Q2 2024 Harmony Biosciences Holdings Inc Earnings Call
Todd: Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences' second quarter 2024 financial results conference call. All participant lines have been placed on mute to prevent any background noise.
Todd: Good morning. My name is Todd and I will be your conference operator today. At this time, I would like to welcome everyone to Harmony Biosciences' second quarter 2024 financial results conference call.
Todd: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. Please be advised that today's conference may be recorded. Lastly, if you should require operator assistance, please press star zero. I will now turn the call over to Brennan Doyle, Head of Investor Relations. Please go ahead.
Speaker Change: All participant lines have been placed on mute to prevent any background noise.
Speaker Change: After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question at that time, please press star 1 on your telephone keypad.
Speaker Change: Please be advised that today's conference may be recorded.
Speaker Change: Lastly, if you should require operator assistance, please press star zero. I will now turn the call over to Brennan Doyle, Head of Investor Relations. Please go ahead.
Brennan Doyle: Thank you, Operator. Good morning, everyone, and thank you for joining us today as we review Harmony Biosciences' second quarter 2024 financial results and provide a business update. Before we start, I encourage everyone to go to the Investor section of our website to find the materials that accompany our discussion today, including a reconciliation of our Gap to Non-Gap financial measures. At this stage in our life cycle, we believe non-capitalized financial results better represent the underlying business performance.
Brennan Doyle: Thank you, Operator. Good morning, everyone, and thank you for joining us today as we review Harmony Bioscience's second quarter 2024 financial results.
Brennan Doyle: and provide a business update. Before we start, I encourage everyone to go to the investor section of our website to find the materials that accompany our discussion today, including a reconciliation of our gap to non- GAAP financial measures.
Brennan Doyle: At this stage in our life cycle, we believe non- GAAP financial results better represent the underlying business performance.
Brennan Doyle: Our speakers today on the call are Dr. Jeff Dayno. President and CEO. Jeffrey Dierks, Chief Commercial Officer, Dr. Kumar Budur, Chief Medical and Scientific Officer, and Sandip Kapadia, Chief Financial Officer and Chief Administrative Officer. As a reminder, we'll be making four looking statements today, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, our actual results may differ materially, and we undertake no obligation to update these statements, even if circumstances change. We encourage you to consult the risk factors referenced in our SEC filings for additional details. I would now like to turn the call over to Dr. Jeffrey Dayno. Jeff?
Speaker Change: Our speakers today on the call are Dr. Jeff Dayno, President and CEO ,
Brennan Doyle: Jeffrey Dierks, Chief Commercial Officer, Dr. Kumar Budur, Chief Medical and Scientific Officer, and Sandip Kapadia, Chief Financial Officer and Chief Administrative Officer.
Brennan Doyle: As a reminder, we will be making forward-looking statements today, which are based on our current expectations and beliefs.
Brennan Doyle: These statements are subject to certain risks and uncertainties. Our actual results may differ materially, and we undertake no obligation to update these statements, even if circumstances change. We encourage you to consult the risk factors referenced in our SEC filings for additional detail.
Speaker Change: I would now like to turn the call over to Dr. Jeffrey Dayno. Jeff?
Jeffrey Dayno: Thank you, Brennan, and thanks everyone for joining our conference call today. Q2 was another very productive quarter for the team at Harmony, delivering another quarter of strong revenue growth for WCAGS and continued advancement in our late stage clinical development program. Highlighted by the significant progress made on our next generation patolisin high dose, or patolisin HD development program, formerly referred to as NG2. During our Q1 earnings call, we shared the initial pilot PK data for the Pitocin Gastro-Resistant or Pitocin-GR program, formerly referred to as NG1, along with the development plan as the first part of our Pitocin lifecycle management activity.
Jeffrey Dayno: Thank you, Brennan, and thanks, everyone, for joining our conference call today.
Speaker Change: Q2 was another very productive quarter for the team at Harmony, delivering another quarter of strong revenue growth for WCAG and continued advancement in our late-stage clinical development programs.
Jeffrey Dayno: highlighted by the significant progress made on our next generation patolisin high-dose or patolisin HD development program, formerly referred to as NG2.
Jeffrey Dayno: During our Q1 earnings call, we shared the initial pilot PK data for the Pitocin Gastro-Resistant or Pitocin-GR program
Jeffrey Dayno: formerly referred to as NG1, along with a development plan as the first part of our Pitocin Lifecycle Management Activities.
Jeffrey Dayno: This quarter, we are excited to provide an update on our Petolsan HD program with a targeted PDUFA date in 2028 and a provisional patent filed out to 2044, providing us the opportunity to extend the Petolsan franchise to the mid-2040s with durable, long-term revenue generation. First, let me provide some color regarding the reasons why we are excited about advancing this program because of the unmet medical needs in the narcolepsy community that Patulsin HD is designed to address.
Jeffrey Dayno: This quarter, we are excited to provide an update on our Petonesin HD program with a targeted PDUFA date in 2028.
Jeffrey Dayno: and a provisional patent filed out to 2044, providing us the opportunity to extend the Petulsant franchise to the mid-2040s with durable, long-term revenue generation.
Jeffrey Dayno: First, let me provide some color regarding the reasons why we are excited about advancing this program because of the unmet medical needs in the narcolepsy community that Patolson HD is designed to address.
Jeffrey Dayno: Later in the call, Kumar will share some of the initial pilot PK data and a few other details from the Katolison HD development program. Wakex offers a strong overall benefit risk profile for patients living with narcolepsy, has brought a meaningful enhancement to the market as the first and only non-scheduled treatment indicated for both excessive daytime sleepiness or EDS and cataplexy, and has been extremely successful in the market. But given the nature of narcolepsy as a chronic neurological disorder with difficult to treat symptoms, there still remain unmet needs and opportunities for continued innovation. Harmony has expanded its pipeline and diversified its portfolio that now includes three orphan rare CNS franchises, each one of which has peak sales opportunities of $1 to $2 billion.
Kumar: Later in the call, Kumar will share some of the initial pilot PK data and a few other details from the Catullus and HD development program.
Speaker Change: has brought a meaningful enhancement to the market as the first and only non-scheduled treatment indicated for both excessive daytime sleepiness, or EDS, and cataplexy, and has been extremely successful in the market.
Speaker Change: But given the nature of narcolepsy as a chronic neurological disorder with difficult-to-treat symptoms, there still remain unmet needs and opportunities for continued innovation.
Speaker Change: A driving force behind the gastro-resistant coating is the fact that about 90% of patients with narcolepsy experience GI symptoms such as nausea, dyspepsia, and abdominal discomfort.
Speaker Change: There is a mechanistic rationale for this, especially in patients with NT1 or type 1 narcolepsy.
Speaker Change: related to the orexin deficiency since orexin has effects on the vagus nerve in the brain which is the central controller of gut motility.
