Q3 2024 Vertex Pharmaceuticals Inc Earnings Call
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Speaker Change: Good day and welcome to the Vertex Pharmaceuticals 3rd Quarter, 2024, Ernest Call. All participants will be in a listening only mode? Should you need assistance? Please signal conference specialists by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions.
Speaker Change: Please know this event is being recorded. I would now like to turn the conference over to Miss Susie Lisa. Please go ahead and maim.
Susie Lisa: Good evening everyone, my name is Susie Lisa and is the Senior Vice President of Investor Relations. It is my pleasure to welcome you to our third quarter, 2024 Financial Results Conference Call.
Susie Lisa: On tonight's call, Making for Parade Remarks, we have Dr. Rachma Kewalramani, Vertexus CEO and President, Stuart Arbuckle, Tifa operating officer, and Charlie Wagner, Tifa Nanchal Officer.
Speaker Change: We recommend that you access the webcast slides as you listen to this call, the calls being recorded and the replay will be available on our website.
Speaker Change: We will make forward looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission.
Speaker Change: These statements, including without limitation, those regarding vertexes marketed medicines for cystic fibrosis, sickle cell disease, and beta-falisemia.
Speaker Change: Our pipeline, including the potential near-term launches of the Vansic After Triple in CF and Zezetra gene in moderate to severe acute pain, and vertexous future financial performance, our based on management's current assumptions, actual outcomes and events could differ materially.
Speaker Change: I would also note that select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. I will now turn the call over to Reshma.
Reshma: Thanks Susie, good evening all, and thank you for joining us on the call today.
Reshma: Third quarter performance extended our strong momentum for the year with continued outstanding commercial execution in both CF and the early launch of Cachevi, as well as launch preparedness for two potential near-term approvals in early 2025.
Speaker Change: We also continue to rapidly progress programs in our clinical pipeline and achieved a significant milestone with three new programs advancing into phase three clinical trials in just the last quarter.
Speaker Change: In CF, we are reaching more patients and delivered $2.77 billion in revenue, representing 12% growth this quarter versus Q3 2023.
Speaker Change: Based on the strong growth year-to-date and our Q4 outlook, we are increasing our full-year product revenue guidance to $10.8 to $10.9 billion while maintaining our previous operating expense guidance.
Speaker Change: With CASHEBI, the early launch is going very well, the enthusiasm from patients and physicians remains high, and we are pleased with the ATC and patient cell collection metrics.
Speaker Change: I'm particularly pleased to share that in Q3, the first patient received commercial caschevi, resulting in the first revenue recognition for this medicine.
Speaker Change: With respect to the overall pipeline, we remain on track to deliver our January 2023 5-in-5 ambition with five new product launches over five years as we advance into this new era of revenue diversification.
Speaker Change: Specifically, in addition to the cast chevy launches in sickle cell disease and beta falcemia, we are preparing for potential third and fourth product launches in early 2025. The vanzikafter triple in CF globally and susetra gene in moderate to severe acute pain in the U.S.
Speaker Change: Beyond that, the programs in Phase 3 development in Axoplin and ApoL1-mediated kidney disease, Cicetrogene in diabetic peripheral neuropathy, Covitacicept in IgA nephropathy, and VX-880 in type 1 diabetes are all progressing nicely.
Speaker Change: And we're also making strong progress in our mid-stage clinical pipeline with potentially transformative medicines VX993 in acute and peripheral neuropathic pain, VX670 in myotonic dystrophy type 1 or DM1, and povitacicep in indications beyond IgA nephropathy.
Speaker Change: Tonight, I'll focus my R&D comments on CF and four additional programs that have made notable advancements this quarter.
Speaker Change: First in CF.
Speaker Change: Our four marketed medicines are treating the underlying cause of disease in more than 68,000 patients around the world. This includes children as young as one month with Kalydeco, as young as one year with Orkambi, and as young as two years with Trikafta.
Speaker Change: We are poised for the potential approval of the Vanzikafter Triple, our fifth medicine for people with cystic fibrosis.
Speaker Change: six years of age and older. We have a PDUFA date of January 2nd in the U.S. and we have also completed submissions in the EU, the U.K., Canada, Australia, New Zealand, and Switzerland. Reviews in these jurisdictions are underway.
Speaker Change: We have also already initiated the clinical trial in children with CF ages 2 to 5.
Speaker Change: Finally, in CF, VX522, our CFTR mRNA therapy, in development with our partners at Moderna, has completed the single ascending dose portion of the Phase 1-2 study and continues in the multiple ascending dose, or MAD, portion.
Speaker Change: This therapy seeks to provide treatment for the more than 5,000 people with CF who do not make any CFTR protein. And we expect to share both safety and efficacy results from the MAD in the first half of 2025.
Speaker Change: Next, in type 1 diabetes, VX880 is the stem cell derived, fully differentiated, islet cell investigational therapy for people with type 1 diabetes and impaired hypoglycemic awareness.
Speaker Change: who experienced severe hypoglycemic events, or SHEs, despite optimal medical care.
Speaker Change: I am very pleased to share that we have completed our End of Phase II meetings with FDA, EMA, and MHRA.
