Q2 2024 Theravance Biopharma Inc Earnings Call and Business Update
Unknown Executive: Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma second quarter 2024 conference call. During the presentation, all participants will be in a listen-only mode.
Unknown Executive: A question and answer session will follow the company's formal remarks. To ask a question, please press STAR followed by the digit 11 on your telephone. Again, that's STAR 11 to ask a question.
Speaker Change: Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma second quarter 2024 conference call.
Speaker Change: During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the company's formal remarks. To ask a question, please press star followed by the digit 1 1 on your telephone. Again, that's star 1 1 to ask a question.
Unknown Executive: If listening via webcast, please mute the audio on your webcast device before asking a question over the phone. I will repeat these instructions after management completes their prepared remarks. Also, today's conference is being recorded. And now, I'd like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.
Speaker Change: If listening via webcast, please mute audio on your webcast device before asking a question over the phone. I will repeat these instructions after management completes their prepared remarks. Also, today's conference is being recorded. And now I'd like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.
Rick Winningham: Good afternoon, and welcome to Theravance Biopharma's second quarter 2024 earnings results conference call. Slide two is our forward-looking statement slide, which I would encourage you to read. Our call today will include forward-looking statements involving risks and uncertainties. Information concerning factors that could cause results to differ materially from these forward-looking statements is described further in our filings with the SEC. As you can see on slide three, members of the Theravance leadership team joining me on today's call include Rhonda Farnum, Theravance's Chief Business Officer, Aine Miller, Theravance's Head of Development, and Aziz Sawaf, our Chief Financial Officer.
Rick Winningham: Good afternoon and welcome to Theravance Biopharma's second quarter 2024 earnings results conference call.
Speaker Change: Slide 2 is our Forward-Looking Statements slide, which I would encourage you to read. Our call today will include forward-looking statements involving risks and uncertainties.
Speaker Change: Information concerning factors that could cause results to differ materially from these forward-looking statements is described further in our filings with the SEC.
Speaker Change: As you can see on slide three, members of the Theravance leadership team joining me on today's call include Rhonda Farnum, Theravance's Chief Business Officer, Aine Miller, Theravance's Head of Development, and Aziz Sawaf, our Chief Financial Officer.
Rick Winningham: Turning to slide four, we have a number of updates to cover, which either impacted our quarterly results or tied to future financial and operational guidance. Beginning on the left-hand side of the slide, we reported $54.5 million in net sales for upellery. This reflects another strong quarter of volume growth and demand generation with hospital doses up 43% and overall customer demand up 13% versus the prior year, offset by a reduction in net realized price resulting in net sales decreasing 1% year over year.
Speaker Change: Turning to slide four, we have a number of updates to cover, which either impacted our quarterly results or tie to future financial and operational guidance.
Speaker Change: Beginning on the left-hand side of the slide, we reported $54.5 million in net sales for Upellry.
Speaker Change: This reflects another strong quarter of volume growth and demand generation, with hospital doses up 43% and overall customer demand up 13% versus the prior year.
Speaker Change: offset by a reduction in net realized price, resulting in net sales decreasing 1% year over year.
Rick Winningham: Given the current mix and resulting ASP coupled with the nature of Medicare Part B, where reimbursement limits are set with a two-quarter lag, we are only expecting the lower net price in Q2 to improve slightly during the second half of the year. For 2025 and beyond, we anticipate a more stable pricing environment with continued retail demand growth across all patient fulfillment channels. In line with our prior guidance, Beatrice filed an NDA for Upelri in China in June, which puts us on the path to achieve meaningful economics in that territory. And finally, in July, we were granted a new upellery method of use patent with a 2039 expiration date. And this new patent has been listed in the FDA Orange Book. Moving to Amproloxetine.
Speaker Change: Given the current mix and resulting ASP coupled with the nature of Medicare Part B,
Speaker Change: where reimbursement limits are set with a two-quarter lag. We are only expecting the lower net price in Q2 to improve slightly during the second half of the year.
Speaker Change: For 2025 and beyond, we anticipate a more stable pricing environment with continued upellery demand growth across all patient fulfillment channels.
Speaker Change: In line with our prior guidance, Beatrice filed an NDA for upellery in China in June , which puts us on the path to achieve meaningful economics in that territory.
Speaker Change: And finally, in July , we were granted a new Upelri method-of-use patent with a 2039 expiration date, and this new patent has been listed in the FDA Orange Book.
Rick Winningham: We're today updating when we expect to achieve key milestones in the Pivotal Cypress Study. Anya will provide more details in her portion of today's presentation, but we now expect to enroll the last patient into the open-label portion of the study sometime in mid-2025, where we had previously been guiding the second half of 2024. One of the main reasons for this is longer lead times between initial site engagement and activation, particularly at large U.S. Centers of Excellence, which are core to our strategy of delivering a high-quality result.
Speaker Change: Moving to Amproloxetine. We're today updating when we expect to achieve key milestones in the Pivotal Cypress Study.
Aine Miller: Anya will provide more details in her portion of today's presentation, but we now expect to enroll the last patient into the open-label portion of the study sometime in mid-2025.
Speaker Change: where we had previously been guiding the second half of 2024.
Anya: One of the main reasons for this is longer lead times between initial site engagement and activation, particularly at large U.S. Centers of Excellence, which are core to our strategy of delivering a high-quality result.
Rick Winningham: We have recently brought on a number of larger sites, and our enrollment rate per active site is now at or above our internal projections, which give us confidence in our updated timeline. We expect to report top-line results from Cypress approximately six months after we enrolled the final patient in the open-label portion of the study. Turning to the right side of the slide, we were able to limit cash use in the quarter, finishing the period with $96 million in cash and no debt.
Anya: We have recently brought on a number of larger sites, and our enrollment rate per active site are now at or above our internal projections, which give us confidence in our updated timeline.
Anya: We expect to report top-line results from Cypress approximately six months after we enroll the final patient in the open-label portion of the study.
Anya: Turning to the right hand side of the slide, we were able to limit cash use in the quarter, finishing the period with $96 million in cash and no debt.
Rick Winningham: While our second half financial performance will depend partly on Upellry's performance, we no longer expect to approach non-gap breakeven and instead expect to report losses in the second half of 2024, similar to what we experienced during the first half of the year. We expect cash utilization in the second half of the year to be similar to or slightly above the first half level. Finally, moving to Trilogy, GSK reported another outstanding performance this quarter, with reported sales of up 40%.
Anya: Well, our second half financial performance will depend partly on Upelry's performance.
Anya: We no longer expect to approach non-gap breakeven and instead expect to report losses in the second half of 2024 similar to what we experienced during the first half of the year.
Anya: We expect cash utilization in the second half of the year to be similar to or slightly above first half levels.
Speaker Change: Finally, moving to Trilogy, GSK reported another outstanding performance this quarter, with a reported sales of up 40%.
Rick Winningham: This achievement brings year-to-date sales to $1.8 billion, up 37%, and increases our confidence in achieving the higher $50 million sales milestone for 2024, as well as additional potential milestones in 2025 and 2026. With that, I'll turn it over to Rhonda to cover Upelry's performance in the quarter and our strategy to deliver future growth.
Speaker Change: This achievement brings year-to-date sales to $1.8 billion.