Speaker Change: Wegex is well-tolerated with a low incidence of nausea, but the gastro-resistant coating feature is designed to address the predisposition to GI symptoms in patients with narcolepsy, as well as the GI tolerability issues patients have experienced with other narcolepsy treatments.
Speaker Change: Optimized PK profile, guess or resistant feature, and our plan to pursue additional indications would address significant unmet needs in patients with narcolepsy and position pitolicin HD as a meaningfully differentiated product
Speaker Change: and result in a differentiated label compared to WCGIS.
Speaker Change: with a provisional patent filed and potential IP out to 2044.
Speaker Change: and a Target-to-DUFA date in 2028.
Speaker Change: This gives us an opportunity to introduce a differentiated product prior to WakeXLOE in 2030 to extend the Petolsan franchise to the mid-2040s and drive durable, long-term revenue generation.
Speaker Change: Our commercial team conducted preliminary market research based on the target product profile for Pitocin HD.
Speaker Change: An initial result suggests that the features I described to you would be of real interest to patients.
Speaker Change: Be Viewed as Offering Meaningful Benefits by Healthcare Professionals.
Speaker Change: To round out our sleep-wake franchise, we were very pleased with the FDA approval of WAKIX for EDS in pediatric narcolepsy patients ages 6 years and older, and we're excited to launch this new indication into the market on July 1st.
Speaker Change: As a reminder, the pediatric narcolepsy data, along with data from the ongoing Phase 3 TEMPO study in Prader-Willi Syndrome, keeps us on track toward obtaining pediatric exclusivity
Speaker Change: and an additional six months of regulatory protection on the back end of our longest patent, which would take us to September 2030.
Speaker Change: We are on track to submit an SNDA for idiopathic hypersomnia later this year and are very excited about our potential best-in-class orexin 2 agonist program for TPM 1116.
Speaker Change: We are working with our partner, Bioprojet, and are on track toward filing an IND mid-2025 and then initiating first in human studies second half of 2025.
Speaker Change: Beyond our Strong Sleep-Wake franchise, we are also advancing late-stage programs in our other two franchises.
Speaker Change: neurobehavioral, and rare epilepsy.
Speaker Change: Harmony has expanded its pipeline and diversified its portfolio that now includes three orphan rare CNS franchises each one of which has peak sales opportunities of 1 to 2 billion dollars.
Speaker Change: I want to highlight that our pipeline now has eight assets advancing across 13 development programs, and three of them are in Phase 3, with a fourth Phase 3 trial to begin later this year.
Speaker Change: Importantly, this pipeline is poised to deliver at least one new product or indication launch each year over the next five years.
Speaker Change: This, along with the Potosin HD PDUFA date targeted for 2028, translates into the potential for significant, durable, long-term value creation out beyond 2040.
Speaker Change: Kumar will be providing you updates on our development programs later in the call.
Speaker Change: With these strong results, we are once again reiterating our 2024 Net Revenue Guidance of $700 to $720 million.
Speaker Change: and remain confident that WACIX represents a $1 billion plus market opportunity in narcolepsy alone. And we are well on our way.
Speaker Change: We have always stood by WACICs and our intellectual property.
Speaker Change: This re-examination request represented the second attempt to challenge the WCAG's patent, and in its decision, the USPTO stated, and I quote, this decision is final and non-appealable. End quote.
Speaker Change: This bolsters our confidence in the durability of the Petolsan franchise, with a BDUFA date for Petolsan GR in 2026.
Speaker Change: A target PDUFA date for patellicin HD in 2028.
Speaker Change: the IP for WCAG's out to 2030, and provisional patents filed for Petolicent, GR, and HD out to 2044. This puts us in a solid position to extend the Petolicent franchise out to the mid-2040s.
Speaker Change: We also remain active in business development with the goal of building out our pipeline even further.
Speaker Change: We are in a solid financial position to execute on additional BD opportunities that are consistent with our growth strategy and offer the potential to drive further value in our overall business.
Speaker Change: Lastly, we look forward to hosting our inaugural Investor Day on October 1st in New York City, where we will have an opportunity to highlight our robust late-stage pipeline and share some new data with you.
Speaker Change: With that, I will turn the call over to Jeffrey Dierks, our Chief Commercial Officer, for an update on our commercial performance. Jeff?
Jeffrey Dierks: Jeff, we saw another solid quarter of continued commercial progress for WACIX in the second quarter, highlighted by continued product adoption and growth in our underlying business fundamentals, both facilitated by favorable market access, as seen on slides four and five. We're highly penetrated within this prescriber audience and see weight kicks being prescribed to additional narcolepsy patients each quarter in this segment.
Jeffrey Dierks: Thanks, Jeff. We saw another solid quarter of continued commercial progress for WACIX in the second quarter, highlighted by continued product adoption and growth in our underlying business fundamentals.
Speaker Change: Net sales for the quarter were $172.8 million, representing 29% growth from the same quarter prior year.
Speaker Change: The growth in average patients in Q2 was in line with our expectations and reaffirms our confidence in our guidance of approximately 7,000 average patients by the end of the year.
Speaker Change: We also saw the WACIX prescriber base increase again in the second quarter.
Speaker Change: This segment of healthcare professionals represents an insulated group of prescribers and patients from the Octobates that we continue to tap into each quarter to drive performance.
Speaker Change: The growth in this segment demonstrates WACIX is broadening the branded writer segment beyond the Oxibates by providing a meaningfully differentiated product profile and one that offers broad clinical utility across the entire narcolepsy treating healthcare professional universe.
Speaker Change: Coupled with the growth we're seeing beyond the Oxybate REMS-enrolled healthcare professionals, we continue to see utilization of WACECs among the approximately 4,000 Oxybate REMS-enrolled healthcare professionals, even with the availability of new and generic Oxybate options.
Speaker Change: We're highly penetrated within this prescriber audience and see weight kicks being prescribed to additional narcolepsy patients each quarter in this segment.
Speaker Change: As we've shared during previous earnings calls, our ability to call on the broad approximately 9,000 narcolepsy-treating healthcare professional audience allows us to tap into the full-diagnosed narcolepsy patient opportunity.
Speaker Change: giving us confidence in the billion-dollar-plus opportunity for Waikiks and narcolepsy.
Speaker Change: Supporting the growth in patients and prescribers is our favorable market access and formulary coverage for WCAG.
Speaker Change: We've seen no changes to the overall broad payer coverage for WACIX over the past year with the introduction of new branded and generic options, and we believe we are well positioned to support future growth.
Speaker Change: And as we are closing out another solid quarter of performance, we are excited to receive the news of the approval of WACACS for the treatment of excessive daytime sleepiness in pediatric narcolepsy patients six years and older on June 21st.
Speaker Change: Weikich now represents the first and only non-scheduled treatment option for pediatric narcolepsy patients and importantly all narcolepsy patients have EDS. So with this approval we have the opportunity to access the full diagnosed pediatric narcolepsy patient opportunity.
