Q1 2024 Krystal Biotech Inc Earnings Call
Thank you for standing by and welcome to Crystal Biotechs first quarter 2024 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. During.
During the question and answer session, there will be a limit of two questions per participants.
Stefan Packets: As a reminder, today's conference is being recorded I would now like to hand, the conference over to your host Stefan packets, Vice President of corporate development. Please begin.
Stefan Packets: Chris Good morning, and thank you all for joining today's call.
Earlier today, we released our financial results for the first quarter of 2024.
Stefan Packets: The press release is available on our website at Www Crystal bio Dot com.
Stefan Packets: <unk> filed our earnings 8-K and 10.
Stefan Packets: In Q with the SEC earlier today.
Chris: Joining me today will be Krish, Krishnan, Chairman and Chief Executive Officer.
Chris: Similar Krishnan President of research and development.
Chris: Jennifer Mcdonough.
Chris: Senior Vice president efficient access analytics and operations.
Chris: Christine Wilson.
Chris: On your Vice President and head of U S sales and marketing and <unk>.
Chris: Romano Chief Accounting officer.
Chris: This conference call will and our responses to questions may contain forward looking statements.
Chris: You are cautioned not to rely on these forward looking statements, which are based on current expectations using information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected.
Chris: A description of these risks uncertainties and other factors can be found in our SEC filings.
Chris: With that I will turn the call over to Chris.
Chris: Thank you Stefan.
Chris: And thank you all for joining <unk> conference call.
Chris: I'm pleased to say that the momentum in 2023 <unk>.
Chris: Continues with the strong start to 2024.
Chris: Driven by excellent execution across all parts of our business.
Chris: Clinical and manufacturing.
Chris: But as you like is reaching more and more patients by the day.
Chris: And is rapidly changing the treatment paradigm for <unk>.
Chris: Patients suffering from this debilitating disease.
Chris: Perfect Epidermolysis below our debt.
Chris: Increasingly that patients are able to benefit from the durable wound healing afforded by by July.
Chris: Fundamental genetic correction.
Chris: And also the convenience of being administered at home is a topical gel.
Chris: As real world experiences with adviser grows it.
Chris: Has it been immensely rewarding to hear and see the improvements that patients have made while on therapy.
Chris: As you will hear this morning.
Chris: Our U S. Commercial launch continues to progress very well driven by robust demand rapid growth and reimbursement approvals and high patient compliance.
Chris: We're also moving quickly towards launching <unk> outside of the U S.
Chris: We recently successfully completed the efficacy portion of our open label extension study in Japan, putting us on track to file with the Japanese regulators before year end.
Chris: This will be our second <unk>.
Chris: Ex U S filing after submitting to the EMEA last year.
Chris: Global infrastructure Buildout is underway.
Chris: In anticipation of commercial launches.
Chris: In both Japan, and Europe next year.
Chris: At the same time.
Chris: Our building momentum across our clinical pipeline.
Chris: With accelerating enrollment and new trial starts setting.
Setting us up for <unk>.
Chris: Wave of data Readouts.
Chris: Adding later this year.
With the recent initiation of kinase one hour.
Chris: Our study evaluating inhaled <unk> for 707.
Chris: For treatment of solid tumors of the lung.
Chris: We now have five active clinical trials.
Chris: And that points to add a sixth.
<unk> be back in the second half of this year.
Chris: We expect that these studies, which spanned multiple tissues and target both rare and common diseases.
Chris: Showcase the breadth and power of our proprietary <unk> based gene delivery platform.
Chris: We also continue to build out our manufacturing infrastructure and support of global advisor or a commercialization and pipeline expansions, including.
Chris: Including scale up of our current approved manufacturing process.
Chris: Ongoing process improvements.
Chris: And initiation of a tech transfer.
Chris: Of our current.
Chris: Production process to us.
Chris: Later this year to increase basically like the yields and margins.
Chris: Finally, I want to highlight that strong execution in our launch.
Chris: Another possible quarter for Crystal <unk>.
Even while accruing for previously settled litigation payments.
Chris: And excluding litigation payment accruals.
Chris: This quarter would have been 47 per share up sequentially from 31 per share in the last quarter of 2023.
Chris: With a strong balance sheet growing revenues and to commercial scale GMP facilities, we have.
Chris: The resources, we need to execute on our long term growth plans and to continue building shareholder value provided you back and our clinical pipeline.
Chris: Before jumping into our advisor like launch update.
Speaker Change: It's my pleasure to introduce Christine Wilson, and Jennifer Mcdonough two.
Speaker Change: Two senior U S commercial leaders of Crystal or joining me today on the call.
Christine Wilson: Christine recently joined <unk> as senior Vice President and head of U S sales and marketing.
Christine Wilson: She brings over 20 years of experience in specialty and rare disease launches.
Christine Wilson: And as an expert and patient finding having previously launched multiple rare disease products with our community focus including GATX.
Christine Wilson: An ultra rare condition of short bowel syndrome.
Christine Wilson: And more recently for Sperry.
Christine Wilson: For Iga nephropathy.
Christine Wilson: Jennifer Mcdonough.
Senior Vice President of patient access patient services analytics and ops at Crystal.
Jennifer McDonough: And has been instrumental in achieving the broad access and compliance we have today.
Speaker Change: You bet.
Speaker Change: Jennifer has over 25 years' experience in biotech and specialty pharmacy with a focus on rare diseases.
Speaker Change: We are fortunate to have them both on the team.
Speaker Change: Now turning to our results.
Speaker Change: Net voyage.