Speaker Change: And following these successful regulatory interactions, we have reached agreement with regulators to advance the current Phase I-II VX-880 study to pivotal development and convert the trial into a Phase I-II-III study.
Speaker Change: This trial will include a total of 50 patients with difficult-to-control diabetes and severe hypoglycemic events, despite optimal medical management.
Speaker Change: In this Phase 1-2-3 study, the primary endpoint is the proportion of patients achieving insulin independence with the absence of severe hypoglycemic events.
Speaker Change: We are excited to be in pivotal development for this groundbreaking, potentially curative therapy for patients suffering from the most severe form of type 1 diabetes.
Speaker Change: It is particularly noteworthy that the first-ever pivotal trial of an allogeneic regenerative cell therapy for type 1 diabetes is beginning less than a year after we received the first-ever approval for CRISPR-Cas9 gene-edited cell therapy with CasGevi. We are proud of the progress represented by these advancements in the cell and gene therapy space.
Speaker Change: To close out on the VX-880 program, I'll provide a quick recap on the data presented at EASD this September.
Speaker Change: These remarkable data form the basis of our recent regulatory discussions and included more patients with longer duration of follow-up compared to the ADA presentation.
Speaker Change: These data showed four patients had 12 months of follow-up, and all four achieved the primary and secondary endpoints.
Speaker Change: Specifically, they had elimination of severe hypoglycemic events, achieved insulin independence, and achieved the ADA-recommended hemoglobin A1C levels of less than 7%.
Speaker Change: Also at EASD, we shared that an additional five patients were off exogenous insulin as they progressed toward the 12-month primary endpoint evaluation. Safety and tolerability with this latest data cut were consistent with the June ADA presentation.
Speaker Change: Beyond VX880, our CellsPlus device, or VX264 program, encapsulates the same VX880 cells in a proprietary device designed to eliminate the need for immunosuppressants.
Speaker Change: We are currently enrolling and dosing patients in Part B, which is at the full target dose with a stagger between patients.
Speaker Change: The next stage, Part C of the trial, is at the full target dose without a stagger. We expect to share data from Parts A and B of the VX264 study in 2025.
Speaker Change: Moving now to the POVITASA CEP Program.
Speaker Change: Hovey is a dual antagonist of the Bath and April cytokines, which play key roles in the pathogenesis of B-cell-mediated autoimmune diseases.
Speaker Change: This dual-inhibition mechanism of action, the preclinical and clinical data to date, plus POVI's once-monthly dosing frequency with small-volume subcutaneous route of administration, give us high confidence in the promise of Povitacicept as a transformative medicine for patients with IgA nephropathy and potentially additional B-cell-mediated diseases.
Speaker Change: Covey recently hit multiple milestones.
Speaker Change: First.
Speaker Change: I'm very pleased to share that we began the global Phase III Rainier study of COVI in patients with IgA nephropathy.
Speaker Change: The study is a randomized, double-blind trial of POVI 80 milligrams versus placebo on top of standard of care. The trial is underway with screening, enrollment, and dosing ongoing across multiple clinical sites globally.
Speaker Change: For full approval, the study will continue through week 104 and assess GFR.
Speaker Change: Second, the recently initiated Rainier Phase III study was supported by positive data that we shared at the recent American Society of Nephrology meeting.
Speaker Change: In IgA nephropathy, updated Phase II data on patients with IgA nephropathy who received 80 mg of povitacicept continue to demonstrate POVI's best-in-class potential with a mean 66% reduction from baseline in your PCR at 48 weeks with stable renal function.
Speaker Change: These results were accompanied by a 63% achievement, or 5 out of the 8 study participants, of clinical remission, defined as UPCR of less than 0.5 grams per gram, negative hematuria, and stable renal function.
Speaker Change: We are very excited about these results and the potential they represent for IgAN patients globally, including the approximately 130,000 patients diagnosed in the U.S.
Speaker Change: Third, at ASN, we shared emerging POVI data from another renal B-cell mediated disease, primary membranous nephropathy, a disease that affects 60,000 patients in the U.S. with no approved targeted therapies.
Speaker Change: These data are from three patients who receive COVI at 80 milligrams subcutaneously every four weeks.
Speaker Change: On proteinuria, at 24 weeks, treatment with POVI resulted in a mean 62% reduction from baseline in UPCR, and two of the three patients achieved partial clinical remission, defined as UPCR of less than 3.5 grams per gram and greater than 50% reduction in UPCR from baseline.
Speaker Change: In addition, anti-PLA-2R antibodies, a biomarker of disease activity, declined by a mean of 87% at week 20 in these patients.
Speaker Change: Across the renal studies, POVI was well-tolerated, and most adverse events were mild or moderate. We look forward to updating you as the POVI programs progress.
Speaker Change: Shifting gears now from POVI to the pain portfolio and starting with acute pain. The FDA review of Cicetra gene in moderate to severe acute pain is well underway with a PDUFA date of January 30th, 2025.
Speaker Change: The phase 3 data from the two RCTs and the single arm safety and effectiveness trial that form the basis of the acute pain regulatory submission were presented for the first time at the recent American Society of Anesthesiology annual meeting.