Speaker Change: Up 37% and increases our confidence in achieving the higher $50 million sales milestone for 2024, as well as additional potential milestones in 2025 and 2026.
Rhonda Farnum: With that, I'll turn it over to Rhonda to cover Upelry's performance of the quarter and our strategy to deliver future growth. Rhonda?
Rhonda Farnum: Let's begin the overview on slide six, with a snapshot of the product's net sales performance. As Rick highlighted in his opening comments, we reported total upellery net sales of $54.5 million in the quarter, which represents a 1% decline quarter on quarter and year on year. This result was driven by a lower than anticipated realized net price in the quarter, reflective of the brand's evolved channel mix.
Rhonda Farnum: Thanks, Rick.
Rhonda Farnum: Let's begin the uphelry overview on slide 6.
Rhonda Farnum: with a snapshot of the product's net sales performance. As Rick highlighted in his opening comments, we reported total upellery net sales of 54.5 million in the quarter, which represents a 1% decline quarter on quarter and year on year.
Rhonda Farnum: This result was driven by a lower-than-anticipated realized net price in the quarter reflective of the brand's evolved channel mix.
Rhonda Farnum: As you know, our strategy with Upelri has been to present patients and health care providers with flexibility of choice and fulfillment options that best meet their individual needs. Although we are limited in terms of the detail we can provide today, Beatrice has taken proactive steps during the quarter to reposition Upelri for improved performance across a range of distribution channels over the longer term. While we do not expect to realize the full effect of these improvements on net price for a couple of quarters, given that utility is reimbursed under Medicare Part B, where ASP is updated with a two-quarter lag, we may see modest sequential improvements in price during the remainder of the year.
Speaker Change: As you know, our strategy with Upelri has been to present patients and health care providers with flexibility of choice and fulfillment options that best meet their individual needs.
Speaker Change: Although we are limited in terms of the detail we can provide today, Beatrice has taken proactive steps during the quarter to reposition Utelry for improved performance across a range of distribution channels over the longer term.
Speaker Change: While we do not expect to realize the full effect of these improvements on net price for a couple of quarters, given that utility is reimbursed under Medicare Part B, where ASP is updated with a two-quarter lag, we may see modest sequential improvements in price during the remainder of the year.
Rhonda Farnum: While the second quarter net sales performance is disappointing, we believe that the effect of one factor should not overshadow our continuous success in demand generation and our ability to position uPellary for sustained long-term growth. This quarter, our combined team was able to drive a 13% year-on-year increase in customer demand volume, and we remain confident in Upelri's bright future based on its highly differentiated profile and the strategies we are implementing to drive increased awareness and adoption.
Speaker Change: While the second quarter net sales performance is disappointing, we believe that the effect of one factor should not overshadow our continuous success in demand generation and our ability to position UPell Reforce to sustain long-term growth.
Speaker Change: This quarter, our combined team was able to drive a 13% year-on-year increase in customer demand volume, and we remain confident in Upelri's bright future based on its highly differentiated profile and the strategies we are implementing to drive increased awareness and adoption.
Rhonda Farnum: On slide seven, you can see our strong hospital performance in the quarter. We are quite pleased with not only the growth we delivered but also with the KPIs that tie this performance to potential future growth in our ability to drive outpatient community utilization. Doses shipped during the quarter increased 43% year on year and again reached a new all-time high.
Speaker Change: On slide 7 you can see our strong hospital performance in the quarter. We are quite pleased with not only the growth we delivered but also with the KPIs that tie this performance to potential future growth in our ability to drive outpatient community utilization.
Speaker Change: Doses shipped during the quarter increased 43% year-on-year and again reached a new all-time high.
Rhonda Farnum: We made continued progress in terms of new formulary approval, with our year-to-date performance essentially already on par with the entirety of 2023. In addition, the team continues to focus on the implementation of therapeutic interchange. As you know, therapeutic interchange adoption is core to our commercial strategy and is fundamental not only to increase adoption and volume growth of upillary in the hospital setting but also to contribute to establishing discharge processes that best support patients for continuing use of upillary as they return to the community care setting. Shifting to our market share trends on slide eight.
Speaker Change: We made continued progress in terms of new formulary approval, with our year-to-date performance essentially already on par with the entirety of 2023.
Speaker Change: In addition, the team continues to focus on the implementation of therapeutic interchanges.
Speaker Change: As you know, therapeutic interchange adoption is core to our commercial strategy and is fundamental not only to increase adoption and volume growth of upillary in the hospital setting.
Speaker Change: but also contributing to establishing discharge processes that best support patients for continuing use on upillary as they return to the community care setting.
Rhonda Farnum: I'm pleased to report that our share of the long-acting Neb market once again increased during the quarter in both the hospital and community segments, with our hospital share surpassing 18% and our community share reaching 32%, both new launch to date highs. This performance is consistent with our expectations given the strong momentum we've generated in terms of formulary wins, therapeutic interchange in the hospital setting, coupled with the success of our concomitant therapy messaging strategy in both the hospital and community setting.
Speaker Change: Shifting to our market share trends on slide 8, I'm pleased to report that our share of the long-acting NEM market once again increased during the quarter in both the hospital and community segments.
Speaker Change: with our hospital share surpassing 18% and our community share reaching 32% both new launch-to-date highs.
Speaker Change: This performance is consistent with our expectations given the strong momentum we've generated in terms of formulary wins and therapeutic interchange in the hospital setting, coupled with the success of our concomitant therapy messaging strategy in both the hospital and community settings.
Rhonda Farnum: We are temporarily pausing the provision of our retail script and new to product view given that the prescriptions for a large specialty pharmacy in the mail order channel of the broader retail data have been underreported for the last two quarters.
Speaker Change: We are temporarily pausing the provision of our retail script and new to product view given that the prescriptions for a large specialty pharmacy and the mail order channel of the broader retail data have been under reported for the last two quarters.
Rhonda Farnum: Subsequent to the February change, healthcare cyber, and In fact, we have, If we simply remove the under-recorded mail order volume from the retail view, we did see another launch-to-date high in Q2. Additionally, we do have access to the individual pharmacy stream that was impacted, which confirms the strong demand trends and the volume growth we are experiencing with Upelri. On slide 9, I think it's important to revisit the roadmap for 2023 and the substantial long-term growth opportunity that remains for you, Pelri.
Speaker Change: Subsequent to the February change healthcare cyber incident.
Speaker Change: In fact, if we simply remove the under-reported mail order volume from the retail view, we did see another launch-to-date high in Q2.
Speaker Change: We do have access to the individual pharmacy stream that was impacted, which confirms the strong demand trends and the volume growth we are experiencing with upholery.
Speaker Change: On slide 9, I think it's important to revisit the road map from 2023 and the substantial long-term growth opportunity that remains for UPELRE.
Rhonda Farnum: As we've previously discussed, we estimate that there are approximately 200,000 patients receiving LABAs as maintenance therapy and that this population is central to our concomitant therapy messaging strategy. Our internal metrics demonstrate that we are improving the ratio of lava used to upelra use in the hospital setting. Since initiating the strategy, we have seen the ratio of lava to llama use improve from 5 to 1 now to 3 to 1, as of Q2 2024, with the goal of getting as close to 2 to 1 or 50% of NEB lava volume as possible.