Revenues for the quarter came in at $45 3 million.
Speaker Change: Looking back over our first three quarters since launch.
Speaker Change: Total net revenues now exceed $95 million keeping.
Speaker Change: Keeping us on pace with the top tier of recent rare disease launches.
Speaker Change: We're especially pleased to be reporting revenue growth Q over Q.
Speaker Change: In spite of the onetime headwinds that we face to start 2024.
Speaker Change: Due to the permanent J code switch.
Speaker Change: Well the permanent J code is a huge tailwind for reimbursement.
Speaker Change: The switch negatively impacted revenues one time in the first quarter.
Speaker Change: In order to ensure continuity of therapy.
Speaker Change: Breached patients with free bottles.
Speaker Change: In total we estimate that approximately 403 vials dispensed in <unk> as a result of onetime disruptions.
Speaker Change: That said.
Speaker Change: The J code issue.
Speaker Change: The declining bridging patients with free drug is resolved.
Speaker Change: And the fundamentals of the launch look very good for the remainder of 2024.
Speaker Change: We are confident in our ability to meet if.
Speaker Change: If not exceed 2024 net revenue projections.
Speaker Change: Pristine and Jennifer will elaborate more in their sections.
Speaker Change: Gross margins of about 95% for the quarter.
Speaker Change: Up two percentage points.
Speaker Change: Over the last quarter.
Speaker Change: We continue to expect margins to be above 90% in the coming quarters.
Speaker Change: Gradually improving to over 95%.
Speaker Change: And a couple of years.
Speaker Change: Gross to net adjustments in the first quarter were 14%.
Speaker Change: In line with the previous quarter.
Speaker Change: Our long term guidance on gross to net is unchanged and.
Speaker Change: And we expect it will settle into the high teens.
Speaker Change: Reflecting a roughly even split up that patients between commercial and government plans.
Speaker Change: Please note.
Speaker Change: The net revenues reported today.
Speaker Change: Also included an accrual for patients on contracted commercial plans, who are projected to potentially hit the cap.
Speaker Change: $900000 gross per patient per calendar year in 2024.
Speaker Change: Overall, I'm really pleased with the growth in the underlying drivers of our commercial launch.
Speaker Change: And we'll now hand, the call over to Jennifer <unk>.
Jennifer McDonough: Additional details on the launch.
Jennifer McDonough: Including recent successes.
Jennifer McDonough: In securing patient access to <unk>.
Jennifer McDonough: Jennifer.
Jennifer McDonough: Thank you Chris.
Moving to slide five it has been exceptionally rewarding to lead patient access and Crystal connect team in support of this transformational product. Okay. Hundreds of U S patients now benefiting from access to my view that we really are changing the treatment paradigm for this terrible disease.
Commercial and Medicaid access continues to improve her guide you that we now have received positive policy decisions for roughly 96% of all covered lives.
Jennifer McDonough: This is up from over 93% last report into the mostly by an additional seven state Medicaid program, including taxes now providing coverage to provide you that following the issuance of the permanent J code earlier this year.
Jennifer McDonough: As we entered the first quarter, we were prepared for the challenges of January insurance application season, and the guide you that permanent J code the authorization process and we are.
Jennifer McDonough: Very proud of the team's success in supporting continuing coverage for existing patients.
Jennifer McDonough: At the same time, new patient conversion continue to congrats Wow.
Jennifer McDonough: April we have secured over 330 patient reimbursement approval.
Jennifer McDonough: We did see a one time impact our overall reimbursement approval in Q1.
Jennifer McDonough: I have a security incident affecting our specialty pharmacy provider, but this has now been resolved.
Jennifer McDonough: This incident is not unique to us and affected many of our other colleagues in the pharmaceutical industry.
Jennifer McDonough: The strong payer access the permanent J code assigned and ongoing operational improvement. The team is laser focused on patient experience and optimizing time to first <unk> application.
Jennifer McDonough: With that conversion times continue to shorten, albeit at a slower pace than we previously expected.
Patients are increasingly identified in the community setting where physicians are a bit less familiar with this traffic E b and the reimbursement process for rare disease medicines.
Jennifer McDonough: Finding that additional support is needed to navigate these patients and their physicians to access.
Jennifer McDonough: This is of course exactly about crystal connect patient services team adult to do and we work as we work through each patient K, we are seeing great results and ultimately authorizations for Baidu that therapy.
Jennifer McDonough: We continue to implement additional agitation and tools to support the process and are still on a trajectory for conversion times to compressed down to under a month later this year.
Jennifer McDonough: With notified you of that reimbursement approvals covering an initial treatment period of six months or more we have still not encountered a large number every authorization.
Same as last quarter, albeit reauthorization to date have been either approved or in process.
Jennifer McDonough: As we move to slide six.
Jennifer McDonough: The split between our debt indeed Ah patients at the reimbursement level is roughly in line with the start from what we reported previously.
Jennifer McDonough: With the steady progression through to conversion.
Jennifer McDonough: Also very happy to report that we are seeing reimbursement approvals across all ages as we continue to communicate to patients physicians and payers all wounds matter and that has an average should aid to change the course of this disease at.
Jennifer McDonough: At the same time. It is also encouraging to see strong uptake in the pediatric segment, we're establishing corrective therapy early has the potential to change the trajectory of these patients' lives.
Jennifer McDonough: Moving to slide seven.
Jennifer McDonough: Moving to the patient experience and compliance we continue to report strong patient preference for at home administration with 97% of the weekly treatments occurring in the patient town.