Speaker Change: The Pediatric Narcolepsy Opportunity is a small but meaningful opportunity. It represents approximately 5% of the diagnosed narcolepsy opportunity for approximately 4,000 patients.
Speaker Change: And this approval was contemplated in our full year 2024 Net Sales Guidance.
Speaker Change: Our commercial team was prepared for this approval and started our now-approved outreach the week following the approval.
Speaker Change: Our field sales team was trained later that week and was out educating healthcare professionals about the new indication starting July 1st.
Speaker Change: Although it's still early, we are seeing positive indicators from the launch. We're getting very positive feedback and interest from the patient and healthcare professional community, and payers have begun to add WACICs for pediatric narcolepsy to their formularies within the first 30 days from approval.
Speaker Change: In summary, we had another strong quarter of durable growth and performance in net sales, patient ads, and growth in prescribers of WCAG. Reaffirming our full-year net sales guidance and average patient guidance that we issued earlier this year.
Speaker Change: With the addition of the pediatric narcolepsy approval for the treatment of EDS, coupled with the strong fundamental business in our adult narcolepsy, we're seeing good leading indicators in our underlying business fundamentals.
Speaker Change: Heading into the third quarter, we anticipate the typical summer seasonality of fewer patient visits, lower foot traffic in offices, consistent with previous years, and other chronically managed conditions. And we remain confident and continued growth in average patients and prescribers of WCAG moving forward.
Speaker Change: I'm excited about our performance and confidence in WACACS representing a potential billion dollar plus opportunity in narcolepsy alone and we're well on our way.
Kumar Budur: I would like to now turn the call over to our Chief Medical and Scientific Officer, Kumar Budur, to discuss the advancements in our clinical development programs. Kumar?
Kumar Budur: Good morning, everyone, and thank you for joining us today. We have also identified other supportive information that will be included in the S&A, including real-world evidence from Pitonocent use in idiopathic hypersomnia in Europe to further strengthen our submission.
Kumar Budur: Thank you, Jeff. Good morning, everyone, and thank you for joining us today.
Kumar Budur: We continue to make great progress in advancing our pipeline programs, several of which are in late stage development.
Kumar Budur: As Jeff mentioned, we now have 13 different development programs ranging from preclinical to registrational studies across eight different assets and under three distinct franchises focused on rare neuroindications with high unmet medical need.
Jeff Dayno: Our full clinical development pipeline is shown on slide number six.
Jeff Dayno: It is important to note.
Jeff Dayno: that we currently have three ongoing Phase III Registrational Studies.
Jeff Dayno: that are actively recruiting patients for three distinct indications and plan to start a fourth Phase III registration study in patients with LGS during this half of 2024.
Jeff Dayno: Starting with our sleepwake franchise, the Pitolacent High Dose or Pitolacent HD program.
Jeff Dayno: It is an enhanced formulation of PitolaScent designed to deliver an optimized PK profile along with a higher dose, GR coating, and target unique symptoms.
Jeff Dayno: We conducted a pilot PK study with four different prototype formulations in a five-way crossover study comparing the four prototype formulations with VACIX as a reference formulation at a dose strength of 35.6 mg, the highest labeled dose for VACIX.
Jeff Dayno: Based on the pilot PK data, we are pleased to advance this program forward.
Jeff Dayno: The preliminary data from the prototype formulations showed a meaningful differentiation with at least approximately 20% increase in relative bioavailability and a decrease in the variability compared to WCAGs.
Jeff Dayno: Alongside further work on formulation optimization, we will progress this program and study up to two times the current highest labeled dose of VKs, where we expect to demonstrate a further increase in relative bioavailability and decrease in variability in the PK profile.
Jeff Dayno: In addition, the GI coding is designed to address the predisposition to GI tolerability issues in patients with narcolepsy and enable to start at the beginning of the therapeutic dose range.
Jeff Dayno: Therefore, an optimized PK profile, along with a higher dose, GR coating, and targeting unique symptoms, such as fatigue and narcolepsy, is expected to provide a differentiated label and product profile.
Jeff Dayno: We will pursue an abbreviated clinical development program.
Jeff Dayno: Based on the leading-edge work, including establishing safety margins for pitolacin up to 180 mg in a repeat-dose study,
Jeff Dayno: and Qualitative Research Study on Fatigue in Narcolepsy that were completed over the past couple of years to support Peterlis and HD program.
Jeff Dayno: We are targeting a PDUFA date in 2028. Provisional patents have been submitted with the potential for patent protection until 2044.
Jeff Dayno: Moving on to petroleum-centric gastro-resistant, or GR, program, we are on track to initiate the dosing optimization study in the fourth quarter of this year, and the puertal bioequivalence study in the first quarter of 2025 with Budupha in 2026.
Jeff Dayno: For the idiopathic hypersomnia, or IH program, we are on track to submit an SNDA in the fourth quarter this year.
Jeff Dayno: The submission will be based on the totality of the data generated from the in-tune study, including data from the ongoing long-term extension study, which strongly supports predolescence efficacy in patients with IH.
Jeff Dayno: We have also identified other supportive information that will be included in the S&A, including real-world evidence from pitonacin use in idiopathic hypersomnia in Europe to further strengthen our submission.
Jeff Dayno: We are optimistic and remain committed in bringing a new treatment option to patients living with IH.
Jeff Dayno: In our neurobehavioral franchise, we remain on track to report top-line data from the Phase III ReConnect registration trial of ZYM002 in Fraser-Leck Syndrome in mid-2025.
Jeff Dayno: In the rare epilepsy fracture, patient enrollment continues in the EPF 100 phase 3 orchestral for Drouet syndrome with the top-line data expected in 2026.
Jeff Dayno: We are also preparing to initiate a Phase 3 study in LGS, another rare and severe developmental epileptic encephalopathy with high unmet medical need later this year.
Jeff Dayno: In summary, we have made significant progress in advancing our late-stage pipeline across three distinct franchises.
Jeff Dayno: If successful, these programs could result in at least one new product or indication launch each year over the next five years, along with the potential to help hundreds of thousands of patients across all the rare neurological disorders we are investigating.
Speaker Change: On behalf of Harmony, I would like to thank all the patients and their families who are participating in our clinical trials, as well as the clinical investigators and site personnel for their efforts and commitment in helping us to advance our development programs.
Jeff Dayno: I'll now turn the call over to our CFO , Sandip Kapadia, for an update on our financial performance. Sandip.
Sandip Kapadia: Thank you, Kumar, and good morning, everyone. This morning, we issued our second quarter earnings release and filed our 10-Q, where you'll find the details of our second quarter 2024 financial and operating results. We are once again reiterating our Net Revenue Guidance for 2024 of $700 to $720 million, highlighting our progress towards the $1 billion plus opportunity in narcolepsy alone. And with that, I'd like to turn the call back to Jeff for his closing remarks. Jeff?
Sandip Kapadia: Thank you, Kumar, and good morning, everyone. This morning, we issued our second quarter earnings release and filed our 10-2, where you'll find the details of our second quarter 2024 financial and operating results.