Speaker Change: There was very strong physician interest and positive feedback to the presentation of this data set, and we now look forward to the completion of the regulatory review, potential approval, and launch of susceptrogene. Stuart will provide more detail on the acute pain launch readiness.
Speaker Change: Our next-generation NAV1.8 inhibitor, VX993, is being studied in two acute pain studies. A Phase II study post-bunionectomy with the oral formulation and a Phase I study with the IV formulation.
Speaker Change: We also continue to make strong preclinical progress with our NAV1.7 pain signal inhibitor program that may be used alone or in combination with NAV1.8 inhibitors. In peripheral neuropathic pain, or PNP,
Speaker Change: In diabetic peripheral neuropathic pain, which is one type of PNP, for which an estimated 2 million Americans seek a prescription pain medicine annually, I am very pleased to share two updates.
Speaker Change: First, we have initiated the Phase III Pivotal Program for Cicetrogene. Second, we have also initiated a Phase II study with the oral formulation of VX993.
Speaker Change: And in lumbosacral radiculopathy or LSR, another type of PNP that impacts more than 4 million Americans each year and for which there are no specifically approved medicines in the U.S.
Speaker Change: As a reminder, this is a 12-week trial of about 200 patients randomized to either sucetragene 69 mg or placebo. The primary endpoint is the within-group change in the NPRS score from baseline to the end of the 12-week study.
Speaker Change: The design allows for an efficient evaluation of the magnitude of the treatment effect for sucetrogene as well as the placebo group, so that we may appropriately size a potential Phase III trial if the Phase II data support advancement.
Speaker Change: To wrap up the discussion on the pipeline today, a brief update on the myotonic dystrophy type 1, or DM1, program.
Speaker Change: DM1 is the most prevalent type of muscular dystrophy, impacting 110,000 patients in the U.S. and Europe, and for which there are no approved therapies.
Speaker Change: Our Phase I-II clinical study of VX670 initiated late last year, and I am pleased to share that the program has accelerated. The SADD portion of the Phase I-II clinical trial has completed dosing, and we have initiated the MADD portion of the study.
Speaker Change: In the MADD, we will be collecting both safety and efficacy data. The primary endpoint is safety, and the secondary endpoint is the change from baseline in the splicing index on muscle biopsy.
Speaker Change: We are excited about the progress and potential for VX670 and look forward to providing updates on this program as it advances. With that review of the R&D highlights, I'll now turn it over to Stuart for a commercial update.
Stuart Arbuckle: Once again, we delivered strong results in CF as we further grew the number of eligible patients taking our CFTR modulators in both the US and outside the US.
Stuart Arbuckle: We have made rapid regulatory and reimbursement progress with our CF therapies.
Speaker Change: Notably, CAF TRIO now has regulatory approval and reimbursed access in every single country in the EU.
Speaker Change: We expect sustained revenue growth in CF over the short, medium and long term. In the near term, we remain focused on reaching more eligible patients around the globe with our currently approved medicines.
Speaker Change: We anticipate the launch of our Vanzikafter Triple Combination Therapy will drive further growth in CF.
Speaker Change: We expect this new treatment option, if approved, will be of interest both to those patients on a CFTR modulator and the more than 6,000 patients who have discontinued one of our current CFTR modulators.
Speaker Change: And longer term, the potential successful development of VX522 for the more than 5,000 people with CF who do not respond to CFTR modulators would drive additional growth in CF.
Speaker Change: Now turning to CASGEVI, our transformative one-time therapy for patients with sickle cell disease and beta thalassemia.
Speaker Change: Castievi has been enthusiastically received by patients, physicians and policy makers and the launch is gathering momentum across all regions.
Speaker Change: Two important markers of our launch progress are ATC activations and patient cell collections.
Speaker Change: On ATC activation, we now have 45 authorized treatment centers, up from just over 35 in Q2, and are well on our way to our goal to activate approximately 75 total ATCs globally.
Speaker Change: On patient cell collections, approximately 40 patients have already had at least one cell collection, up from approximately 20 as noted on our Q2 call.
Speaker Change: We've also now had the first commercial patients receive their infusions of Keshevi.
Speaker Change: On the payer landscape, we continue to work to secure access for patients.
Speaker Change: Coverage has not been a significant obstacle to patient access for this life-changing therapy in the U.S.
Speaker Change: And we were very pleased that in the UK, a positive coverage agreement for TDT was reached in September with NHS England, less than six months after regulatory approval.
Speaker Change: Furthermore, we have now also entered into commercial discussions with the NHS to secure access for sickle cell disease patients.
Speaker Change: We also continue to make exciting progress on the regulatory front, with approvals in the quarter for both sickle cell disease and TDT in Switzerland and Canada.
Speaker Change: And in the Middle East, we anticipate Castievi regulatory submissions in Kuwait and the United Arab Emirates by the end of this year.
Speaker Change: Given our confidence in the growing patient demand we are seeing for Castievi, we are investing in additional manufacturing capacity and in September we were pleased to attain approval for a third manufacturing facility for Castievi with our partner Lonza.
Speaker Change: We are focused on a strong finish to the year for Castievi. We continue to see high interest levels and recognition of the value of Castievi among patients, physicians, governments and other stakeholders. And we remain confident in our view that Castievi represents a multi-billion dollar opportunity as it helps more and more patients around the world.