Speaker Change: As we've previously discussed, we estimate that there are approximately 200,000 patients receiving LABAs as maintenance therapy, and that this population is central to our concomitant therapy messaging strategy.
Speaker Change: Our internal metrics demonstrate that we are improving the ratio of lava use to upelra use in the hospital setting.
Speaker Change: Since initiating this strategy, we have seen the ratio of lava to llama use improve from 5 to 1 now to 3 to 1 as of Q2 2024, with the goal of getting as close to 2 to 1 or 50% of NEV lava volume as possible.
Rhonda Farnum: This metric, in addition to our growing long-acting NEM market share in both the hospital and community, suggests that our strategy is working to continue increasing the e-power patient population. Beyond this, we continue to design and implement tactics that can tap into the next 200,000 patients inappropriately using short-acting nebulized bronchodilators as maintenance treatments. These are patients who are accustomed to nebulized delivery but nevertheless choose to administer a short-acting nebulized agent four to six times daily in the absence of clinical evidence supporting their use as maintenance.
Speaker Change: This metric, in addition to our growing long-acting NEM market share in both the hospital and community, suggests that our strategy is working to continue increasing the upowery patient population.
Speaker Change: Beyond this, we continue to design and implement tactics that can tap into the next 200,000 patients inappropriately using short-acting nebulized bronchodilators as maintenance treatment.
Speaker Change: These are patients who are accustomed to nebulized delivery, but nevertheless choose to administer a short-acting nebulized agent four to six times daily in the absence of clinical evidence supporting their use as maintenance.
Rhonda Farnum: As a once-daily nebulized llama with strong bronchodilation effects over a full 24-hour dosing interval, we expect to be able to make significant inroads into this additional patient segment opportunity. As was highlighted before, there remains a large opportunity among patients who struggle with handheld devices. Over time and with education, particularly associated with the ease and benefits of nebulized therapy administration, we expect to be able to continue to grow upillary within this population as well. Moving to slide 10.
Speaker Change: As a once-daily nebulized llama with strong bronchodilation effects over a full 24-hour dosing interval, we expect to be able to make significant inroads into this additional patient segment opportunity.
Speaker Change: As we've highlighted before, there remains a large opportunity among patients who struggle with handheld devices.
Speaker Change: Over time and with education, particularly associated with the ease and benefits of a nebulized therapy administration, we expect to be able to continue to grow uphelry within this population as well.
Rhonda Farnum: I'll share some information relevant to the significant commercial opportunity that exists for upellery in China, which is an important market for respiratory medications and pharmaceuticals overall. According to IQVIA data, China is the second largest market globally, with spending approaching one quarter that of the U.S. COPD represents a significant health problem in the country, affecting nearly 100 million individuals, with nearly half of those experiencing moderate to severe disease. China has been modernizing its regulatory framework. From the end of 2022 through May 2024, the review time for NDAs and BLAs in China ranged from six months to over 24 months, with a median of approximately 15 months.
Speaker Change: Moving to slide 10.
Speaker Change: I'll share some information relevant to the significant commercial opportunity that exists for upellery in China.
Speaker Change: which is an important market for respiratory medications and pharmaceuticals overall.
Speaker Change: According to IQVIA data, China is the second largest market globally with spending approaching one quarter that of the U.S.
Speaker Change: COPD represents a significant health problem in the territory affecting nearly a hundred million individuals with nearly half of those experiencing moderate to severe disease.
Speaker Change: China has been modernizing its regulatory framework. From the end of 2022 through May 2024, the review time for NDAs and BLAs in China ranged from six months to over 24 months with a median of approximately 15 months.
Rhonda Farnum: We are fortunate to have a strong partner in Viatris in China, which ranks as the country's eighth largest multinational pharmaceutical company with strong government and regulatory affairs capabilities, as well as a field force of over 4000 sales representatives. We are very excited about UPowery's potential introduction and note that the economics to Theravance are substantial, with up to $45 million in regulatory and sales milestones, plus upwardly tiered royalties ranging from 14 to 20% of net sales. Finally, I'll wrap up my comments on slide 11.
Speaker Change: We are fortunate to have a strong partner in Viatris in China, which ranks as the country's eighth largest multinational pharmaceutical company with strong government and regulatory affairs capabilities as well as a field force of over 4,000 sales representatives.
Speaker Change: We are very excited for UPowery's potential introduction, and note that the economics to Theravance are substantial, with up to $45 million in regulatory and sales milestones plus upwardly tiered royalties ranging from 14% to 20% of net sales.
Anya: First, upelri is a unique medicine offering a substantial and highly differentiated value proposition. It is the only nebulized llama for COPD maintenance treatment in the US, and we believe it is underutilized within the patient population to which it is best suited. We see long-term growth potential for the product, driving considerable value for Theravance shareholders. Second, in addition to our co-promotion economics in the U.S., we potentially stand to achieve milestones and royalties as outlined here, which include those I referenced in the previous slide associated with the potential new opportunity in China. With that, I will hand it over to Anya to address further details on the progress of the Amphiloxetine program. Anya?
Speaker Change: Finally, I'll wrap my comments on slide 11.
Speaker Change: First, upelri is a unique medicine offering a substantial and highly differentiated value proposition.
Speaker Change: It is the only nebulized llama for COPD maintenance treatment in the U.S., and we believe it is underutilized within the patient population to which it is best suited. We see long-term growth potential for the product, driving considerable value for Theravance shareholders.
Speaker Change: Second, in addition to our co-promotion economics in the U.S., we potentially stand to achieve milestones and royalties as outlined here, which include those I referenced in the previous slide associated with the potential new opportunity in China.
Speaker Change: With that, I will hand it over to Anya to address further details on the progress of the Amphyloxetine Program. Anya?
Anya: I'll begin on slide 13 with a quick recap of our approach to Cyprus. As many of you know, we met with the FDA in June 2022 and aligned with the agency around conducting a small randomized withdrawal study in MSA patients in order to confirm the durable benefits we saw in study 170 and meet the FDA's requirement for full approval. Randomized withdrawal designs are a well-established method for demonstrating durable efficacy without exposing patients to on-due time on placebo and are often used when the endpoint is a patient-reported outcome, as is the case with the OHSA composite score.
Anya: Thanks, Rhonda.
Anya: I'll begin on slide 13 with a quick recap of our approach to Cyprus.
Anya: As many of you know, we met with the FDA in June 2022 and aligned with the agency around conducting a small randomized withdrawal study in MSA patients in order to confirm the durable benefits we saw in Study 170 and meet the FDA's requirement for a full approval.
Anya: Random Isle's withdrawal designs are a well-established method for demonstrating durable efficacy without exposing patients to on-due time on placebo, and are often used when the endpoint is a patient-reported outcome, as is the case with the OHSA composite score.
Anya: We knew that identifying the right sites in order to recruit the right patients would be crucial to Cyprus's potential success. For a rare and clinically complex disease like MSA, where making a differential diagnosis and addressing patient needs can be challenging, identifying experts and training study personnel is of utmost importance. We therefore are prioritizing working with academic institutions and MSA centers of excellence to deliver a high-quality result. These sites are best equipped not only to identify the most appropriate patients for the study but also to manage their experience in a way that has positioned Cypress for success. We also made a strategic decision to manage the CIPR study ourselves, given our substantial experience working with dysautonomia specialists, advocacy groups, and other members of the broader MSA community.