Speaker Change: Our financial performance is also shown on slides 10 through 13.
Speaker Change: We delivered another quarter of solid financial performance, with continued double-digit top-line growth, profitability, and strong cash generation.
Sandip Kapadia: Our financial performance and profile positions us well to continue advancing our growth strategy for the remainder of the year and beyond.
Sandip Kapadia: We reported net revenues of $172.8 million, compared to $134.2 million in the prior year quarter, representing a growth of 29%.
Sandip Kapadia: Performance in the second quarter reflects the continued strong underlying demand for weight kicks.
Sandip Kapadia: We also reported growth in income and margin.
Sandip Kapadia: Non-gap adjusted net income for the second quarter of 2024 was $60.6 million, or $1.05 per diluted share, compared to $45.9 million, or $0.76 per diluted share in the prior year quarter.
Sandip Kapadia: We believe non-gap-adjusted net income better reflects the underlying business performance.
Sandip Kapadia: Please see our press release for a reconciliation of GAAP to non-GAAP results.
Sandip Kapadia: With respect to expenses during the second quarter of 2024, we incurred two one-time charges related to business development transactions in the quarter, which impacted the R&D expense line.
Sandip Kapadia: We incurred a $25.5 million charge related to the upfront licensing fee paid as part of the 2024 BioPerjet sub-licensing agreement for TPM 1116.
Sandip Kapadia: and a $17.1 million IPR&D charge related to the acquisition of Epigenics.
Sandip Kapadia: The IPR&V charge related to Epigenics reflects the upfront payment of $35 million offset by assets acquired in the transactions primarily composed of a deferred tax of approximately $18 million.
Sandip Kapadia: We structured both transactions with low upfronts and success-driven milestones.
Sandip Kapadia: This allows us to efficiently use shareholder capital and focus future investments on advancing the development programs and reaching value inflection points.
Sandip Kapadia: We ended the second quarter with $434.1 million of cash equivalents and investments on the balance sheet.
Sandip Kapadia: The balance reflects continued strong cash generation which provide us the financial flexibility to execute on business development and to opportunistically return capital to shareholders via our share repurchase program.
Sandip Kapadia: Looking ahead, we continue to expect quarter-over-quarter growth for the balance of the year. We do expect an impact of summer seasonality we typically experience in the third quarter.
Sandip Kapadia: We are once again reiterating our net revenue guidance for 2024 of $700-$720 million, highlighting our progress towards the $1 billion plus opportunity in narcolepsy alone.
Sandip Kapadia: And with that, I'd like to turn the call back to Jeff for his closing remarks. Jeff?
Jeff Dayno: Thank you, Sandeep.
Jeff Dayno: In closing, I am very proud of the accomplishments that were made by the Harmony team during Q2, including
Speaker Change: Significant progress and continued advancement of the Petolsan HD Development Program toward an expected PDUFA date in 2028.
Sandip Kapadia: This, along with the USPTO's final decision upholding the validity of the WCICS patent,
Sandip Kapadia: After two failed attempts to challenge the patent, with IP out to 2030, puts us in a solid position to extend the Petolson franchise out to the mid-2040s.
Sandip Kapadia: Continued strong revenue generation for WACIX with 29% growth year-on-year.
Sandip Kapadia: The approval and launch of the Pediatric Narcolepsy Indication for WACACS.
Sandip Kapadia: Advancement of our Phase III clinical trials for ZYN002 and Fragile X Syndrome.
Sandip Kapadia: Nguyen, EPX100, Indravejh Syndrome.
Sandip Kapadia: and Patolisant in Prader-Willi syndrome, along with a fourth phase 3 trial of EPX100 on track to initiate later this year in Lennox-Gasso syndrome.
Sandip Kapadia: And two business development deals, including the in-licensing of the Erexon 2 Agonist TPM 1116 with our partner BioPerget.
Sandip Kapadia: and the acquisition of Epigenics Therapeutics that brought in EPX100 and established an exciting rare epilepsy franchise for Harmony.
Sandip Kapadia: We remain focused on execution.
Sandip Kapadia: Driven in the Advancement of our Late-Stage Pipeline.
Sandip Kapadia: Strategic in our approach to further build out our pipeline.
Sandip Kapadia: and committed to creating durable, long-term value for our shareholders, while bringing innovative treatments to market to help even more patients living with rare neurological diseases and unmet medical needs.
Jeffrey Dayno: while bringing innovative treatments to market to help even more patients living with rare neurological diseases and unmet medical needs.
Speaker Change: This concludes our planned remarks for this morning. Thank you for joining our call, and I will now turn the call back over to the operator to facilitate the Q&A session. Operator, can you please open the call to questions?
Speaker Change: At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing star 2.
Speaker Change: We remind you to please pick up your handset and please limit yourself to one question and one follow-up question.
Speaker Change: We'll take our first question from Francois Brisebois with Oppenheimer. Please go ahead.
Francois Rizwa: Hey guys, thanks for the questions and congrats on the quarter. In terms of seasonality, you talked about the summer, the third quarter months to be kind of similar to what we've seen in the past.
Speaker Change: I think, I think last year, you know, the patient ad average was actually very...
Speaker Change: solid and strong and kind of kept going in the third quarter.
Speaker Change: In the past, we have seen some drops, so is it something that they could be, you know, downward from the second quarter, or just help us understand a little bit more what you mean by saying that it's normal seasonality that you've kind of seen in terms of patients ads in the past years.
Speaker Change: Good morning, Frank, and thanks for the question. I'll turn it over to Jeff Dierks to respond.
Jeff Dierks: Sure. Yeah, so Frank, when we talk about typical summer seasonality, it really relates to fewer patient visits and the lower foot traffic, and that's more of a reflection on new patients versus existing patients.
Jeff Dierks: So we do anticipate, you know, typically, a little bit lower in terms of the new patient starts. It happens with most chronically managed medications, most patients don't schedule their medication visits during the summer when they're on vacation and holiday. But we do anticipate continued growth, as you've seen in the last four or five years of our commercialization. You know, we are obviously reiterating our guidance at approximately 7,000 average patients by the end of the year.
Speaker Change: And obviously, with the addition of the pediatric narcolepsy indication, that's going to help us support future growth as we continue to tap into this opportunity as the market allows around the typical seasonal dynamics.
Speaker Change: That's helpful. And then, you know, on that note, you talked about it's about 4,000 patients on the pediatric side. Do you expect penetration in that, you know, in the pediatric population to be better or more difficult than the adult penetration?
Frank: So, Frank, what I would say is that what we're seeing within the pediatric market is I would expect the pediatric patients to be added over a couple of years versus a bolus of patients, right? This is a brand new audience for us, although there are WACACS prescribers with knowledge of, you know, the product and its profile. You know, we have to go out and look at educating not only patients, but more importantly, the parents and the caregivers about the profile. So a little bit different than the adult population when we launched where there was sort of a bolus of patients looking for a new option. We're going to look to tap into this opportunity. I would anticipate probably a very similar patient penetration over time, but we're going to be looking to add these patients every single quarter as opposed to, you know, a large bolus that you would anticipate in the third quarter or fourth quarter this year.