Speaker Change: We have built a strong foundation for this transformational therapy, and we look forward to the momentum it will carry into 2025.
Speaker Change: Shifting now to Sazetogene in acute pain as we are approximately three months from our U.S. PDUFA date and potential launch.
Speaker Change: Our field teams are fully hired and trained, and we are launch ready.
Speaker Change: Suzette Eugene has the potential to provide a transformative treatment option for the 80 million people who seek a prescription therapy for moderate to severe acute pain each year in the US. And in doing so, we believe we will have the opportunity to build another multi-billion dollar franchise for Vertex.
Speaker Change: This was underscored by a recent nationwide survey we commissioned.
Speaker Change: The state of pain survey included responses from more than 500 providers and 1,000 patients and highlighted the significant challenges with current moderate to severe acute pain treatment.
Speaker Change: 78% of the healthcare providers surveyed expressed concerns over the side effects of opioids and potential for developing addiction when treating patients for acute pain.
Speaker Change: Additionally, nearly 90% of providers reported that the risk of side effects of existing therapies limits their ability to treat acute pain adequately.
Speaker Change: And two-thirds of patients indicated they would request a non-opioid option if they experience acute pain again.
Speaker Change: These survey findings were similar to sentiments relayed in our conversations with anesthesiologists and pain specialists at the recent ASA annual meeting, where our Phase III results were well received.
Speaker Change: confirming our belief that physicians are eager for a new therapeutic option to fill the gap between NSAIDs and opioids.
Speaker Change: The views expressed in the state of pain survey and at ASA are not surprising given the tragic statistics surrounding opioid use.
Speaker Change: For instance, approximately 10% of acute pain patients treated initially with an opioid will go on to have prolonged opioid use, and 85,000 will develop opioid use disorder within the first year.
Speaker Change: Overall, the costs of the opioid crisis remain stubbornly high, at $180 billion per year.
Speaker Change: $60 billion of this spend is on health care costs, including an estimated $10-20 billion for the health care costs of opioid use disorder that are attributable to opioids initially prescribed for acute pain.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: We are hearing these same survey sentiments directly in our pre-approval information exchange conversations with payers, as well as targeted IDN and hospital formulary decision makers.
Speaker Change: These conversations are going well, and we are working to accelerate both formulary and payer coverage decisions by engaging early to quantify the unmet need and highlight Sazetra Gene's benefit-risk profile.
Speaker Change: Ultimately, our goal is to fundamentally change the way pain is treated.
Speaker Change: Our key commercial focus for Sodetrazine in 2025 is securing broad access and investing to ensure a seamless experience for patients and physicians.
Speaker Change: Therefore, we have made the strategic decision to invest in initiatives that enable smooth, rapid access for patients prescribed susetragine.
Speaker Change: This is critical given the time-bound nature of treating acute pain.
Speaker Change: One key initiative is our work to secure national retail distribution.
Speaker Change: Another initiative is the creation of financial and co-pay assistance programs for patients that will support patient access, give an expected strong demand from physicians and patients ahead of the typical payer coverage timelines.
Speaker Change: This will enable patients who are prescribed cizetrogene to receive the medicine that they and their physician think is right for them.
Speaker Change: Together, these elements of the launch plan will enable us to build a strong base of prescribers that will benefit the acute pain program for the long term.
Speaker Change: Our goal is to maximize the long-term value of the significant innovations in our pain pipeline, including cizeta gene in peripheral neuropathic pain, IV and oral formulations, VX993, NAV1.7s and potential combination therapies.
Speaker Change: We look forward to beginning to deliver on this transformational vision, starting with patients with moderate to severe acute pain post the potential approval of cesetogene in early 2025.
Speaker Change: Finally, we continue to see momentum on the policy front. The No Pain Act, which goes into effect on the 1st of January, 2025, includes an add-on payment for novel, oral, non-opioids when used in the hospital outpatient and ambulatory surgery center settings.
Speaker Change: Furthermore, the proposed Alternatives to Pain Act
Speaker Change: is now co-sponsored by 64 members of Congress.
Speaker Change: from both parties.
Speaker Change: given its logical appeal to equalize branded and generic copays as well as prohibit requirements to step through opioids before a branded non-opioid can be used for Medicare Part D patients.
Speaker Change: Additionally, all 50 states have guidelines limiting opioid use, and approximately one-third of all states require or encourage prescribers to consider non-opioid alternatives.
Speaker Change: Furthermore, there is good momentum, over one-third of states are considering legislation to ensure that patients have equal access to non-opioid options in Medicaid and or state regulated plans.
Speaker Change: To conclude, there has never been a more exciting time to be at Vertex. We continue to drive sustained growth in CF with the anticipated launch of the Vanzacat Triple early next year.
Speaker Change: And we are in a new and exciting era of commercial diversification with the ongoing launch of Castievi in the US, Europe, and the Middle East.
Speaker Change: We are executing our launch preparations for Cizetrogene in acute pain, while looking forward to multiple programs in Phase 3 development, and even more in the early and mid-stage pipeline. I'll now turn the call over to Charlie to review the financials.