Anya: We knew that identifying the right sites in order to recruit the right patients would be crucial to Cyprus's potential success.
Anya: For a rare and clinically complex disease like MSA, where making a differential diagnosis and addressing patient needs can be challenging, identifying experts and training study personnel is of utmost importance.
Anya: We therefore are prioritising working with academic institutions and MSA centres of excellence to deliver a high quality result.
Anya: These sites are best equipped not only to identify the most appropriate patients for the study, but also to manage their experience in a way that has positioned Cypress for success.
Anya: We also made a strategic decision to manage the CIPR study ourselves, given our substantial experience working with dysautonomia specialists, advocacy groups, and other members of the broader MSA community.
Anya: In doing so, we have strengthened relationships with decision makers, deepened our understanding of the unmet need, and informed our go-to market model with direct insights regarding how best to reach and engage patients in care. While we have encountered longer timelines for site activations, as I'll cover shortly, we remain confident that our decision positions us for a high-quality study outcome and a differentiated message to support strong market access should Cyprus read out as we hope and anticipate.
Anya: In doing so, we have strengthened relationships with decision makers, deepened our understanding of the unmet need, and informed our go-to market model with direct insights regarding how best to reach and engage patients and caregivers.
Anya: While we have encountered longer timelines to site activations, as I'll cover shortly, we remain confident that our decision positions us for a high-quality study outcome and a differentiated message to support strong market access should Cyprus read out as we hope and anticipate.
Anya: Next, on slide 14, I'd like to walk through the updated timing for achieving important milestones in Cyprus and some of the factors that have led us to adjust the date at which we now expect to enroll the last patient into the open label portion of the study to mid 2025. As we first reported in our Q1 2023 earnings call, Cypress recruitment officially opened at the end of March 2023, with the first patients enrolled in June of last year.
Anya: Next on slide 14, I'd like to walk through the updated timing for achieving important milestones in the Cyprus study and some of the factors that have led us to adjust the date at which we now expect to enroll the last patient into the open label portion of the study to mid 2025.
Anya: As we first reported in our Q1 2023 earnings call, Cypress recruitment officially opened at the end of March 2023, with the first patients enrolled in June of last year.
Anya: While we opened a number of centers early on, we encountered difficulty ramping up slide activation, primarily due to longer than anticipated contract completion timelines at the larger academic centers, for which we anticipate a significant contribution to patient recruitment. We also knew that we would be working with a new centralised EU clinical trial application process that allowed for a substantial number of countries to secure regulatory and ethics approval in parallel, but which demanded a greater investment in time and resources for growth. As highlighted on the left-hand side of this slide, these factors impacted our ability to achieve a significant number of plant site activations.
Anya: While we opened a number of centres early on, we encountered difficulty ramping site activation.
Anya: Primarily due to longer than anticipated contract completion timelines at the larger academic centres, for which we anticipate a significant contribution to patient recruitment.
Anya: We also knew that we would be working with a new centralised EU clinical trial application process, which allowed for a substantial number of countries to secure regulatory and ethics approval in parallel, but which demanded a greater investment in time and resources up front.
Anya: As highlighted on the left-hand side of this slide, these factors impacted our ability to achieve a significant number of plant site activations.
Anya: We have been responding real time to the evolving site activation and enrollment dynamics of the study, and while these measures have been positive, we are no longer confident that they are sufficient to return us to our original enrollment forecast, which is why we are updating our projections today. In recent months, however, with over 80% of our plan sites now activated, we have been experiencing strong enrollment metrics. The majority of activated sites have screened patients, many have already enrolled patients, and our monthly cadence of patients enrolled into Cypress is robust. We also have a small number of remaining academic centers that will activate in the coming months, which are located in areas with high numbers of MSA referrals.
Anya: We have been responding real-time to the evolving site activation and enrolment dynamics of the study, and while these measures have been positive, we are no longer confident that they are sufficient to return us to our original enrolment forecast, which is why we are updating our projections today.
Anya: In recent months, however, with over 80% of our planned sites now activated, we are experiencing strong enrollment metrics. The majority of activated sites have screened patients, many have already enrolled patients, and our monthly cadence of patients enrolled into Cypress is robust.
Anya: We also have a small number of remaining academic centres that will activate in the coming months, which are located in areas of high numbers of MSA referrals.
Anya: Overall, where we had previously expected to enroll the last patient into the open label portion of the study in the second half of this year, we now believe that this milestone will most likely occur in mid-2025. We believe we'll be in a position to report top-line data approximately six months after having enrolled the last patient into the open label portion of the study. Finally, turning to slide 15, I'll add a few comments on the importance of the Cypress study design.
Anya: Overall, where we had previously expected to enroll the last patient into the open-label portion of the study in the second half of this year, we now believe that this milestone will most likely occur in mid-2025. We believe we'll be in a position to report top-line data approximately six months after having enrolled the last patient into the open-label portion of the study.
Anya: Finally, turning to slide 15, I'll add a few comments on the importance of the Cypress study design. Beginning with the primary endpoint, we designed and powered Cypress to demonstrate a durable, clinically important benefit with high probability.
Anya: Beginning with the primary endpoint, we designed and powered Cypress to demonstrate a durable, clinically important benefit with high probability. In doing so, we held many of the design elements constant from Study 170, where we achieved a clinically meaningful 1.6 point benefit on the OHSA composite score in MSA patients. We also sized Cypress appropriately.
Anya: In doing so, we held many of the design elements constant from Study 170, where we achieved a clinically meaningful 1.6 point benefit on the OHSA composite score in MSA patients.
Anya: As a reminder, we achieved nominal significance on the OHSA composite with only 38 evaluable patients in Study 170 and are planning to enroll enough patients in Cypress to evaluate approximately 60 patients using the same composite score as our primary endpoint. However, in order to do so, we need to account for both study design and factors that will impact the number of patients completing all 20 weeks of the study. These include both the enrichment criteria in the 12-week open-label period, which are typical of randomized withdrawal designs and consistent with Study 170, and potential discontinuations given the severity of the disease.
Anya: We also sized Cyprus appropriately. As a reminder, we achieved nominal significance on the OHSA composite with only 38 evaluable patients in Study 170 and are planning to enroll enough patients in Cyprus to evaluate approximately 60 patients using the same composite score as our primary endpoint.
Anya: In order to do so, we need to account for both study design and factors that will impact the number of patients completing all 20 weeks of the study.
Anya: These include both the enrichment criteria in the 12-week open-label period, which are typical of randomised withdrawal designs and consistent with Study 170, and potential discontinuations given the severity of the disease.
Anya: Our current plan is to enroll just over 100 patients into the open-label portion of Cyprus, but the actual number will be driven by our ongoing study experience. Our updated forecast also accounts for the need to ensure we have sufficient patients progressing to the randomized withdrawal portion of the study.
Anya: Our current plan is to enroll just over 100 patients into the open-label portion of Cyprus, but the actual number will be driven by our ongoing study experience. Our updated forecast also accounts for the need to ensure we have sufficient patients progressing to the randomized withdrawal portion of the study.