Speaker Change: Yeah, and Frank, I would just add, you know, as the first and only non-scheduled product approved for, you know, patients with narcolepsy, I think WACACS is a strong product offering for pediatric narcolepsy patients.
Frank: Thank you.
Frank: Thanks Frank.
Speaker Change: Thank you. Our next question will come from Charles Duncan with Cantor Fitzgerald. Please go ahead.
Charles Duncan: Morning Jeff and team. Congrats on a great quarter and appreciate taking the questions. I actually had a follow-up to that last question regarding pediatric
Charles Duncan: patient population. I'm wondering
Speaker Change: When you consider the prescriber base of the 4K OxyBate patient prescribers versus the 5K non-OxyBate registered prescribers.
Speaker Change: Where do you think the pediatric patient population exists more, and then secondarily, in addition to penetration, what do you think about persistence? It would seem to me that persistence could be even greater in the pediatric patient population.
Speaker Change: Good morning, Charles. Thank you for your question. Jeff, thoughts on...
Jeff: Charles, we know there are about 1,100 healthcare professionals that manage that approximately 4,000 diagnosed pediatric narcolepsy patients. It probably skews a little more heavily to the occibate REMS-enrolled healthcare professionals because as you know, this is a very difficult, lifelong neurologic disorder to treat and ultimately these patients end up in some of those larger sleep centers.
Speaker Change: But the great news is, of those 1,100 doctors, a good amount of those were already in our existing call plan, they already have familiarity with WCAG, so a lot of that is simply just getting in touch with the parents, caregivers, and patients and bringing them in the office.
Speaker Change: And I think, again, it's very early, but...
Speaker Change: I would probably assume that, you know, we've seen very good persistency rates with WACIX in adults.
Jeff: So I would assume that the pediatric population may have the potential for equivalent or better persistence.
Jeff: As you know, WAKE, as Jeff shared, is a very ideally suited product profile for pediatric patients. It's a once-a-daily oral tablet you take in the morning upon wakening, so you don't have to worry about patients having to, you know, maybe go to the nurse during the day at school or have to, you know, schedule med visits for parents to drop off medicines. And being a non-scheduled treatment option, certainly that profile really appeals to the doctors but also the parents of these individuals.
Jeff: Excellent. Can I ask one quick pipeline question of Kumar? And that is regarding the IHSNDA filing this year. Are you waiting for any additional, you know, call it clinical data?
Speaker Change: or experimental results to enable that filing.
Speaker Change: And perhaps can you describe a little more the real-world use that you're thinking about including it? And finally, would you anticipate that to be a relatively quick turnaround, so maybe enabling an approval and launch by second half of next year?
Speaker Change: Hey, good morning, Charles. Thanks for the question. First of all, we are on track.
Speaker Change: to submit the SNDA by the end of this year. In terms of the evidence, as we have discussed in the past, the totality of the data from the Intune study, the open-label part, randomized withdrawal period, and also the long-term extension study chart.
Speaker Change: Now, it's almost close to a year since the study was completed. We still have about two-thirds of the patients who entered into the long-term extension study still participating in the study. Almost all of them have completed 12 months.
Speaker Change: About one-third of them have completed 18 months, and some of them are approaching two years.
Speaker Change: So this speaks to the persistence of efficacy and persistence on treatment and also benign safety profile.
Speaker Change: In terms of the additional data, we are leveraging...
Speaker Change: Some real-world evidence data from ERO.
Speaker Change: where Pitonacin was described in patients with idiopathic hypersomnia.
Speaker Change: And we'll be leveraging this data to make a stronger submission. But at the end of the day, Charles, I mean, we strongly believe in the unique...
Speaker Change: Benefit-Risk Proposition PitolaScent offers in patients with idiopathic hypersomnia.
Speaker Change: Where the currently available treatment option is a Schedule 3 controlled substance or off-label off-controlled substance versus Pitolecent, which has a profile of a non-scheduled drug with a very simple dosing regimen of taking once a day in the morning.
Charles Duncan: Persistence information, very helpful. Thanks for taking the questions.
Speaker Change: Thank you. Our next question will come from Ami Fadia with Needham. Please go ahead.
Unknown Caller: Hi, good morning. Congratulations on all the progress across the pipeline.
Ami Fadia: Hi, good morning. Congratulations on all the progress across the pipeline. My first question is for Kumar regarding
Speaker Change: the Pitotasand high-dose formulation.
Unknown Caller: My first question is for Kumar regarding the pitota sand high-dose formulation. Can you help us better understand how the increased exposure rate would translate into higher efficacy and maybe more from a mechanistic rationale and maybe the occupancy? What is the unmet need there and how do you see a patient benefit during the course of a day with a higher-dose formulation?
Speaker Change: Can you help us better understand how the increased...
Ami Fadia: exposure rate would translate into
Ami Fadia: Higher efficacy and maybe more from a mechanistic rationale and maybe the occupancy.
Speaker Change: You know, sort of how much, you know, what is sort of the unmet need there and how do you see a patient benefit during the course of a day with a higher dose formulation?
Ami Fadia: Hey, good morning, Ami. Thank you for the question. Yeah, first of all, Ami, we are really excited with the data that we saw with the pitocin high-dose formulation.
Speaker Change: We saw both an increase in relative bioavailability and also a decrease in inter-individual variables.
Speaker Change: And also, as we had discussed earlier in the press release,
Ami Fadia: We will be studying up to two times the highest labeled dose of vacaine. We have a body of evidence, Ami, to show.
Ami Fadia: The ability to start at the therapeutic dose range and finally targeting the symptoms for which there are no approved treatments.
Speaker Change: offers a very unique
Speaker Change: Product Profile for our patients and this product profile was very well received when Jeff Dierks and his team did market research. Jeff, do you want to add anything?
Jeff Dierks: Sure, so Ami, just from a commercial perspective, we did do some preliminary market research across about a hundred narcolepsy patients, 25
Speaker Change: Asleep Specialists and Healthcare Professionals, and seven Pharmacy Directors of Payers, just to get some feedback with the initial target product profile. And I think as Kumar stated, looking across those three audiences.
Kumar Budur: What was coming out of the research was that this is a very meaningfully differentiated product profile and one that looks to be clinically superior than WACIX simply because the biggest unmet need that's in the marketplace is enhanced efficacy. About 75% of patients that are on treatment
Jeff Dierks: Still report residual symptoms that impact their daily life.
Jeff Dierks: And so we know in a polypharmacy market, you know, physicians and patients are looking for enhanced efficacy. Then the other second unmet need was really the untreated fatigue, which, you know, no product currently is approved for right now. And data suggested up to 60% of narcolepsy patients also have untreated fatigue, which is very distinct and different from excessive daytime sleepiness.