Charlie Wagner: Thanks, Stuart. Vertex's excellent Q3 results demonstrate once again our consistent, strong performance and attractive growth profile.
Charlie Wagner: Third quarter 2024 revenue grew 12% year over year to $2.77 billion, with strong growth of 10% in the U.S. and 14% outside the U.S.
Charlie Wagner: Year-to-date revenue of $8.1 billion represents 10% growth over the comparable nine-month period in 2023, including 9% growth in the U.S. and 13% growth outside the U.S.
Charlie Wagner: Reported third-quarter revenue included $2 million from the first patient dosed with Cas-Jevy.
Speaker Change: On the expense front, Q3 2024 combined non-GAAP R&D, acquired IP R&D, and SG&A expenses were $1.08 billion, compared to $993 million in the third quarter of 2023.
Speaker Change: Q3-24 operating expenses include $15 million in AIPR&D charges compared to $52 million in Q3-23.
Speaker Change: Q3-24 non-gap R&D expenses of $764 million increased 5% year-over-year, reflecting ongoing investment in the advancement of our broad R&D portfolio, including multiple clinical trials and the absorption of Alpine Immune Science's expenses, partially offset by the transition of certain costs from R&D to COGS and inventory following Phase 3 clinical successes.
Speaker Change: Within R&D specifically, the Q3 sequential step-up in non-GAAP R&D expenses reflects the advancement of multiple studies, including susetrogene, POVI, and anaxipline in Phase 3 programs, VX993 in Phase 2 acute and peripheral neuropathic pain studies, and our ongoing work in T1D.
Speaker Change: Q3-24 non-gap SG&A expenses of $300 million increased 39% versus prior year, primarily as a result of investments in the commercial organization, including launch activities for Casjevi and onboarding of the full field force for susetragine in acute pain.
Speaker Change: We reported third quarter 2024 non-GAAP operating income of $1.31 billion, compared to $1.17 billion in Q3'23.
Speaker Change: Our non-GAAP tax rate for the quarter was 19.8% in line with the 19.4% reported in Q3-23.
Speaker Change: We ended the quarter with $11.2 billion in cash and investments. We deployed over $300 million of cash in the third quarter to repurchase 640,000 shares. And year-to-date, we have deployed over $750 million to repurchase over 1.7 million shares.
Speaker Change: Now switching to guidance. We are raising our 2024 total product revenue guidance. With one quarter remaining in the year, we have strong line of sight to a revenue range of $10.8 to $10.9 billion, representing 10% revenue growth at the midpoint at current exchange rates.
Speaker Change: For Vertex Operating Expenses, our non-GAAP guidance continues to be a range of $4.2 to $4.3 billion in combined R&D and SG&A expenses, which is unchanged from the guidance provided on our last earnings call.
Speaker Change: For acquired IPR&D, we continue to expect approximately $4.6 billion for the year, including the Alpine Asset Acquisition Charge recorded in the second quarter.
Speaker Change: Given that the Q2 2024 Alpine AIP R&D charge was not deductible for tax purposes, we expect a non-GAAP full year 2024 tax rate of approximately 90%.
Speaker Change: Aside from the impact of the non-deductible Alpine AIP R&D charge, our underlying full year 2024 non-GAAP effective tax rate would have remained in the range of 20 to 21 percent. As a result, the fourth quarter non-GAAP tax rate is also expected to be 20 to 21 percent.
Speaker Change: In closing, Vertex posted excellent results yet again as we delivered double-digit revenue growth, advanced our Cast Jevy launch, prepared for important, anticipated regulatory approvals in early 2025, progressed our pipeline to be in four Phase III studies, and continued to develop our mid- and earlier-stage pipeline.
Speaker Change: These and other anticipated milestones of continued progress in multiple disease areas are detailed on slide 19. We look forward to updating you on our progress on future calls, and I'll now ask Susie to begin the Q&A period.
Susie Lisa: We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: And to withdraw your question, please press star, then two, and at this time we'll pause momentarily to assemble our roster.
Speaker Change: And the first question will come from Jessica Fye with J.P. Morgan. Please go ahead.
Jessica Fye: Hey guys, good evening. Thanks for taking my question and congrats on the POVA tests updated at ASN.
Speaker Change: I believe you're targeting an at-home monthly dosing profile for that product, but we noticed the phase 3 Rainier trial involves post-dose monitoring.
Speaker Change: Can you talk about the work you would need to do in order to get this approved for at-home delivery? Do you need to run, like, a human factors trial, some bridging study? And could all of that be accomplished maybe during an open-label extension portion of the trial so that the product could launch with at-home dosing? Thank you.
Speaker Change: Hey Jess, let me take that question. This is Reshma. Thanks very much for the kind words. Yeah, we were very excited about the results that we showed at ASN, not only on proteinuria, but the emerging GFR results, as well as the results on hematuria, and then of course the the results in a related but separate B cell mediated condition called membranous nephropathy.
Speaker Change: You're right, in the current protocol, there is an injection that's administered by a healthcare professional in the office.
Speaker Change: And as would be expected and is conventional in biologics development, we fully expect and are planning for and have had all of our regulatory interactions.