Anya: Overall, we believe we have designed a study that will support full approval by the FDA and differentiate amperloxidine from pharmacological treatments currently offered to MSA patients suffering from symptomatic NOH if successful. First, Pfeiffer should highlight the broad symptom benefits of amperloxidine in MSA patients. Clinical experts developed the OHSA composite as a measure of global symptom burden, capturing the most frequent debilitating aspects of organ hyperperfusion across the broader patient population.
Anya: Overall, we believe we have designed a study that will support full approval by the FDA and differentiate amperloxidine from pharmacological treatments currently offered to NSA patients suffering from symptomatic NOH if successful.
Speaker Change: First, slipers should highlight the broad symptom benefits of amperloxidine in MSA patients.
Speaker Change: Clinical experts developed the OHSA composite as a measure of global symptom burden, capturing the most frequent debilitating aspects of organ hyperperfusion across the broader patient population.
Anya: At last year's American Autonomic Society Conference, we presented data supporting a one-point change on the OHSA composite as clinically meaningful to patients, which is something that the currently approved therapies have not done. By comparison, our MSA data from Study 170 support Amperloxidine's potential to deliver such a benefit, and Cypress is designed to provide confirmation. Second, the FIPR study is designed to demonstrate amperloxidine's ability to deliver durable clinical benefits. We believe this is supported by its mechanism of action, selectivity for norepinephrine at 10 milligrams, attractive tolerability profile, and convenient once daily dose.
Speaker Change: At last year's American Autonomic Society Conference, we presented data supporting a one-point change on the OHSA composite as clinically meaningful to patients, which is something that the currently approved therapies have not demonstrated.
Speaker Change: By comparison, our MSA data from Study 170 support Amperloxidine's potential to deliver such a benefit and Cypress is designed to provide confirmation.
Speaker Change: Second, the CYPR study is designed to demonstrate amperloxidine's ability to deliver durable clinical benefits. We believe this is supported by its mechanism of action, selectivity for norepinephrine at 10 mg, attractive tolerability profile, and convenient once-daily dosing.
Anya: Third, along with the results from Study 170, a positive cypress outcome would position amperloxidine to be the first therapy with a full approval specifically indicated for NOH patients with MS. Taken collectively, we believe these attributes would make a strong case for amperloxidine's differentiated efficacy when contrasted to the clinical track record and real-world experience of commonly used therapies in this underserved patient population. Unfortunately, none of the drugs currently available for NOH work well in MSA, with 65 remaining symptomatic despite treatment.
Speaker Change: Third, along with the results from Study 170, a positive cypress outcome would position amperloxidine to be the first therapy with a full approval, specifically indicated for NOH patients with MSA.
Speaker Change: Taken collectively, we believe these attributes would make a strong case for amperloxidine's differentiated efficacy when contrasted to the clinical track record and real-world experience of commonly used therapies in this underserved patient population.
Speaker Change: Unfortunately, none of the drugs currently available for NOH work well in MSA, with 65 remaining symptomatic, despite
Anya: So there is an urgent need for an effective treatment that can help these patients, and we believe that amperloxirine is specifically tailored to address NOH in patients with NOH. At this point, I'd like to turn the call over to Aziz to cover our financial results.
Speaker Change: treatment. So there is an urgent need for an effective treatment that can help these patients and we believe that amperloxirine is specifically tailored to address NOH in patients with MSA.
Speaker Change: At this point, I'd like to turn the call over to Aziz to cover our financial results.
Aziz Sawaf: Thanks Anya. Starting off with the results for the quarter, slides 17 and 18 cover the detailed financials. I'll cover the highlights on slide 19. Beginning with collaboration revenue, we reported $14.3 million, representing year-over-year growth of 4%. This was below our internal expectations due to the upholery pricing dynamics described earlier, which impacted net sales. However, while sales decreased versus the prior year, we were still able to deliver collaboration revenue growth by managing expenses to achieve improved profitability.
Aziz Sawaf: Thanks Anya. Starting off with the results for the quarter, slides 17 and 18 cover the detailed financials.
Aziz Sawaf: I'll cover the highlights on slide 19.
Aziz Sawaf: Beginning with collaboration revenue, we reported $14.3 million, representing year-over-year growth of 4%.
Speaker Change: This was below our internal expectations due to the upholstery pricing dynamics described earlier, which impacted net sales. However, while sales decreased versus the prior year, we were still able to deliver collaboration revenue growth by managing expenses to achieve improved profitability.
Aziz Sawaf: Turning to the rest of the P&L, we've reported operating expenses and cash burn metrics in line with our expectation, reflecting slight improvement compared with Q2 of 2023 net of one-time items. During the quarter, we did incur a $3 million non-cash impairment charge due to the write-down in the value of our operating lease assets related to our excess lab space, which we are currently attempting to sublease. The impairment charge is expected to be one-time only unless there are further changes to the leasing marketing condition.
Speaker Change: Turning to the rest of the P&L, we've reported operating expenses and cash burn metrics in line with our expectations, reflecting slight improvement compared with Q2 of 2023 net of one-time items.
Speaker Change: During the quarter, we did incur a $3 million non-cash impairment charge due to the write-down in the value of our operating lease assets related to our excess lab space, which we are currently attempting to sublease.
Speaker Change: The impairment charge is expected to be one time unless there are further changes to the leasing marketing condition.
Aziz Sawaf: We closed the period with 96 million in cash and approximately 49 million shares outstanding. We remain debt free. Turning to our updated financial guidance on slide 20, I'll cover three areas. First, for R&D, we are trending towards the higher end of our guided range of between $30 and $36 million and expect R&D spend to increase in the second half of the year. This is driven by incremental spending associated with the CIPR study, including support for additional high-quality sites to be activated in the second half. We expect that these sites will help contribute towards the completion of enrollment by mid 2025.
Speaker Change: We closed the period with $96 million of cash and approximately 49 million shares outstanding. We remain debt free.
Speaker Change: Turning to our updated financial guidance on slide 20, I'll cover three areas. First, for R&D, we are trending towards the higher end of our guided range, between $30 and $36 million, and expect R&D spend to increase in the second half of the year.
Speaker Change: This is driven by incremental spending associated with the CIPR study, including support for additional high-quality sites to be activated in the second half.
Speaker Change: We expect that these sites will help contribute towards the completion of enrollment by mid-2025.
Aziz Sawaf: For SG&A, we expect to be within our guided range of 45 to 55 million. For non-GAAP earnings and cash burn, we are updating our guidance to reflect the combination of lower-than-expected collaboration revenue due to the near-term utility pricing dynamics described earlier and incremental spend to support the CIPRT study. As a result, we no longer expect to approach breakeven in the second half and now expect non-gap losses and cash burn in the second half to be similar to first half actuals, with cash burn potentially being slightly higher than in the first half of the year.
Speaker Change: For SG&A, we expect to be within our guided range of $45 to $55 million.
Speaker Change: For non-GAAP earnings and cash burn, we are updating our guidance to reflect the combination of lower-than-expected collaboration revenue due to the near-term upellary pricing dynamics described earlier, and incremental spend to support the CIPRT study.
Speaker Change: As a result, we no longer expect to approach break-even in the second half, and now expect non-GAAP losses and cash burn in the second half to be similar to first-half actuals.
Aziz Sawaf: Importantly, this guidance excludes any potential milestone payments that may be earned in 2024 and received in early 2025, for example, the Trilogy milestone. Despite the revision to our near-term financial goals, we remain confident in our capital allocation strategy.