Jeff Dierks: And then lastly, what we've seen in the literature as well as in research is, you know, more than 90% of people living with narcolepsy have GI disturbances.
Speaker Change: Mostly attributed to their pathophysiology of their disease.
Speaker Change: But up to 20% of them also experience GI issues such as nausea on their medication. So the combination of this profile addressing enhanced efficacy, untreated fatigue, and the GI, you know, symptom, and with the gastro-resistant coating.
Speaker Change: It really seems to present a very clinically superior product, one that payers are going to be broadly covering and one that physicians really see as a very attractive treatment option for the vast majority of their patients.
Speaker Change: Great. Thank you. My second question is for Sandeep.
Speaker Change: With all of these different programs underway, there is obviously going to be a fair amount of investment from the R&D front as these assets progress.
Sandeep: Sure. Ami, thanks for the question. I mean, business development continues, as Jeff mentioned, as a priority for the company. You know, we've done several transactions, as you saw from the last year or so. We've done three transactions. And see, we've done them in a financial discipline manner. You know, we've looked at them at all as low up-fronts, you know, success-driven milestones.
Jeff: And the filters for us continue to be Rare Orphans in CNS, looking at things that can help leverage a lot of capabilities that we've already built as a company, and as we have more programs in-house, we're building better and better capabilities that we can leverage both on the clinical side as well as commercial. I don't know, Jeff, any thoughts further? Yeah. No. Good morning, Ami. Excuse me. Thank you. Thank you. Thank you. It's a pleasure. It's a pleasure.
Jeff: You know, the strategy that we've taken thus far, you know, in regards to business development with the strategic focus in orphan rare neuro, how we, you know, build out.
Jeff: sort of the three franchises that we have now, you know, with...
Jeff: You know, our main franchise in Sleep, Wake, you know, the neurobehavioral franchise and the rare epilepsy franchise we bought in. I mean, we see that strategy and opportunities in a similar vein going forward.
Jeff: and where we are now, you know, with regard to...
Jeff: You know, the three CNS franchises.
Jeff: And doing it in a thoughtful and a prudent manner has set us up, you know, each of those with, you know, potential peak sales opportunities of $1 to $2 billion. We can potentially.
Jeff: Add to each of those franchises or if we see an opportunity sort of in an adjacent area in neuro or neuropsych disorders, then we would contemplate that as well. We like our profile, we like the way we've approached it thus far, and we continue to take a similar approach going forward.
Speaker Change: Thank you so much.
Ami Fadia: Thanks, Ami.
Speaker Change: Thank you. Our next question will come from David Amsellem with Piper Sandler. Please go ahead.
David Amsalom: Thanks, just a couple. So first on the high-dose formulation, can you talk through
David Amsalom: The dosing in contrast to
Jeff: both the legacy formulation and
David Amsalom: And what I'm wondering in particular is, with the greater potency, is there any risk at
David Amsalom: It could cross into controlled substance territory, in terms of scheduling, and what kind of, you know, are you going to do the full suite of human abuse liability work there. So that's number one. And then number two, might have missed this earlier, but you talked more about the doctors who are not enrolled.
Speaker Change: Can you talk about your penetration there and what your expectation is over time in terms of penetration into that portion of the physician audience? Thank you.
Speaker Change: Yeah, good morning, David. Thanks for your questions. Let me address, you know, part of the first one, then I'll turn it over to Kumar and Jeff Dierks.
Patolson: With regards to the potential for changing, you know, the abuse potential, you know, Patolson HD, David, you know, this is Patolson.
Speaker Change: So, in terms of mechanistically, I mean, the short answer is no, you know, the higher dose does not change the mechanism with regards to the lack of abuse potential or abuse liability. So, the program, you know, will not require, you know, further abuse liability studies.
Speaker Change: And then in terms of...
Speaker Change: You know the dosing and with regards to pitolicin, you know GR
Ami Fadia: You know, that is based on the demonstration of bioequivalence at equivalent doses to WACCX within the current labeled range of 17.8 to 35.6.
Kumar Budur: I'll turn it over to Kumar to comment on the plan with regards to the opportunity in the Propulsion HD program and what the thinking is there.
Kumar Budur: In the end, the dosing regimen here will be different compared to the legacy VACIX program, and we will provide those details at a later point in time in terms of the dosage strength that we'll be pursuing. But as we said earlier, we'll be studying up to two.
Kumar Budur: It's been a regular rhythm that we've been able to tap in and see growth within the segment with respect to a goal for penetration I don't necessarily have a goal per se in mind, but I do believe there is still ample room to grow in this area. All we know that all 5000. These health care professionals have at least a couple of narcolepsy patients under their care.
Kumar Budur: And our.
Kumar Budur: <unk> representatives are out educating the entire 5000 network. So I would say, we continue to tap and we've seen growth from 30% to 33% to north of 35. We're now approaching 40, so I think theres a regular rhythm of continuing to add to this space and we're anticipating continued growth in this segment.
Speaker Change: And I do believe that there is ample room to grow for unique prescribers and then the second phase of that David is as they start their first patient on <unk>. The next phase of growth in this audience is growing the depth of their prescribe it.
Speaker Change: We are starting to see that as well so it's a very unique audience insulated from the ox debates, both branded and generic <unk>.
David Amsalom: Thank you.
David Amsalom: Thanks, David.
Kumar Budur: Thank you. Our next question will come from Greg <unk> with Mizuho Securities. Please go ahead.
Kumar Budur: Yeah.
Greg: Good morning, Thanks for taking my questions and congratulations also from me on the progress in the quarter.
Speaker Change: My first question is on the commercial business and awake.
Speaker Change: And I might have missed this detailed before but as we think about the second half in terms of net patient adds.
Speaker Change: I think that historically, we've seen over the past several years and that patient adds for the second half around 600 to even 700.
Speaker Change: I think based on what I had heard earlier from Jeff Berkes that you had planned to end the year at 7000.
Speaker Change: Just wanted to revisit what the second half implies a few ended.
Speaker Change: At $65 50, I think by my math and again, if I have my math correct that only implies 450 million additional net patient adds for the balance of the second half. So if you could just provide some commentary around what our expectations should be for the second half on that patient adds and appreciating that the revenue guidance has remained the same and then my second.
Speaker Change: Just on the HD formulation.
Speaker Change: <unk>.
Speaker Change: Knowing that you're going to be testing higher doses to improve on efficacy I was just wondering what the expectation on safety should be I realize you've got it.
Speaker Change: Our formulation, but are you anticipating that with.
Speaker Change: Higher doses that you are going to be evaluating versus the legacy <unk> product that the side effect profile relatively will be.
Speaker Change: The same or perhaps even less than legacy wake ex any comments around what you are anticipating to see on safety relative to wake X with HD formulation would be appreciate it. Thanks so much.
Greg: Yeah. Thanks, Craig for your questions. The first one over to suggest to us on the commercial side sure. So Greg with respect to thinking about full year 2024, and patient adds. So yes, we did add about 250 average patient sequentially from the first quarter in the second quarter and reported approximately 6550 average patients.
Speaker Change: We are reiterating our guidance of approximately 7000 at the end of the year. So your math is correct and I think it's important that yes, historically when youre looking at year two year, three and even year four we're now in year five of our rare wharf and commercialization and we feel extremely confident and good about the growth. We're seeing we expect continued growth through the balance of the year.
Speaker Change: As we shared a little bit earlier, we do expect a typical.
Speaker Change: Summer seasonality that impact new patient starts you tend to have some patients who are chronically managed scheduling their appointments in the fourth quarter for Med management.
Speaker Change: We do anticipate strong refill behavior in the fourth quarter typically patients like to fill their new and refill medicines before the end of the year insurance resets insurance changes next year.
Speaker Change: Seeing good underlying business fundamentals right recently added the pediatric narcolepsy indication approval.
Speaker Change: Ultimately help support future growth and we will continue to tap into that diagnosed patient opportunity as those seasonal market dynamics allow each year.
Speaker Change: But were continued as Sandeep alluded earlier, we're confident in continued growth for the balance of the year and quarter over quarter growth.
Speaker Change: I think gives you are looking at where we anticipate ending the year our guidance of about 7000 should kind of help you think about the <unk>.
Speaker Change: Third and fourth quarter moving forward.
Speaker Change: Yes, and Greg I would say in terms of.
Speaker Change: The overall benefit risk profile with regards to the Tulsa in HD and our expectation.
Speaker Change: Based on what we've previously seen on dose response and other data in the pivotal program.
Kumar Budur: We expect that same profile to be maintained with regards to the opportunity for improved efficacy with no change in overall safety Tolerability and Kumar any added color on that.
Speaker Change: You covered everything.
Kumar Budur: Good morning, Gregg the only other thing that I would like to add is Gregg as I mentioned earlier.
Gregg: We plan to act related program with <unk> 2080 <unk>.
Speaker Change: We did some leading edge work we looked at all.
Speaker Change: We don't think.
Speaker Change: About 18 months ago. We started this study looked at multiple doses of <unk>.
Speaker Change: <unk> studied up to 180 milligram.
Sandy: Sandy and safety and <unk> profile.
Speaker Change: Lewis to the highest level.
Speaker Change: The 235.
Speaker Change: Milligram, but we did not see any change in the safety and Tolerability profile and you mentioned it would be gastro resistant coating gastro resistant coating if anything should activities linked in a more positive patient experience.
Speaker Change: Yeah.
Speaker Change: Thank you. Our next question will come from David Wong with Citigroup. Please go ahead.
David Wong: Hi, there good morning, and thanks for taking my questions.
David Wong: First one I just wanted to ask about your level of confidence here in meeting the projected Paducah date to 2026 and 2028.
Speaker Change: For the <unk> HD formulations, respectively, and what are the key.
Speaker Change: Factors to get to in terms of data packages for filing with the agency.
Speaker Change: And then second question in terms of the CPM $111 six molecule, which you are taking towards IND filings are there any features there, which you believe could differentiate from other orexin agonist currently in development and how do you think about developing for batteries indication.
Speaker Change: So it does narcolepsy versus IH. Thank you.
David: Yes, David Good morning, Thanks for your question.
Speaker Change: With regards to.
Speaker Change: Our confidence in the projected <unk> dates for <unk> in HD programs I think we are.
Speaker Change: We're confident in terms of the development plan, that's laid out and our ability to hit those dates I can have kumar provide further color on that and what some of the key major milestones are.
Kumar Budur: Towards that Kumar.
Kumar Budur: Good morning, Dave.
Kumar Budur: Thanks for the question regarding the gastro resistant formulation.
Speaker Change: We disclosed earlier during the call we.
Kumar Budur: We had on cloud started dosing might be since study in the fourth quarter of this year and.
Kumar Budur: And we will start thank you Wilson.
Wilson: Women study in the first quarter.
Kumar Budur: Alright.
Speaker Change: We're on track.
Kumar Budur: 2026, we are confident about it.
Kumar Budur: One of the its deformation.
Speaker Change: The initial PK data from the pilot study announced I mentioned earlier due to some of the leading edge work that we have already done to accelerated program like establishing safety Mark tends to be conducted a quantitative study.
Speaker Change: In patients with narcolepsy, who have identified the right instrument.
Kumar Budur: Steady fatigue in this patient population.
Kumar Budur: I anticipate this to be in the next stage of the clinical development in 2025, and we will provide more color to this.
Kumar Budur: As we solidify some of our plants.
Speaker Change: Regarding your last question about <unk> 16, our audit.
Speaker Change: Good news.
David: The differentiating feature David.
Speaker Change: I mean first of all.
Speaker Change: Belong to a novel chemical series.
Speaker Change: It has a different chemical discount Ford are.
Speaker Change: And it's different than any other audit.
Speaker Change: That would be normal.
Speaker Change: And what we have seen.
Kumar Budur: Clinical experiment.
Kumar Budur: The most important.
Kumar Budur: Products into August.
Speaker Change: Just on the information that is available in the public domain on various products.
Speaker Change: Ocwen is the fact.
Kumar Budur: This is the most important audits to accept a agonist does view of comp.
Kumar Budur: Okay.
Kumar Budur: Dual NP, one <unk> to <unk>.
Kumar Budur: Yes.
Kumar Budur: Based on the information on other compounds.
Kumar Budur: You may have noticed that.
Kumar Budur: Typically in <unk>.
Kumar Budur: It's a higher dose than in Q2.
Kumar Budur: From that perspective.
Kumar Budur: In terms of avoiding the off target side effects that give us some.
Kumar Budur: And also the preclinical safety data that we have seen.
Kumar Budur: Is actually very encouraging and definitely believe.
Speaker Change: DPM delivered 16 would be the 14th Sheila best in class compound when it comes to audit.
Kumar Budur: Acquisition.
Kumar Budur: Yeah.
Kumar Budur: Okay.
Kumar Budur: Okay.
Speaker Change: Thank you. Our next question will come from Karin Johnson with Goldman Sachs. Please go ahead.
Karin Johnson: Hey, good morning, maybe from just Eric you've talked about the 1 billion target for sales I guess, maybe you can just talk a little bit more about the path.
Eric: From here, where we are today to there, particularly with respect to the patient growth you would need to see to get to that target.
Speaker Change: And then on maybe like a little bit more just clarification can you just provide some color around gross to that through the first half of this year I think sales are relatively flat versus second half 'twenty three but obviously you took price indications.
Speaker Change: <unk> to gross.
Speaker Change: Curious what youre seeing there and how we should think about gross to net in the balance of the year to date.
Jeff: Yes, sure Chris Good morning, Jeff, Yes, so great question. So the path to $1 billion based obviously on our net average price per patient achieving $1 billion basically is looking getting north of about 9000 average patients on product. We just finished the quarter and reported approximately 6550 so.
Kumar Budur: Our goal to achieve $1 billion is simply looking at adding another 2500 average patients between now mid 2024 and mid 2030. So over the next six years and I think obviously based upon our four years of history and what we believe in continued growth the path to $1 billion is very clear, we obviously have a very.
Kumar Budur: Analog in the OXXO base, which was able to achieve a $1 billion on its path with a much smaller ability to tap into only about 4000 health care professionals. It didn't have obviously the access to the full diagnosed patient opportunity. So we believe accessing 9000 health care professionals with the goal of having to achieve another 2500 average patient.
Kumar Budur: In the next six years I think is absolutely achievable and Thats why we look at this as a $1 billion plus opportunity and I think we're very excited about the ability to enhance the <unk> franchise by adding both <unk> and HD along in that time period, and really building out this franchise and being able to help thousands of patients living with <unk>.
Kumar Budur: <unk>.
Sandeep: Sandeep comments on <unk>.
Kumar Budur: Sure Yes.
Sandeep: Thanks for the question.
Speaker Change: <unk> had generally I'd say behaved in line with what we've seen in the past typically is lower in the first quarter of the year.
Kumar Budur: As you go into the second quarter, it tends to improve and that's what we've seen roughly.
Speaker Change: Our average for patients up about that.
Speaker Change: 5%.
Speaker Change: Quarter over this quarter, we took a price increase earlier this year or so.
Speaker Change: I think generally it's in line with our expectations on how the evolution and sort of stabilizes and improves bid in the second half of the year.
Speaker Change: Okay. Thank you.
Chris: Thanks, Chris.
Jason <unk>: Thank you our last question will come from Jason <unk> with Bank of America. Please go ahead.
Speaker Change: Hey, Jeff This is Bob Patel on for Jason Great Barry.
Bob Patel: The first question is that you flagged improves Gi side effects that <unk> has.
Speaker Change: Potential to address so given rates are only 6% in phase III and presumably mitigated by titration is there a higher real world dropout rate with <unk>.
Speaker Change: And then I have a follow up question.
Speaker Change: If I may.
Kumar Budur: Sure. Thanks for the question.
Kumar Budur: I think Kumar can address I think the <unk> design is it truly the predisposition so it's not.
Kumar Budur: Related to the Tolerability profile related to weight ticks and the incidence of nausea.
Speaker Change: But as we said patients with narcolepsy.
Speaker Change: The vast majority have Gi symptoms related to underlying mechanism of disease. So a lot of them experienced the potential for nausea, vomiting, and abdominal discomfort and they see that also with other common narcolepsy treatment. So the predisposition to.
Speaker Change: What is likely sort of co morbid symptomatology.
Speaker Change: The GR feature can potentially reduce that potential.
Speaker Change: And then, especially in the HD program as we go up on the dose.
Kumar Budur: At G. R feature could be beneficial in that regard.
Kumar Budur: Kumar additional thoughts.
Speaker Change: You covered everything.
Kumar Budur: Jeff will be the only other thing.
Jeff: I may want to add is look with the CR formulation apart from.
Kumar Budur: The gastro resistant.
Kumar Budur: Positive attributes.
Kumar Budur: In general for patients with narcolepsy. It also enables us to stock at the therapeutic dose range pretty much all the medications that are used by these patient request some kind of penetration.
Kumar Budur: It enables us to start at the beginning of the therapeutic dose range. So that the patients don't have to wait until they realize efficacy.
Kumar Budur: Efficacy better compliance.
Kumar Budur: <unk> patient experience overall.
Speaker Change: Thanks, guys and then my second question is related to your pipeline on EPS 100.
Speaker Change: <unk> H T. Two mechanism is similar to UCB commercial stage, when Tesla and long boards.
Kumar Budur: Development stage.
Kumar Budur: Catherine.
Speaker Change: The phase III study is expected to start by year end 2024, So I guess, how can <unk> X 100 differentiate itself in the landscape is the efficacy or safety improvement that we're looking for in dry syndrome with.
Speaker Change: With the topline data in 2026, and maybe if you can help us understand where you see this fitting.
Speaker Change: Fitting into the current treatment landscape. Thank you.
Speaker Change: Yes, that's a great question look as you mentioned the serotonin mechanical more fraction developmental epileptic encephalopathy, Israel desktop based right and we also saw the zebrafish model great Clemens all hydro.
Speaker Change: Very well.
Speaker Change: <unk> has a pretty good predictive ability when it comes to efficacy and developmental epileptic encephalopathy or <unk>.
Speaker Change: Clinical differentiation with a very good one how do we differentiate a signal that drugs that are currently used redevelopment electrolytic.
Speaker Change: <unk>.
Speaker Change: Thanks <unk>.
Speaker Change: We have significant limitations in terms of safety and Tolerability. For example, <unk> has significant incidence of nausea, abdominal discomfort, and diarrhea and up to 40% of patients.
Kumar Budur: Patients also need to monitor liver function before starting treatment and are regularly in terms of bid offer.
Speaker Change: For example, you mentioned about Ucp's, Denmark.
Speaker Change: <unk> <unk>.
Speaker Change: And on top of it the patient advocate echocardiogram before starting the treatment unfair.
Speaker Change: Once every six months because of the risk of cardiac.
Speaker Change: And fundamentally arterial hypertension.
Speaker Change: What we have.
Kumar Budur: <unk> 100, which by the way we are developing a new chemical entity requested.
Kumar Budur: Restrict by the FDA.
Speaker Change: Back to the non clinical Tox studies.
Kumar Budur: Not sure any concern about any cost moves to hepatic tissue.
Kumar Budur: Neither we did see anything in our phase one healthy volunteer studies.
Speaker Change: Gulf comes from.
Speaker Change: The difference really is safety and Tolerability and clinical trials, our clinical bonds, we haven't seen any dose limiting.
Speaker Change: Tolerability issue any laboratory abnormalities.
Speaker Change: We believe the efficacy will be somewhere in the range that would be meaningful to the patients from a safety profile. It will offer a distinctive safety profile.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: Thank you.
Todd: Thank you. At this time, I have no further questions. I would like to turn the call back to Jeff Dayno for any closing remarks.
Speaker Change: Thank you at this time I show no further questions.
Speaker Change: I'd now like to turn the call back to Jeff Dino for any closing remarks.
Jeff Dino: Thank you Todd and thanks to everyone for joining our call today and for your interest in harmony we.
Speaker Change: We look forward to our Investor day on October 1st in New York City, when we'll have the opportunity to.
Speaker Change: Showcase and highlight the value of our late stage pipeline as well as providing you updates later this year as we execute on our long term growth strategy. Thank you and have a great day.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: This does conclude harmony Biosciences second quarter 2024 financial results conference call.
Speaker Change: You may now disconnect your line and have a wonderful day.
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