And even with the increase in both the patient pay average length of therapy. We are pleased to report that compliance to weekly application remains above 90%, particularly when compared against many other chronic therapy with compliance rates often around 50%, which.
Jennifer McDonough: Which we believe is a reflection of the clinical benefit that <unk> is bringing to patients are all on track.
Jennifer McDonough: Although our work is just beginning I'm proud of the progress. Our team has made to date rapidly growing the number of patients accessing hygiene, Zach and one start and ensuring they are able to treat their work can be easily at home.
Jennifer McDonough: I will now hand, it off to Christine to talk about what comes next.
Christine Wilson: That launch Christine.
Christine Wilson: Thank you John.
Christine Wilson: I'm incredibly excited to have joined crystal and to build on the great early momentum we are seeing in the ICU that launch.
Christine Wilson: I know firsthand the challenges that come with launching a rare disease medicine in the community setting.
Christine Wilson: Patients are often diagnosed or lost to follow up.
Christine Wilson: Genetic tests have never been run.
Christine Wilson: Familiarity with innovative therapies and navigating reimbursement as well.
Christine Wilson: And sadly disillusionment with our health care system is all too common.
Christine Wilson: Even if you would expect a patient suffering from a severe disease to proactively seek care.
Christine Wilson: Many of these patients have been disappointed by their treatment options in the past and have disengaged.
Christine Wilson: However, none of these issues are unique and we have at our disposal and extensive toolkit to help find and activate rare disease patients.
Christine Wilson: They are in the U S.
Christine Wilson: We're also starting from a strong position with great early adoption of Iga that giving us plenty of success stories to amplify and disseminate.
Christine Wilson: Today, I would like to touch on some of the key strategic initiatives, which we are pursuing to drive sustained long term growth at <unk> in the U S.
Christine Wilson: Our commercial efforts can be grouped together into three main pillars.
Christine Wilson: The first is data analysis.
Christine Wilson: Analytics hubs includes real time claims alerts to identify potential patients.
Through this data we can quickly deploy our season rare disease sales team, while in parallel engaging hcp's through non personal promotion.
Christine Wilson: The combination of these two activities drives awareness and education about you that to our targeted HCP audience and is already helping to grow our identified patient pool.
Christine Wilson: There are also future opportunities to expand the scope of our analytics work to include tap adjacent claims codes on our path to finding all of that patients across the U S.
Christine Wilson: Importantly, these clean based patient finding efforts are distinct from our sponsor genetic testing program <unk>.
Which has had great uptake in helping clinicians identify previously undiagnosed patients.
Christine Wilson: Education of Hcp's. That's also like key strategic imperatives and is being expanded through peer to peer programs by leading kols in EP as well as early adopters peer to peer educational programs are the most impactful approach, bringing information to new EDI treaters.
Christine Wilson: Early adopters, who did not always practice in nature centers bring unique perspectives relevant for potential community prescribers with over 5000 HCP is now having been reached by the sales team the desire for ongoing education and dialogue amongst the HCP community for better patient outcomes continues to grow.
Christine Wilson: The open label extension study demonstrating long term at safety efficacy and durability of results will be published the second half of this year. These topline results were well received during a late breaker session at the AAD meeting in March the result, solidify <unk> impact on the Deb patient population and further establishes <unk> safety profile.
Christine Wilson: Patient engagement is our third top priority in person and digital programs are providing the patient community and opportunity here, a real broad <unk> experiences from other patients and their caregivers.
Christine Wilson: This is a powerful approach to establishing understanding and confidence in the benefits of <unk> to the patient community.
Christine Wilson: Social media has become a powerful tool in reaching patients, particularly those who may not be engaged with our health care team targeted.
Christine Wilson: Targeted ads has been deployed on the most established social platforms and we are expanding to other social media channels in the second half.
Christine Wilson: An example of one of our social media ads as shown here. This.
Christine Wilson: This approach allows us to engage patients where they're at raises awareness levels and allows them to engage digitally to learn more and seek treatment.
Christine Wilson: Altogether by amplifying initial patient and physician experiences with <unk>, we expect to drive adoption build on a prescriber base that is already in the hundreds and deliver on our mission of reaching as many patients as possible.
Speaker Change: Before handing the call off to assume that for a pipeline update I will also take the opportunity today to highlight a few trends that we are already seeing in the field that we expect will reinforce <unk> leadership position in depth and sustain our launch and the long term.
Speaker Change: First patients are seeing the compounding benefits of practice therapy <unk> as they treat more wins.
Unlike palliative approaches we are able to deliver the collagen seven and a one chain directly and two patient wins and enable durable wound closure.
Speaker Change: As patients treat and close more and more wins, they are increasingly able to get control over their disease.
Speaker Change: Positive patient experiences are building excitement amongst patients and HCP.
Speaker Change: In addition, thanks to the work of Jennifer's team.
Speaker Change: Administration is becoming further entrenched as a standard of care for patients with that.
Speaker Change: Wound care in the home is an established routine for that patients and families.
Speaker Change: <unk> administration with Baidu that integrates into the <unk> and we are seeing the overwhelming majority of patients choose that as part of their improved standard of care.
Speaker Change: Our specialty pharmacy provider and home dosing infrastructure is supporting compliant ongoing patient progress monitoring and integrating into a patient's lifetime treatment approach momentum continues to grow familiarity with <unk> is rapidly increasing and positive patient experiences are expanding utilization inclusive of the <unk> population.
Speaker Change: Altogether, we expect these trends to establish <unk> as the standard of care for that in the years to come.