Speaker Change: with cash burn potentially being slightly higher than the first half of the year.
Speaker Change: Importantly, this guidance excludes any potential milestone payments that may be earned in 2024 and received in early 2025, for example, the Trilogy Milestone.
Speaker Change: Despite the revision to our near-term financial goals, we remain confident in our capital allocation strategy. With no debt, limited near-term cash needs, and the potential to achieve several significant milestones in the near term, we are well positioned to continue executing on our plan to maximize shareholder value.
Aziz Sawaf: With no debt, limited near-term cash needs, and the potential to achieve several significant milestones in the near term, we are well positioned to continue executing on our plan to maximize shareholder value. Finally, on slide 21, I'll discuss our potential during the milestones for the trilogy. Q2 net sales grew 40% year-over-year and reached nearly $1.1 billion, beating consensus by approximately 20%. Year-to-date, this brings trilogy sales to $1.8 billion. In 2024, we stand to earn a $25 million milestone payment if sales reach approximately $2.9 billion, and a total of $50 million if sales reach approximately $3.2 billion.
Speaker Change: Finally, on slide 21, I'll discuss our potential during milestones for Trilogy.
Speaker Change: Q2 net sales grew 40% year-over-year and reached nearly $1.1 billion, beating consensus by approximately 20%.
Speaker Change: Year-to-date, this brings trilogy sales to $1.8 billion.
Speaker Change: In 2024, we stand to earn a $25 million milestone payment if sales reach approximately $2.9 billion and a total of $50 million if sales reach approximately $3.2 billion.
Aziz Sawaf: Based on year-to-date results, we are increasingly optimistic that we will achieve at least a lower-end milestone in 2024, if not the full 20. To achieve, excuse me, if not the full 50, to achieve the 50, we estimate that net sales in the second half of the year would need to be around 1.4 billion, a target which looks increasingly attainable given the current trend. Further, in 2025 and 2026, we stand to receive a total of up to another 150 million milestones.
Speaker Change: Based on year-to-date results, we are increasingly optimistic we will achieve at least a lower-end milestone in 2024, if not the full 20.
Speaker Change: To achieve, excuse me, if not the full 50, to achieve the 50, we estimate that net sales in the second half of the year would need to be around 1.4 billion, a target which looks increasingly attainable given the current trend.
Speaker Change: Further, in 2025 and 2026, we stand to receive a total of up to another $150 million of milestones.
Aziz Sawaf: As depicted here, Trilogy's sales trajectory and consensus estimates point to an improving picture, with Bloomberg consensus for the first time ever exceeding the higher end milestone thresholds in 2024, 2025, and 2026. With that, I'll pass it back to Rick to conclude. Rick?
Speaker Change: As depicted here, Trilogy's sales trajectory and consensus estimates point to an improving picture, with Bloomberg consensus for the first time ever exceeding the higher-end milestone thresholds in 2024, 2025, and 2026.
Rick Winningham: Thanks, Aziz. I'll keep my closing comments brief in order to preserve as much time as possible for Q&A. On slide 22, you can see the elements of our company's strategic focus, which remains unchanged. We plan to grow Upelry in the US and see a clear path forward for doing so. Our hospital strategy is an undeniable success, and we see strong support for a concomitant messaging strategy both in the hospital and in the community.
Speaker Change: With that, I'll pass it back to Rick to conclude. Rick?
Rick Winningham: Thanks Aziz. I'll keep my closing comments brief in order to preserve as much time as possible for Q&A.
Rick Winningham: On slide 22, you can see the elements of our company's strategic focus, which remains unchanged.
Speaker Change: We plan to grow Upelry in the U.S. and see a clear path forward for doing so. Our hospital strategy is an undeniable success and we see strong support for a concomitant messaging strategy both in the hospital and in the community.
Rick Winningham: We believe our efforts will translate into considerable value creation over time, potentially including several milestones and important economics in China, which represents another meaningful near-term opportunity. We're executing a well-designed development regulatory strategy in support of amperloxidase and look forward to sharing the results of CIPR. While we now expect it to take slightly longer to do so, we do believe that it's imperative to manage the study with high quality in order to maximize its potential for success.
Speaker Change: We believe our efforts will translate into considerable value creation over time, potentially including several milestones and important economics in China, which represents another meaningful near-term opportunity.
Speaker Change: We are executing a well-designed development regulatory strategy in support of Amproloxide and look forward to sharing the results with Cypress.
Speaker Change: While we now expect it to take slightly longer to do so, we do believe that it's imperative to manage the study with high quality in order to maximize its potential for success.
Rick Winningham: We will continue to adapt our regulatory and commercial preparations in a fashion that utilizes resources judiciously in order to maximize potential returns to our shareholders while minimizing undue financial risk. Finally, we continue to evaluate novel ways in which we can deliver value to shareholders, as we've done historically. With that, we're ready for questions. Operator.
Speaker Change: We will continue to adapt our regulatory and commercial preparations in a fashion that utilizes resources judiciously in order to maximize potential returns to our shareholders while minimizing undue financial risk.
Speaker Change: Finally, we continue to evaluate novel ways in which we can deliver value to shareholders as we've done historically. With that, we're ready for questions. Operator?
Unknown Executive: Thank you, sir. Once again, if you'd like to ask a question, you may do so by pressing star 11 on your answering machine. If listening via webcast, please mute your audio on your webcast device before asking a question over the phone. If you're using a speakerphone for today's call, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star number 11.
Speaker Change: Thank you, sir. Once again, if you'd like to ask a question, you may do so by pressing star 11 on your title phone. If listening via web webcast, please mute your audio on your webcast device before asking a question over the phone.
Unknown Executive: If you'd like to ask a question, and we'll pause for a moment to assemble our roster. And our first question comes from the line of Douglas Tsao from HC Wainwright. Your question, please.
Speaker Change: If you're using a speakerphone for today's call, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star 1-1 if you'd like to ask a question, and we'll pause for a moment to assemble our roster.
Speaker Change: And our first question.
Douglas Tsao: Hi, good afternoon. Thanks for taking your questions. You know, Rick, Rhonda, I'm just curious.
Speaker Change: comes from the line of Douglas Tsao from HC Wainwright. Your question please.
Douglas Howe: Hi, good afternoon. Thanks for taking your questions.
Douglas Tsao: How it seems that they came on sort of so unexpectedly, you know. Was this due to sort of competitive dynamics? And, you know, I think you noted that it will sort of take. I'm curious what sort of specific actions are being taken by you or Viatras to either correct these over time. Thank you.
Douglas Howe: Rick, Rhonda, I'm just curious.
Douglas Tsao: How it seems that they came on sort of so unexpectedly, you know, was this due to sort of competitive dynamics? And, you know, I think you noted that it will sort of take...
Speaker Change: I'm curious what sort of specific actions are being taken by you or Viatras to correct these over time. Thank you.
Rick Winningham: Thanks, Doug. I really appreciate the question. First, just to reiterate, Beatrice manages the pricing and contracting for the brand, so I'm going to be limited in how much detail I can provide.
Speaker Change: Rhonda.