Speaker Change: to have Povitacicept ready to be delivered.
Speaker Change: at home, monthly, for commercial approval. So yep, all those plans are in place and we fully expect that for commercialization. It'll be at home, monthly, small volume, subcutaneous administration.
Speaker Change: Thank you.
Speaker Change: You bet.
Speaker Change: The next question will come from Salveen Richter with Goldman Sachs. Please go ahead.
Salveen Richter: for the drug versus baseline but also versus placebo recognizing that you're not
Salveen Richter: Powered on this front just in order to kind of decide to move forward into this phase three and Separately if you could just help us understand the confidence in defining this patient population
Salveen Richter: for your trial. Yeah.
Speaker Change: Sure thing.
Speaker Change: Obviously, we're looking for a good safety profile, so we're looking at the safety, but I think your question really pertains to efficacy.
Speaker Change: So on efficacy, it's a measurement within group of the VX548.
Speaker Change: NPRS score baseline to 12 weeks. We're looking for that number to be statistically significant.
Speaker Change: We're also looking for the magnitude, the sheer number of that NPRS score, the magnitude of that treatment effect.
Speaker Change: Same thing for the placebo arm. We're looking for the magnitude of that treatment effect. And as you rightfully pointed out, we did not power the study to be able to measure the change from baseline 548 versus placebo, because that's what we intend to do in the phase three study. We need the magnitude of these treatment effects so that we can appropriately size the phase three trial, assuming phase two is positive.
Speaker Change: With regard to the confidence in the trial, as I said before the results were available for the acute phase 2 and then phase 3, the DPN phase 2, and now as we await the LSR data, I have high confidence and that comes from three places. One is the mechanism of action.
Speaker Change: Two is the building body of clinical evidence, not only in acute pain and DPN from 548, but the predecessor molecule, VX150. And one thing that you asked directly about, which is the selection of patients.
Speaker Change: The LSR study was designed to think through...
Speaker Change: what the placebo effect might be, to make sure that sites were appropriately trained, to make sure that we selected patients who really had...
Speaker Change: LSR, lumbosacral radiculopathy, and we've done that carefully through patient selection on physical exam, which is really the best way to identify these patients. So I have high confidence based on all three of those factors, including the patient selection.
Speaker Change: Thank you.
Speaker Change: The next question will come from Harris Flynn with Morgan Stanley. Please go ahead.
Speaker Change: Hi, good evening. This is Chris Ahn for Terence. Thanks for taking our questions. Just one question on Susie. We know that you won't comment directly on its pricing, but can you provide some of the inputs that you are considering as you make decision on how to price the drug? Thank you.
Speaker Change: Absolutely. Stuart?
Stuart Arbuckle: Yeah, Chris, we're going to be taking into account the same considerations we always do for all of our medicines, and that's driven by the level of clinical benefit that we believe cizeta gene
Stuart Arbuckle: delivers and also the unmet need that it is solving both at an individual patient level but as importantly at a societal level and we'll be taking all of those inputs into account and making our pricing decision much closer to the approval time.
Speaker Change: Thank you.
Speaker Change: The next question will come from Mohit Bansal with Wells Fargo. Please go ahead.
Mohit Bansal: Great. Thank you very much for taking my question. I would ask another question on LSR.
Mohit Bansal: If you look at...
Mohit Bansal: versus VX548, and how direct VX548 versus Lyrica. And Lyrica also, if you look at some of the subgroup analysis where people looked at neuropathic pain specifically, it does seem to have some impact in neuropathic pain.
Mohit Bansal: Can you confirm that, even in LSR-related neuropathic pain, can you confirm that? Thank you.
Speaker Change: Sure. So, Mohit, you asked some really good questions about
Speaker Change: Gabapentin or Gabapentinoids, so Lyrica is an example of that, versus Sucetrogene. Let's tackle mechanism of action first.
Speaker Change: The mechanisms of action are completely different.
Mohit Bansal: So the gabapentinoids work because they are, they were discovered and developed originally as anti-epileptic medicines, and what they do is depress the central nervous system. That's how those medicines work. It doesn't really have anything to do with pain, neuropathic pain or otherwise.
Mohit Bansal: The way that the Sucetra gene molecule, or VX548, works is it specifically acts on NAV1.8 channels that are specifically found in C fibers that are only in the peripheral nervous system.
Mohit Bansal: And the reason for...
Mohit Bansal: The confidence based on mechanism of action, again, when we were waiting for the acute pain results and the DPN results and the same confidence.
Mohit Bansal: Frankly, here, as we wait for LSR results, is because of that very specific mechanism of action. Pain signals, the way we feel pain, is by way of the action potential being propagated by what are called these NAV channels. So that's on the mechanism of action.
Mohit Bansal: On Lyrica and where did they have positive results, I can speak to the high level of gabapentinoids, and the gabapentinoids have had positive results, and as you know, they are indicated for diabetic peripheral neuropathy.
Mohit Bansal: However, they did not have positive results for LSR.
Mohit Bansal: Now, it is entirely possible that in some studies or in some subgroups there could have been some signal, but I won't comment on that. I will tell you that it is not approved in the U.S. for LSR.
Speaker Change: Helpful. Thank you.