Assume: Now I will hand, it off to assume ought to share pipeline highlight.
Assume: Thank you Christine.
Assume: Our development team has made great progress to start 2024.
As we work towards our ultimate goal for treating that comprehensively and globally.
Assume: Simultaneously advancing a broader pipeline of free visible genetic medicines for many of the other rare and serious diseases that lack adequate treatment options.
Assume: With respect to our payback development steady progress towards European and Japanese regulatory authorization has us on track for launches in both regions by 2025.
Assume: In Europe Emas review of a marketing authorization application continues.
Assume: In February manufacturing facility inspections were completed and we expect to receive GMP certification in the second half of this year.
Assume: Based on recent discussions we believe.
Assume: Like the FTE is also supportive of home dosing.
Assume: Can you do you expect a decision on our marketing authorization application before the end of the year.
Assume: In Japan, we have now successfully completed the efficacy portion of our open label picking study in Japanese patients.
Assume: They bring us to proceed but the Japanese new drug application, which we expect to file in the second half of the year.
Assume: Having previously received orphan drug designation.
Assume: Japan's pharmaceutical and medical device agency.
Assume: Designation, which confers specific benefits for orphan drug development, including priority review application.
Assume: We remain on a trajectory for both a decision by Japanese authorities as well as launch in 2025.
Assume: With respect to our broader clinical pipeline there were two major themes in the first quarter expansion and acceleration.
Assume: With an expanding pipeline and accelerating enrollment we are setting up for a number of exciting data readouts. Starting later this year.
Assume: Our oncology program <unk> 707 has been progressing rapidly to start 2024.
Assume: Recall that <unk> 707 is a modified HSV one vector designed to deliver genes encoding both IL 12, and IL two to the tumor microenvironment and promote systemic immune mediated tumor clearance.
Assume: We have two formulations of <unk> 707 in development.
Assume: What formulation for intra tumoral injection, and an inhaled formulation from <unk> and lung delivery.
Assume: Our phase one study to evaluate into tumor can be 707 monotherapy is moving ahead well.
Assume: Since dosing our first patient in October of last year. We now have cleared the first two dose levels in our study and completed enrollment in the third.
Assume: K B 707 has so far been generally well tolerated across a diverse population that includes patients with sarcomas colon breast and cutaneous cancers.
Assume: No patient as experience dose limiting toxicities or drug related gray.
Assume: Great.
Assume: Greater adverse events.
Assume: Based on the current pace of enrollment, we expect to be able to report interim data before the end of this year.
Assume: We also recently dosed the first patient in our inhaled <unk> 707 phase one study <unk> one an open label multicenter dose escalation and expansion study evaluating inhaled <unk> 707 monotherapy in patients with advanced <unk>.
Assume: Solid tumor malignancies affecting the lungs.
Assume: This is another exciting milestone as we look to extend the clinical utility of cytokine therapy and make a new class of medicines to treat a wide range of otherwise difficult to treat solid tumors.
Assume: It is also gratifying to report that both inter tumor load and email formulations of <unk> 77, and have now received fast track designation by the F. D. A.
Assume: After Emil can be $7 seven was granted fast track earlier this year for treatment of patients with solid tumors.
Assume: With pulmonary metastasis that are relapsed or refractory to standard of care therapy.
Turning to our respiratory program. We are pleased to report a pick up in enrollment here as well.
On <unk> $4 seven or <unk>.
<unk> in the health gene therapy for the treatment of cystic fibrosis.
Assume: We have now completed dosing in cohort two the coral one study are on track to start dosing in the third and final cohort later this quarter.
Assume: Call. It difficult hook is schedule to include bronchoscopy that'll allow for evaluation of airway epithelial cell transduction and expression of CFT, our transcript and protein.
Assume: Cohort three also includes minimum enrollment thresholds for patients that are not eligible for modulators and important patient population for which no effective disease morning flying therapies exist.
Assume: Okay before eight a reversible inhibitor therapy for Alpha one antitrypsin deficiency, we dose the first patient in a serpentine one study in February of this year.
Assume: So from day, one is the phase one open label single dose escalation study in adult patients with TD to allow assessment of safety Tolerability Alpha one antitrypsin levels and key Pharmacodynamic biomarkers.
Assume: Strong support from the Alpha one research community. We are on track for an interim data readout before the end of 2024.
Assume: Our development activities in ophthalmology are also ramping up.
Assume: Working towards our goal of treating depth comprehensively.
Assume: In February we disclosed that we had reached alignment with the FDA on single arm Open label study enable approval of Vivek eye drops for the treatment of lesions in the eye of the patients.
Assume: We have since initiated clinical operations to enable a study start in the second half of the year.
Assume: And finally, we look forward to reporting results from cohort three and four.
Assume: Of our <unk> 301 phase one study later this year.
Assume: Both cohorts are running concurrently to evaluate <unk> 301, and two potential target indications.
Assume: Improvement of the lateral canthal lines at rest and improvement of dynamic wrinkles of the deck with des.
Assume: Following readouts from cohort three and four we expect to select a single indication.
Assume: For phase two development.
Assume: Our HSV one.
Assume: <unk> has the potential to yield a large number of highly differentiated reversible gene therapies.
Assume: We look forward to making continued progress in 2024 and sharing data updates on our clinical pipeline later this year.
Assume: With this I would like to turn the call to Kate.
Kate: Thank you Soma.
Kate: We ended the first quarter with $359 million in cash on hand, and $622 $3 million in total cash and investments an increase over year end cash and investments of about $28 1 million.
Kate: <unk> net product revenue for the quarter was $45 $3 million.
Kate: <unk> was approved by the FDA in May of 2023, there was no comparative period revenue.
Kate: Cost of goods sold was $2 4 million for the quarter or about 5% of net product revenue.
Kate: Gross margin 95%.
Kate: In the first quarter of 2023 costs associated with the manufacturing advisor back were Expensed as research and development costs prior to approval and therefore, there are no comparative period costs in the first quarter of 2023.
Kate: Research and development expenses for the quarter were $11 million inclusive of stock based compensation of $1 $9 million compared to $12 $3 million for the prior year's first quarter inclusive of $2 5 million of stock based compensation.
Kate: Lower research and development expenses in the first quarter of 2024 were due to decreased advisor back manufacturing and overhead cost as following FDA approval. Those costs are now recorded as part of our cost of inventory.
Kate: This decrease was partially offset by additional clinical development costs and R&D related depreciation expenses.
Kate: Selling general and administrative expenses for the quarter were $26 $1 million inclusive of stock based compensation of $7 4 million compared to $24 million for the prior year's first quarter inclusive of stock based compensation of $7 $9 million.
Kate: Higher selling general and administrative expenses in the first quarter of 2024 compared to the prior years first quarter were primarily the result of increased selling expenses related to the launch of <unk> in particular, an increase of about $1 $5 million related to the.
Kate: No patient access program related costs that were incurred in light of the J code transition that was previously discussed.
Kate: Other increases included higher professional services payroll and other administrative costs offset by lower marketing related expenses compared to the prior year's first quarter.
Kate: This quarter. We also recorded litigation settlement expense of $12 $5 million due to our anticipation of reaching the first milestone payment in the periphery and settlement at $100 million in net product revenues.
Kate: Our net income for the quarter was $932000, which represented three cents per basic and diluted share.
Kate: We would also like to reiterate our previously issued guidance of between $150 million to $175 million in combined non-GAAP R&D and SG&A costs in 2024.
Kate: As a reminder, this projection excludes an estimate for stock based compensation.
Kate: We continue to expect higher research and development costs relating to our several active pipeline projects and higher selling general and administrative costs relating to the continued launch of <unk> across the United States and our pre commercial activities in Europe and Japan.
Kate: And now I will turn the call back over to Chris.
Chris: Thanks Keith.
If there's one message that I hope you take away from today's call.
Chris: It is our excitement for the path ahead.
Crystal.
Speaker Change: Our U S launch continues to progress very well.
Chris: With high compliance broad access.
Chris: And a growing number of patient conversions.
Chris: Putting us on an excellent trajectory.
Chris: Momentum is also building outside of the U S.
Chris: With the rapid completion of our Japan, or Italy, and soon to be.
Chris: The second regulatory filing and the major ex U S market.
Chris: We look forward to further expanding access device vivek here and abroad.
Chris: All while progressing a deep clinical pipeline.
Chris: Addressing urgent unmet needs.
Chris: In rare and serious diseases.
Speaker Change: Thanks for listening.
Speaker Change: And I'd like to now open the call for Q&A.
Speaker Change: Okay.
Thank you at this time, we will be conducting a question and answer session.
If you have any questions or comments. Please press star one on your phone at this time as a reminder, during the question and answer session. There will be a limit of two questions for participants.
Speaker Change: We ask that while posing your question you. Please pick up your handset if listening on speaker phone to provide optimum sound quality.
Speaker Change: Please hold while we poll for questions.
Speaker Change: And the first question today is coming from Alec Stranahan from Bank of America.
Alec Warren Stranahan: Your line is live.
Alec Warren Stranahan: Hey, guys. Thanks for the questions just two quick ones for me first can you maybe talk about patient compliance that you saw in the quarter.
Alec Warren Stranahan: What's the feedback then from the field on this to date and then I didn't see any mention of new start forms.
Alec Warren Stranahan: But any trends here that you would.
Highlight.
Alec Warren Stranahan: I guess, what else needs to happen to shorten that time to less than a month for conversion.
Alec Warren Stranahan: Thanks, Alex Hey on your question on compliance I'm going to turn it over to Jennifer sure sure. Thanks, Alex So when it comes to compliance we are just thrilled with the patient experience overall patients continue to see the impact of the <unk> and because it does weekly they understand that it's important to keep up with those weeks.
Does is that that's definitely what we're hearing are with that they continue you know the home dosing is important for them.
Jennifer McDonough: But with that in the time on therapy, the our opportunities potentially Miss a week here or there. So overall patients or you know completely I think aligned with the idea that weekly is important that the dosing is important for wound healing, they're thrilled with the outcome that they're receiving what do they do that and we worked with them for flexibility and you know not understanding that.
Jennifer McDonough: <unk> happens and then they may Miss a week or that here or there, but overall compliance has just been stellar.
Jennifer McDonough: Okay.
Jennifer McDonough: Alexander start form question look we stopped.
Jennifer McDonough: Talking about start forms last quarter.
We think reimbursement approvals as a much closer predictor of net revenue than PFS at this stage of the launch, but having said that demand continues to be.
Alexander: Really good.
Alexander: With respect to patients coming on drug and I'll turn it over to Christine to maybe say a sentence or two.
Christine Wilson: Having come into the story over the last couple of months yeah. Thank you crush yes, we continue to be very pleased by the volume of new starts were seeing and we are beginning to see some of that transition from the C O even to the community base, but as that awareness continues to grow the education. The clinical experiences we intend to build on that momentum that we're currently seeing.
Christine Wilson: Okay.
Speaker Change: Great. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you. The next question is coming from Tim Lugo from William Blair.
Tim Your line of life.
Timothy Francis Lugo: Thank you for taking the question.
Timothy Francis Lugo: Chris I believe you mentioned that you were confident in hitting revenue projections in 2024.
Timothy Francis Lugo: Despite you know.
Timothy Francis Lugo: What was a disruption this quarter given the J code switch.
Timothy Francis Lugo: Just talk a bit about I see consensus around 255 million this year.
Timothy Francis Lugo: Something here.
Timothy Francis Lugo: Generally comfortable with.
Timothy Francis Lugo: Look without getting into the specifics of what I.
Timothy Francis Lugo: Think about is what I see the analysts are projecting and the consensus estimate, but it would be average or median.
Timothy Francis Lugo: Realized that <unk> was light on the revenue side, but not on the fundamentals of the commercial launch right when.
Timothy Francis Lugo: When the J code issue surfaced.
Timothy Francis Lugo: Two things happened I think our specialty pharmacy, probably underestimated the time it would take to convert.
We probably.
Timothy Francis Lugo: Assume that that was right, but then the actual issue surfaced.
Timothy Francis Lugo: Because the dosing is that a weekly level. We don't have time to think about what we could have done in the past we had to jump in quickly provide access to <unk> and we ended up.
Timothy Francis Lugo: Spending about 400, <unk> as I mentioned in the call, but by the time, we started to learn to figure it out.
Timothy Francis Lugo: Now to address such an issue either now or in the future. The issue was well behind us. So it was very transitory.
Timothy Francis Lugo: Resulted in about.
Timothy Francis Lugo: 403, vials, which you can imagine it's about 88 slightly north of $8 million of net revenue.
Timothy Francis Lugo: But we were really pleased that we kept the patients on drug and provide continuity without having to slip up on that front, that's more important to us.
Timothy Francis Lugo: Since patient experience is at the forefront of what of this launch.
Timothy Francis Lugo: Before.
Timothy Francis Lugo: Over everything else.
Timothy Francis Lugo: And the story, but but the I'm coming back to your question we feel good about.
Timothy Francis Lugo: Generally.
Timothy Francis Lugo: We think we're going to end up in 2024.
Speaker Change: Understood. Thank you and maybe switching to the pipeline a bit for K before southern.
Speaker Change: Third cohort without to get enrollment can you narrow down when we should expect first data coming out of this study given the first two cohorts are behind US now and is there are there any trends maybe in the second cohort that make you more or less confidence in the program.
Speaker Change: This is Jim I'll take that question I mean again, we are very excited about 47, we are working with two sites because remember we need sites that have the capability to do bronchoscopy. Because this is a procedure that needs a lot of.
Jim: Specific how do you biopsy the patient to make sure we increase the chances of getting the right tissues to show expression. So yes. We are working on that also remember that we are looking at now patients potentially patients that are not on modulators of corrector. So we see I mean, there is no interferon.
Jim: From that so again, it's that kind of population that we're looking for we have identified patients. We are actively working with the sites to get the study up and running.
Jim: Our goal is to try to enroll all of them by the end of the year, we're going to work hard at it I mean again remember we're looking for a specific patient population that is not on modulators of corrector, though.
Jim: I mean again, we are working to get those patients enrolled.
Speaker Change: Alright, Thank you Tim.
Speaker Change: Tim So complete that because what I would say the TVN, we're not guiding we have never guided on CFS, we never know but.
Things are trending in the positive direction.
Speaker Change: Great. Thank you.
Speaker Change: Thank you. The next question is coming from <unk> <unk> from TD Count Redo your line of life.
Speaker Change: Great. Thanks for taking the question I wanted to ask about Europe.
Europe, and Japan, specifically what.
TD Count: You guys are planning on commercial build out for Europe, right now and if you can just give us an update on the M&A and I'm sorry, if I may a process, whether you're past the 180 day questions and whether you anticipate oral arguments there.
Speaker Change: Thanks, Nick.
Speaker Change: Yes.
Speaker Change: Thanks to the commercial side.
Speaker Change: Anticipate our first wants to be Germany.
These are very late this year early next year, depending on when we get approval.
Speaker Change: If you have it to German GM in place with coming from Shire.
Speaker Change: And so we're super excited about the launch in Germany. Meanwhile, we're setting up for named patient sales expanded access whatever and the demand has been really good in Europe.
Speaker Change: In terms of.
Speaker Change: Experience with the drug tied to actual launch and approval.
Speaker Change: Japan is maybe a little bit behind relative to Europe, maybe six months or so we do have a GM in Japan in place in us.
Speaker Change: And I'll now turn it over to <unk> to talk about where we are with respect to timelines and approval in both these countries.
Speaker Change: Thanks, Chris Yes, I mean, we have received the 120 day questions are we are we also have remember we have that scientific discussions to them throughout the process. There was no surprises in the question. We also met with the EMA recently to go over some of the key questions that we needed for the clarification.
Speaker Change: I think the meeting went pretty well you have real clarity on what expectations are and we expect to respond to the L. O Q in the next couple of months and I think the process timeline is on track for an approval at the end of this year.
Speaker Change: So overall, we're very pleased with the process and as you know the inspection was also completed I think we had a very successful inspection.
Speaker Change: And based on the feedback.
Speaker Change: It looks like we should get the GMP certification.
Speaker Change: All of months from now.
Speaker Change: Got it and then and in Japan.
Speaker Change: Again, we have as Chris mentioned, we have completed the.
Speaker Change: The open label Japanese patient population study the data looks very promising we are in the process of.
Writing up the study report we have a meeting scheduled with the BMD did talk about the Japanese NDA and we are on track for filing the Japanese application, we're working with the Seattle the process of converting the European and the U S. BLA to the Japanese NDA has begun and we anticipate filing this application.
Speaker Change: End of this year.
Speaker Change: Got it and then moving back to the U S.
Speaker Change: Can you tell us what is current conversion time to commercial.
Speaker Change: Uh huh.
Speaker Change:
Speaker Change: John you mentioned that it was.
I'm sorry, I think it was Christine you mentioned that it was getting a little longer than expected can you discuss what some of the headwinds to shorten that to the target 30 days has been.
Speaker Change: Yeah.
Speaker Change: Let me start and I'll turn it over to Jen to provide specifics look there are three pieces right.
Speaker Change: The part in the middle of this access once you get access it's about how quickly can you get a nurse into the home that you like and get treatment going.
Before access.
Speaker Change: Is.
Once the Doctor thinks about writing a prescription is the genetic information in place whether you are in the community setting or in a resetting getting all the paperwork and genetic information in place I'll start by saying the access part is fairly quick maybe less than a week. So anytime we're spending as either on the front end depending on the type of that.
Speaker Change: Patient are on the backend where they can't give it as being pretty picky on the nurse that comes home and scheduling of the nurse to come home, but that said.
Speaker Change: In terms of turnaround time, Tim maybe you can weigh in on that and just Chris had explained there there are several dynamics when it comes to getting that patient on their first treatment are working with the payer and submitting those clinical's definitely takes time, you know as we move into the community setting some of those offices or not as you know they don't have the staffing.
Some of that chart work in the lab work is maybe potentially in the center. So that takes some time. So we continue to work our team and we have a great field team is working with the offices supporting provide any education at the payer level. So we expect that to kind of shorten as we continue that education once we submit it to the payer as Chris said.
Speaker Change: That really is a very positive process for the most part our payers are well aligned we have a great policy, we understand what they need to be able to provide the approval. So that kind of turnaround time on determination seems to it seems to be shortening for sure is the payers are much more understanding of what's needed.
Speaker Change: And then the third part is scheduling with the family.
Speaker Change: Part of that of course is getting the nurses, making sure. We have a trained by G back nurse and that we have the schedule and the flexibility that the family needs and that just takes a little bit of time, but once we are the exciting part is once we get a patient on their routines established they they have a great experience and we'll continue to kind of shorten that up we understand.
It needs to be assured as possible, we need to get these patients on therapy as fast as possible and that's our goal.
Speaker Change: Thank you the next.
<unk> Ali: Question is coming from <unk> Ali.
From Stifel Your.
Ali: Your line is live.
Speaker Change: Hi, This is Ben on for Dan can you guys hear me okay.
Speaker Change: Okay.
Ben: Couple of questions first Kristine based on your experience, thus far <unk>, which one of those three priorities and do you find most impactful and onboarding patients and any sense of what kind of growth, we can kind of envision going forward.
Kristine: Yeah. Thanks for the question.
Kristine: So really all three of those pillars continue to be very important to this launch and I find there's some uniqueness certainly.
Kristine: In the debit space, but there's also some consistency that you see in the rare space and so theyre all three of those priorities continue to be important the education of the HCP the patient outreach and activation.
Kristine: So when you take a look across this right where our focus is in the three pillars that we talked about previously and we wanted to make sure that only not only are we educated the hcp's, but there were really working with the patient population to share that education with them to make sure that we're building on the momentum that has been created thus far.
Speaker Change: Okay, and then just one more question for either you or Chris.
Speaker Change: Mentioned about like 5000, Hcp's are aware of <unk>, what's the geographic distribution I'm like what areas are you going to focus on in the rest of 'twenty 'twenty four.
Speaker Change: Yes, I can take that question I mean really what's exciting is that we are starting to identify patients not just in the coes, but outside the community and really we are seeing those patients all across the country.
Speaker Change: Deb population really can set in some more rural locations and it also sets, obviously and that our Coa setting. So that's the exciting I think evolution of this launch that we're really starting to understand that the alerts are helping us with really identify patients across.
Speaker Change: The country, but also across different specialties were starting to see as well.
Excellent. Thank you so much.
Yeah.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: The next question is coming from Andrea <unk> from Goldman Sachs. Andrea Your line is live.
Andrea: Thanks for taking our question Kristian, maybe one for you just as patients have been on commercial drug now for quite a bit of time, just wondering if you could provide an update on what youre hearing on the experience of these patients with respect to wound closure curious if youre starting to hear of any patient starting to come off therapy as everyone's closure do you still believe the induction phase.
Speaker Change: Previously you had projected at two years it is still intact. Thanks, so much.
Kristian: Yeah. So two.
Speaker Change: To start with your last question.
Speaker Change:
Kristian: I think we continue to see a very high level of compliance.
Kristian: Has spend what almost almost almost a year actually August is the first time, a patient got on <unk> in a commercial setting, but compliance tends to be high and we are continuing to say that the injection period, we expect induction to last maybe 15 to 18 months afterwards.
Kristian: You should expect patients to consume less number of miles going forward as the wounds heal.
Kristian: Now look at 91%, 93% on a high over 90% compliant. If you think about 200 to 300 patients on drug on a weekly administration.
Kristian: To get to 91%, we're talking a handful of patients may be missing a week here and there. So for all practical purposes. Most of the patients are still on drug now that had been one or two instances.
Kristian: With dominant patients, where we've actually heard look all the ones appear to be healed, especially in really young patients and calling us to ask hey can you take a pause and resume if you see some kind of disruption in the world.
Kristian: Hasn't happened a lot is this happens with young kids predominantly on dominant D. D E b, but it does have happened.
Speaker Change: Anything else John do you want to add to that question no I think again I think real world experience, we continue to hear very very positive feedback.
Speaker Change: Feedback from patients and pictures that we're seeing from our patients showing the improvement in the skin. The durability of the scan just the skin feeling different all over so that patients are very excited and we're happy that they are where they're at.
Speaker Change: Perfect. So just to confirm that the majority of your patients you are still seeing receive about one mile per week, absolutely, yes, great. Thanks, so much.
Speaker Change: Thank you and once again, please press star one on your phone if you wish to enter the Q&A queue. Today that is star one if you wish to ask a question. The next question is coming from Kevin Clark, Kevin Clark Gartner from Evercore ISI, Kevin Your line is live.
Gavin Clark: Hey, Thanks for taking my questions I have a few so I'll just go one by one first for the reimbursement approvals are all these patients going onto receive paid drug or is there any leakage along the way.
Gavin Clark: Sure so well definitely the majority are going on therapy. We continue to work with those that are you know as we get through the process, but for the most part they're all going on therapy, yes.
Gavin Clark: Okay.
You noted I believe you noted that the change healthcare has resulted in a lower number of reimbursement approvals in the quarter could you help us quantify what that impact is.
Speaker Change: Yeah, I don't I don't have the quantifying it in most part it's floated down a bit and as you if you're aware of that when it came to change some of that claim adjudication and some of the benefit verification had to pause it because our partner relied on change exclusively I think they definitely had a pause there so it's back to <unk>.
Speaker Change: And we're back kind of expediting those approvals as fast as possible Hey, Kevin I would say look if you do track something at reimbursement approvals on a weekly basis.
Speaker Change: The disruption can be quantified as a week to two weeks of disruption.
Speaker Change: Yeah.
Gavin Clark: Okay that helps thanks, and I wanted to just clarify on the compliance metric about 91% that you provided.
Gavin Clark: I think you noted was 91% of patients who are on once weekly therapy as the other 99% are they own less frequent therapy or is there a different group of patients who are kind of discontinued treatment altogether.
Speaker Change: No that measurement is actually compliance to weekly therapy, how many patients received their treatments weekly on it.
Speaker Change: They miss a dose and that would negatively impact it but in general you know 91% of patients receive a weekly and if they miss it does again it it could take it down a bit.
Speaker Change: But does not mean that patients are getting at any alternative way.
Speaker Change: Weekly that's how it's prescribed that's how it does.
Speaker Change: Okay like is there a different group of patients who have discontinued.
Speaker Change: No no.
It's just the balance of ours that just missed a dose.
Got it thanks, so much.
Speaker Change: Thank you and the next question is coming from Yigal <unk> from.
Yigal: <unk> from Citigroup Your line is live.
Yigal: Hi, Chris and team. Thank you for taking my questions.
Just had a question on the ophthalmic study. This small open label study in 10 patients could you just explain at least patients ones that are existing budget limitations.
Yigal: Or could they have been or.
Speaker Change: Use of vis vis an exclusion criteria for those 10 patients and then regarding your inhaled technology I don't think you've talked a lot about.
The delivery system, there could you just explain or using a nebulizer.
Speaker Change: How long is the emulation session per dose.
Speaker Change: Could you just explain a little bit more about the way that's delivered thank you.
Speaker Change: Yes. This is Jim I'll answer the first part of your question.
With regarding to the I, yes.
Jim: A good chunk of the patients that are in our phase III study also has a manifestation of any impact on their eye. They have severe blistering or wounding as a result, they can't open the eye and it's very painful. So we already have a good chunk of patients who know about the study at all actually proactively wanted.
Jim: Enrolling this study so we feel pretty good we should be able to enroll these patients pretty rapidly again as I said as we discussed with the agency, 7% to eight patients small number of patients that we need to show a wound healing compared to their natural history.
Jim: Forward study and we anticipate enrolling.
Jim: The study pretty rapidly because we already know patients that are lining up for this study with regarding to your second question with the installation, yes, it's a standard nebulizer that it's off the shelf that's available.
Jim: <unk> of our product is unlike some of the mrna deliveries because of the nature of the material you'll have the diluted loss for it to go through the mess in our case I mean this is a you can annualize the product in less than 15 minutes.
Jim: It's a pretty rapid fast <unk> time for these patients.
Okay. Thanks, and just one quick follow up on Japan, and Europe, I assume that those approvals would be for the skin application first and then the ophthalmic application later or is there any possibility that the up.
Jim: The data from the ophthalmic products could be included with those of submissions.
Speaker Change: I mean, obviously at the moment, it's all for the skin that sustain but once we complete the U S study. We may use the same strategy to go into these two countries can use to use data to you know to seek approval in those.
Speaker Change: Regions.
Speaker Change: Okay. Thanks.
Speaker Change: Thank you and there were no other questions at this time.
Speaker Change: This does conclude today's conference call at.
Speaker Change: At this time. Thank you all participants for joining the Crystal biotech first quarter 2024 earnings Conference call you may now disconnect.
Speaker Change: Thanks, guys.
Speaker Change: Yeah.