Speaker Change: Thanks, Doug. Really appreciate the question. First, just to reiterate,
Beatrice: Beatrice manages the pricing and contracting for the brand, so I'm going to be limited in how much detail I can provide.
Rick Winningham: And as we've mentioned, the channel mix for the brand has shifted, which has put some pressure on growth to net through the first two quarters of the year. So speaking specifically to Q2 of 2024, some factors led to what we believe were one-time growth to net adjustments. That's where the second half, we would anticipate some slight increase in that price over Q2, depending on the evolving channel mix. And then, if I'm looking to the medium and longer term, Beatrice has taken corrective measures to hopefully change that trajectory of the brand's realized net price, we expect to see more significant pricing improvement in 2025 and beyond.
Beatrice: And as we've mentioned, that the channel mix for the brand has shifted.
Beatrice: which has put some pressure on growth to net through the first two quarters of the year. So, speaking specifically to Q2 of 2024, some factors led to what we believe were one-time growth to net adjustments.
Beatrice: That's where the second half we would anticipate some slight increase in that price over Q2 depending on the evolving channel mix.
Beatrice: And then if I'm looking to the medium and longer term, Beatrice has taken corrective measures to hopefully change that trajectory of the brand's realized net price. We expect to see more significant pricing improvement.
Rick Winningham: But lastly, I just want to flag that given the continued demand growth and slight improvement expected in pricing in the second half, we believe that we would still see an increase in net sales in the second half relative to the Q2 actual. So I hope that helps with your question. Yes, Rhonda, that is helpful.
Beatrice: in 2025 and beyond. Lastly, I just want to flag that given the continued demand growth and slight improvement expected to pricing in the second half,
Beatrice: We believe that we would still see an increase to net sales in the second half relative to the Q2 actual.
Douglas Tsao: Yes, Rhonda, that is helpful, and I guess I'm just curious in terms of if you could provide some details on exactly how the channel mix affects...
Beatrice: So I hope that helps with your question.
Beatrice: Yes, Rhonda, that is helpful, and I guess I'm just curious in terms, if you could provide some details, exactly how the channel mix affects things.
Rhonda Farnum: So again, limited commentary I can provide. But if you think about the channel mix, there is a varied discounting range across the various channels. And that's about all I can say about that.
Beatrice: www.thevenusproject.com
Speaker Change: So again, limited commentary I can provide, but if you think about the channel mix, there is a varied discounting range across the various channels. And that's about all I can say to that.
Douglas Tsao: And so, Rhonda, I guess, just to clarify, so as sort of the hospital channel grows versus the retail channel, I mean, I guess, is that how we should think about it? Just sort of the balance between those two? Or are there other channels that we're not thinking about?
Speaker Change: And so Rhonda, I guess just to clarify, so as sort of the hospital channel grows versus the retail channel, I mean, I guess is that how we should think about it? Just sort of the balance between those two? Or are there other channels that we're missing?
Rhonda Farnum: There are other channels, whether it's a matter of varied elements within retail, long-term care, and hospitals, which also comment on hospitals, not only being a discounted channel; there is full wax pricing, purchasing within hospitals, and then where the DME distribution occurs. So it's the element of where fulfillment occurs for these patients.
Speaker Change: There are other channels whether it's...
Speaker Change: A matter of varied elements within retail, long-term care, hospital, which I'll also
Speaker Change: comment to hospital not only being a discounted channel there is full wax pricing purchasing within hospital and then where the DME distribution occurs so it's the element of where fulfillment occurs for these patients
Rick Winningham: Okay, Doug, just obviously, a majority of the majority of the volume flows through, you know, the community, different community channels, the hospital, you know, the hospital channel is a smaller amount in total for the entire brand. And it's really the key to the hospital being us achieving penetration in hospital use in the hospital such that we can maintain a high level of discharge rate of patients on upelery going into the community.
Speaker Change: Okay, Doug, just obviously, yeah, a majority of the majority of the volume flows through, you know, the community, different community channels, the hospital, you know, the hospital channel is a, is a.
Speaker Change: Smaller amount in total of the entire brand.
Speaker Change: And it's really the key to the hospital is us achieving penetration in the hospital, use in the hospital, such that we can maintain a high level of discharge rate of patients on upelry going into the community.
Unknown Executive: Thank you. One moment for our next question. And our next question comes from the line of Julian Harrison from PTIG. Your question, please.
Speaker Change: Thank you. One moment for our next question.
Speaker Change: And our next question comes from the line of Julian Harrison from PTIG. Your question, please.
Julian Harrison: Hi, good afternoon. This is Rayyan on behalf of Julian. Thanks for taking our questions. We were just wondering if you could give us an update on the paragraph about litigation for UPALRE.
Rheon: Hi, good afternoon. This is Rayyan for Julian. Thanks for taking our questions. We were just wondering if you could give us an update on the paragraph 4 litigations for UPALRE.
Rick Winningham: Yeah, sure. Well, I can just give you a very brief update, given that we've got, you know, we're in the middle of litigation. And, you know, as we note in the press release, we've settled with four of the litigants that were originally there. We have a total of eight parties in the existing litigation, seven in New Jersey and one in Pennsylvania. And then importantly, I think today, what we announced is that we did add another patent on upelry to the orange book. And you know, that's sort of where, you know, overall the IP, you know, the IP portfolio sets with, you know, Theravance and upelry.
Speaker Change: Yeah, sure. Well, I can just give you a very brief update, given that we've got, you know, we're in the middle of litigation. And, you know, as we note in the press release, we've, you know, settled with four of the litigants.
Julian Harrison: Got it. Thank you. Very helpful.
Speaker Change: that were originally there. We have a total of, in the existing.
Speaker Change: litigation, a total of eight litigants, seven in New Jersey, one in Pennsylvania.
Speaker Change: And then, importantly, I think today, what we announced is that we did add another patent on Upelri into the Orange Book.
Speaker Change: And, you know, that's sort of where, you know, overall the IP, you know, the IP portfolio sets with, you know, sets with Theravance and Upelri.
Julian Harrison: We did follow up on the pricing dynamics in China. Do you have a sense of what that looks like? How should we be thinking about pricing or pricing parity or discounts versus the US? Yeah, I think so.
Speaker Change: Got it. Thank you. Very helpful. We did have a follow-up on the pricing dynamics in China. Do you have a sense of what that looks like? How should we be thinking about pricing or pricing parity or discount versus the U.S.?
Rick Winningham: Yeah, I think Beatrice will probably, as we approach, you know, approach approval in China and finish the regulatory process there, I would expect them to, to comment on that. We don't have any comments on that today.
Speaker Change: I think Viatris will probably, as we approach, you know, approach approval in China and finish the regulatory process there, I would expect them to comment on that. We don't have any comments on that today.
Unknown Executive: And our next question comes from the line of David Risinger from Leering Partners. Your question, please.
Speaker Change: Got it. Thank you.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of David Risinger from Lee Ring Partners. Your question, please.
David Risinger: Yeah, thanks very much. So in terms of the channel mix shift for you, Pellery, could you just help us understand whether or not? Vietris drove that channel mix shift through promotional activities and is now reversing it, or whether Vietris was taken advantage of by some channel participants or just, you know, how the negative channel mix shift occurred and then and then how you or how Vietris could reverse it. And then separately, regarding the top line for Cypress, it seems like you're suggesting that Wall Street should expect a top line press release in early 26. Is that correct? Thank you.
David Reithinger: Yes, thanks very much. So in terms of the channel mix shift for you, Pelri, could you just help us understand whether
David Reithinger: Beatrice
David Reithinger: drove that channel makeshift through promotional activities and is now reversing it or
David Reithinger: whether Viatris was taken advantage of by some
David Reithinger: channel participants or just, you know, how negative channel mix shift occurred and then and then how you
Speaker Change: or how Beatrice could reverse it. And then separately, regarding the top line for Cypress, it seems like you're suggesting that Wall Street should expect a top line press release in early 26. Is that correct? Thank you.
Rick Winningham: Yeah, let me just take Cyprus and Cyprus, you know, the guidance will be for the data is about six months after we, you know, finish enrollment into the open label. So I think, you know, when we finish enrollment into the open label, then we'll, you know, it'll start the clock effectively for the data. And so I think we'll just have to see where, you know, where we finish the open label and sort of the mid, you know, the range of mid-25 as we, as we've given today. So. Rhonda, do you want to cover the Upelry channel?
Speaker Change: Yeah, let me just take Cyprus and Cyprus, you know, the guidance will be
Speaker Change: for the data is about six months after we, you know, finish enrollment into the open label. So I think, you know, when we finish enrollment into the open label,
Speaker Change: Then we'll, you know, it'll start the, you know, start the clock effectively for the data. And so I think we'll just have to see where, you know, where we finish the open label and sort of the mid, you know, the range of mid-25 as we've given today.
Rhonda Farnum: Yeah, David, as much as I want to get into granular detail of the dynamics of fulfillment, that's just not an area we can with our partnership agreement. We try to ensure our patients have the best access possible, and trying to ensure we're appropriately and compliantly diversifying those fulfillment options is what contributes to the mix of where the brand is fulfilled.
Rhonda Farnum: Rhonda, you want to cover the Upelry channel?
Rhonda Farnum: Yeah, David, as much as I want to get into granular detail of the dynamics of fulfillment, that's just not an area we can with our partnership agreement.
Rhonda Farnum: We
Rhonda Farnum: We try to ensure our patients have the best access possible, and trying to ensure we're appropriately
Rhonda Farnum: and Compliantly Diversifying as Fulfillment Options is what contributes to the mix of where brand is fulfilled.
David Reithinger: Okay, thank you.
Unknown Executive: And our next question comes from the line of Ernie Rodriguez from TD Cowen. Your question, please.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of Ernie Rodriguez from TD Cowen. Your question, please.
Ernie Rodriguez: Hi, thank you for taking my question. Um, just one for us.
Ernie Rodriguez: So we've seen you Perry's has reported sales of 50 to 55 million per quarter over the last eight quarters, and this has been despite some volume gain. So guidance seems to imply sales of similar levels for the remainder of 2024. So what gives you confidence that revenues can grow in 2025? Is it going to be just the pricing issues that we discussed, or is there more to it?
Ernie Rodriguez: Hi. Thank you for taking my question. Just one for us. So we've seen Yield Pairings has reported sales of around $55 million per quarter over the last eight quarters, and this has been despite some volume gains.
Speaker Change: Guidance seems to imply that sales of similar levels for the remainder of 2024, so what gives you confidence that the revenues can grow in 2025? Is it going to be just the pricing issues that we discussed or is there more to it?
Rhonda Farnum: No, I would say there's more to it, Ernie. It's certainly all dependent on that continued demand growth, which we are seeing quarter on quarter.
Speaker Change: No, I would say there's more to it, Ernie. It's certainly all dependent on that continued demand growth, which we are seeing quarter on quarter.
Rick Winningham: And we, and as Rhonda mentioned in the, in her remark, Beatrice has taken certain action to, you know, to improve the pricing dynamic. We think that, you know, while there might be a minor amount of it occur in the second half of this year, it will occur in the in in 2025. And I think the brand in terms of volume is growing. So we've got to, we've got to match that overall with with stability, and improvement in price and to get the get the overall net sales. Great.
Speaker Change: And we, and as Rhonda mentioned in the, in her remarks.
Speaker Change: Beatrice has taken certain action to
Speaker Change: You know to improve the pricing dynamic
Speaker Change: We think that, you know, while there might be a minor amount of it occur in the second half of this year, it will occur in 2025.
Speaker Change: And I think the brand in terms of volume is growing, so we've got to we've got to match that overall with with stability and improvement in price and to get the get the overall net sales.
Ernie Rodriguez: That's helpful. Thank you. Thank you. And as a reminder, if you have a question at this time, please press star 11 on your telephone. And our next question comes from the line of these big questions
Speaker Change: Growing.
Unknown Executive: Thank you. And as a reminder, if you have a question at this time, please press star 11 on your telephone. And our next question comes from the line of Liisa Bayko from Evercore ISI. Your question, please.
Speaker Change: Got it. That's helpful. Thank you.
Speaker Change: Thank you. And as a reminder, if you have a question at this time, please press star one one on your telephone. And our next question comes from the line of Lisa Baker from Evercore ISI. Your question, please.
Lisa Baker: Hi, you mentioned completing enrollment of the CYPR study at the end of this year. And that was set the timeline for data mid next year, but it's predicated on
Lisa Baker: I think patient number. Can you maybe elaborate a little bit on that and what goes into feeding that patient number? Thanks.
Liisa Bayko: Anya, you want to take that and just start with the revised guidance on the last patient and in the open label. Yeah, so just to start with reiterating
Anya: Anya, you want to take that and just with the
Rick Winningham: Thank you. And this does conclude the question and answer session for today's program. I'd like to hand the program back to Rick Winningham for any further remarks.
Anya: Yeah, so just to start with reiterating the revised guidance, so we now hope to complete enrollment in the open-label portion of the study in mid-2025 and then report top-line data six months, approximately six months later. And then, in terms of patient flow to the study, remember, we have a 12 week open-label period that then leads into the eight week randomized withdrawal portion. So we need to ensure that we've got sufficient patients progressing through the open label period into the randomized withdrawal so that we end up with 60 available patients at the end of the randomized withdrawal period.
Anya: with the revised guidance on the last patient and in the open label.
Speaker Change: So just to start with reiterating the revised guidance, so we now hope to complete enrolment in the open-label portion of the study in mid-2025 and then report top-line data six months, approximately six months later.
Speaker Change: And then in terms of the patient flow to the study, remember we have a 12-week open-label period that then leads into the eight-week randomized withdrawal portion.
Speaker Change: So we need to ensure that we've got sufficient patients progressing through the open label period into the randomised withdrawal so that we end up with 60 available patients at the end of the randomised withdrawal period.
Speaker Change: Okay, understood. Thank you.
Speaker Change: Thank you. And this does conclude the question and answer session of today's program. I'd like to hand the program back to Rick Winningham for any further remarks.
Rick Winningham: Thank you, Operator. And I'd like to thank everyone for joining us today for the 2Q update. And we look forward to updating you as the business evolves in the second half of the year.
Rick Winningham: Thank you, Operator, and I'd like to thank everyone for joining us today on the 2Q update. And we look forward to updating you as the business evolves in the second half of the year. Thank you.
Unknown Executive: This concludes today's conference call. We thank you for your participation. You may now disconnect.