Mohit Bansal: Sure thing.
Mohit Bansal: The next question will come from Tazin Amin with Bank of America. Please go ahead.
Tazin Amin: Hi, guys. Good evening. Thanks for taking my questions.
Tazin Amin: DPN, for example, which I think is reading out next year.
Tazin Amin: And then secondly, I did want to ask about news from a competitor, Orion Corporation, I believe recently announced that it's now 1.8.
Mohit Bansal: They said in the press release due to a narrow therapeutic window, was curious if there was any kind of interpretation to make from that molecule not moving forward given the similarity and mechanism of action.
Speaker Change: Let's take on the question you asked about the molecule that was discontinued.
Speaker Change: It doesn't surprise me, and I won't comment directly on that molecule, but the reason I say it doesn't surprise me is that many, many companies have worked for many, many years if not decades
Mohit Bansal: to try and tackle NAV 1.7 and NAV 1.8, including ourselves.
Mohit Bansal: And the challenge has long been, well, let me start with the reason people have been targeting NAVSAT 1718. Many people call it the holy grail of potential targets in pain conditions because it is so specific to the transmission of pain.
Mohit Bansal: The challenge has been that the NAV 1.1 through NAV 1.9 channels
Mohit Bansal: are similar.
Mohit Bansal: And as people have tried to discover drugs that target NAV1.7 or 1.8, they've run into serious challenges in coming up with molecules with specificity, which is why I say I'm not surprised at all.
Mohit Bansal: Our molecule is 40,000-fold more specific. It is very, very specific for the NAV1.8 channel versus anything else.
Mohit Bansal: I'll tackle your second question about how should we think about LSR versus DPN.
Mohit Bansal: Well, the commonality is that they're both types of peripheral neuropathic pain. But no, I wouldn't see any reason to relate the LSR data to the DPN data.
Mohit Bansal: The 5,4,8 same molecule that's already in DPN is in phase 3 development.
Mohit Bansal: We've already had our regulatory interactions. We've completed our end of phase two meetings. We, as I said in my prepared remarks, we are well on our way in terms of the phase three trial screening, enrollment, and dosing, and I don't expect any changes.
Speaker Change: The next question will come from Michael Yee with Jeffries. Please go ahead.
Michael Yee: We are excited about the idea you have 993 as well which is a second compound for NAV 1.8
Michael Yee: I just wanted to understand if there's a significant...
Michael Yee: Benefit other than potency because I don't recall that 548 which PK or exposure limited so I think that you're getting plenty of drug on board.
Michael Yee: And you've already had some pretty good results. So just wanted to understand if 993 just might be more potent.
Mohit Bansal: and significant other properties that would get better on the NAV 1.8 channel in the clinic.
Speaker Change: Our second question is actually a simple one on ApoL1, which I know hasn't been talked about too much here.
Speaker Change: Given the positive regulatory environment that we are seeing,
Speaker Change: I was just wondering if you believe that on the one-year interim you could probably file on UPCR? Just remind us what you've said and what you think you could do on the one-year date. Thank you.
Speaker Change: Yep, sure thing.
Speaker Change: Let me tackle 993 first. Michael, as you know, across our entire portfolio, every single lead asset has a follow-on asset, and that is
Speaker Change: because if it is humanly possible to do better, just like we did in CF, we are committed to be the ones who do so. So one purpose of 993 is in that vein of serial innovation and if we can do better, we're gonna be the ones who do it.
Speaker Change: The second reason specifically is we seek to really be broad in the pain space.
Speaker Change: VX548 cannot be formulated into an IV formulation, 993 can.
Speaker Change: So that's the second reason for 993.
Mohit Bansal: And the third reason is we're making good progress with our NAV 1.7 program. That's still in preclinical development. But as that program progresses, we'd like to identify the best potential.
Mohit Bansal: NAV 1.8 to be used with NAV 1.7.
Mohit Bansal: Whether that's 5, 4, 8, whether it's 9, 9, 3, and or other molecules is a third reason that we're developing 9, 9, 3. So we have the most optionality for the best pairing of the NAV1-7 program, which could be used alone or in combination with NAV1-8.
Mohit Bansal: And then moving to the question on an axipline, this is the program in APOL1-mediated kidney disease. This program is in phase 3 development and we are continuing with the enrollment in this program.
Speaker Change: You asked a really interesting question about the regulatory environment. It does seem to be evolving right in front of our eyes.
Mohit Bansal: here in renal medicine, particularly in
Mohit Bansal: We had our End of Phase II meeting with the regulators some time ago, so before the more recent discussions in FSGS, and what we've said in our agreements pertain to...
Mohit Bansal: a potential accelerated approval with a certain number of patients at the one-year time point with an endpoint read on GFR slope.
Mohit Bansal: But it's terrific to see the discussions continue on whether proteinuria in and of itself can be an endpoint for other proteinuric kidney diseases.
Mohit Bansal: Thank you.
Speaker Change: The next question will come from Evan Seigerman with BMO Capital Markets. Please go ahead.
Evan Seigerman: Hi, guys. Thank you so much for taking my question. So, now that you've had a patient go through the full CASH-GEVI commercial process, can you discuss what you've learned about the administration? What went well? What do you have to optimize further? And when do you expect to dose the next patient? Thank you.
Speaker Change: Yeah, sure thing. Let me turn that over to Stuart, Evan.
Stuart Arbuckle: Yeah, Evan, I think I covered much of this on our Q2 call, actually, that, you know, we've learned an awful lot, as you always do.
Stuart Arbuckle: in the real world, as it were, and I think we've learned or reinforced our learnings that we kind of went into, that we know that this is a very big decision for a patient and the physician, but particularly for the patient to make, to embark on what is a lengthy treatment journey.
Stuart Arbuckle: But we know that there is significant enthusiasm for that because there is the potential for lifetime future benefit.
Evan Seigerman: So, we've learned that it is a big decision, and that is taking a lot of time for physicians and patients to have those discussions to want to embark on that journey, and that includes discussions at the beginning, before the cell collection process.
Stuart Arbuckle: begins, but also includes discussions at the end of the process when scheduling the actual Castievian fusion.
Mohit Bansal: Because, obviously, that part of the process entails the patient being an inpatient for a number of weeks, and, obviously, that is a significant disruption to anybody's life.
Mohit Bansal: Take time out from their normal life to go through the the final step in the process
Mohit Bansal: I guess a couple of the other things that we've learned is that authorized treatment centers are also very keen to sign up for the potential to be able to provide CasGevi to their patients. And I'd say the last thing that we've learned is that...
Mohit Bansal: The enthusiasm that payers and policy makers showed when the product was initially approved around the scientific advance that Castievi represents
Mohit Bansal: has really translated into excitement to want to be able to provide this medicine to their their their patients
Mohit Bansal: And we've seen that here in the U.S. where reimbursement is not an access barrier.
Mohit Bansal: to patients initiating.
Mohit Bansal: And we've seen that we've been able to secure reimbursement agreements in, for instance, the UK for TDT. We have early access programs, for instance, in Italy. And also we have good access in Saudi Arabia, which, as we've said before, has a particularly high prevalence of disease. So I say we've learned things.
Mohit Bansal: on all elements, patients, physicians and payers and policy makers and we'll continue to learn as we move forward.
Speaker Change: The next question will come from Phil Nadeau with TD Cowan. Please go ahead.
Phil Nadeau: Good afternoon, congrats on the progress and a question for Stuart as well on susetrogenes commercialization. Stuart, you mentioned in the prepared remarks that contracting discussions are underway and then you also gave, I think, one example of strategic initiatives.
Speaker Change: in the co-pay assistance programs. Could you further characterize the contracting discussions? How are those going? Does insurance understand the need for new non-opiate options? And then in terms of the strategic initiatives, is it mainly around co-pay assistance or are there other strategic initiatives that are also underway?
Speaker Change: Thanks.
Speaker Change: Yeah, Phil, thanks for the question. So I would say that the...
Speaker Change: The conversations with payers are going very well. There is a high degree of appreciation for the unmet need, not surprisingly.
Speaker Change: And there is a lot of enthusiasm for a new treatment option, which has the kind of benefit risk profile that cizetrogene has, you know, the first novel non-opioid medicine for literally decades. So, high level of enthusiasm for it.
Speaker Change: Not surprisingly, you know, payers are aware of just how many patients suffer from acute pain in the United States, and so they are thinking their way through budget impact.
Speaker Change: So we're very early in those discussions, but our focus, and I would like to think theirs, is to make sure that as close as possible to approval.
Speaker Change: We can make sure that we have reimbursed access so that physicians and patients can get access to the medicine that they want to use. So I would say those discussions are going very well.
Speaker Change: having reimbursed access as payers have to work through their normal process. And obviously, we're trying to accelerate that, but, you know, we are anticipating there will be some lag for some patients' groups.
Speaker Change: And there you really have two choices. You can kind of accept...
Speaker Change: There's going to be a lack, a gap, sorry, and some patients don't have reimbursed access and so therefore won't get access.
Speaker Change: All you can try and solve that problem while the plans are working on reimbursed access and coming up with their final policies.
Speaker Change: to solve it. We know there's going to be a lot of enthusiasm from physicians and patients to want to try cizetrogene. We want to make sure that we are doing everything we can to make that a seamless experience, even if...
Speaker Change: The plan hasn't yet made a final decision. The one other area I would share with you, which I pointed out, is retail distribution.
Speaker Change: Obviously, patients in acute pain can't wait.
Speaker Change: And so when they turn up at a retail pharmacy with a prescription for Cizetrogene, that Cizetrogene needs to be there on the shelf so that the pharmacist can dispense it. And so one of the other areas that we are spending a lot of time focused on is ensuring there's national retail distribution of Cizetrogene, again, as close as possible to approval as we can.
Speaker Change: So that's a couple of areas that we are working on. That's helpful. Thank you.
Speaker Change: The next question will come from Debjit Chatterjee with Guggenheim Partners. Please go ahead.
Debjit Chatterjee: Hey, good evening and thank you for taking my questions, which is on Anaxaplen. Given the recent traction, when should we expect enrollment completion? And additionally, given the historically low compliance rates for antihypertensives, how big could Anaxaplen be in the growing vortex renal franchise? