect to still see high single digit prescription demand growth.
Unknown Executive: I think the decline is as stated based on our overall annual guidance. This as a one time adjustment we've been pretty good as a brand over the last several years and and anticipating with our estimates is with respect to what.
Unknown Executive: We've been pretty good as a brand over the last several years and in anticipating or with our estimates with respect to what the mix is in a channel. Channel mix is pretty fluid, and predicting Linsesnet sales can move in a positive or negative direction. This has always been true, but we've been pretty good about it over the years. And I think at this point, we're still expecting to deliver a mid-single-digit decline, as I said before, and that's predominantly driven by the one-time-out-of-period adjustment. Outside of that, I think we would have been in line with guidance.
Unknown Executive: Mix is in a channel channel mix is pretty fluid and predicting witness linzess net sales can move in a positive or negative direction. This has always been true, but we've been pretty good about it over the over the years and I think at this point, we're still expecting to deliver mid single digit decline as I said before and that's predominantly driven by.
Unknown Executive: Hi, the one time out of a period of adjustment outside of that I think we would have been in line with guidance for the full year.
Speaker Change: Got it helpful. Thank you.
Team Chan: Your next question comes from the line of team Chan with capital one.
Unknown Executive: Thanks.
Unknown Executive: You know I was just looking back at the secondary endpoints from this study.
Unknown Executive: You guys plan on showing I guess the.
Unknown Executive: Earlier week data from the C. I C patient population at the DW, especially with the <unk>.
Unknown Executive: Secondary endpoints that you didn't need statistical significance Sir.
Speaker Change: Yeah, Tim if you're referring to sorta, specifically things like enter autonomy or things you might say at 24 weeks versus the key secondary said 48. The answer is yes, and we certainly think that that date of further supports our conviction of.
Unknown Executive: <unk> advocacy in both stoma NCIC patient populations. So yeah, we plan to see that have that I T. T. W. As well as sort of a decrease in parental support a volume in the relative changed from base sign in that capacity as well <unk> That's D. W.
Unknown Executive: Planned oral presentation. So obviously still in development, but we have a lot on on that already and it's it's very data heavy I think you'll be very impressed with the amount of data we're starting to clearly very excited by it because it clearly supports our conviction that the drug is approvable and works in both colon and continuity and stomach patients. So we really are looking forward to sharing that more broadly.
Unknown Executive: With the community.
Speaker Change: Just one follow up you know why why is the placebo effect. So high in these studies cause I noticed on your.
Unknown Executive: Third secondary endpoint you know the placebo rate was almost 44%.
Speaker Change: Can you comment on that.
Speaker Change: Yeah, I mean, I think the key to realize there is that the primary endpoint placebo response was 12.5% right and that's the key driver for the studies positivity statistically in the past two approval. So I think that's L. A T thing to keep aware of the other thing to realize is the 48, we can point never had been tested them in.
Unknown Executive: G. L. P. Two therapy before uhm ended there can be a tendency for placebo response to change during a clinical trial and it's also very important to realize that so what we're actually talking about here placebo response is different at 24 weeks in the primary end point, meaning it's a relative change from baseline versus the one day off which.
Unknown Executive: The third two secondary you alluded to it is 44% and then in addition, we instituted a new design in this trial, which is the winning algorithm. So that's clearly played forward through this study we're gonna analyze that data real cost carefully to make sure we understand it but there is a potential opportunity for the winning algorithm which would.
Unknown Executive: The in place for boats placebo and drug treated patients could elevate the placebo response with later time points and the study because early in the study it might be more volume driven whereas as people win then you may fall under the urine output special a 10 per cent and you make it experts leaning out we're still looking into that but that's clearly one.
Unknown Executive: Thing on the list to to figure out if that's what made the 48, we can point, we'll see what response, so high and one final point to realize even though the placebo response was <unk> was high at the <unk> on the <unk>.
Unknown Executive: I see population.
Unknown Executive: <unk> was still numerically superior so when we get to this sort of aspect of Approvability that fact that <unk> numerically better will be a positive in terms of not looking at it like were worse than placebo or things like that that's not the case and then given the things we talk.
Unknown Executive: About on the primary and the first few secondary being positive and the whole population, we clearly think that bodes well for a high probability of success for approval.
Unknown Executive: For both populations.
Unknown Executive: Okay, maybe just one last thought about my <unk>.
Unknown Executive: Some of these items do you think that you could get them on the label because I think.
Unknown Executive: You know like if those will be important, especially in the corner and continuity patient population.
Unknown Executive: Yeah, I think we're gonna work to get everything in the label. We can we will be certainly thank the drug works very well in both patient populations.
Unknown Executive: One of the reasons. We included those additional secondaries was for exactly that reason however that challenges is higher now obviously, because they didn't need statistical significance, but as I mentioned, both are numerically better. So we certainly have a strong confidence for proof ability.
Speaker Change: Okay, great. Thanks.
Speaker Change: Ladies and gentlemen that completes our county session in today's call. Thank you all for joining you may now disconnect.
Unknown Executive: Got it. Helpful. Thank you.
Unknown Executive: Please wait the conference will begin shortly.
Unknown Executive: [music].
Unknown Executive: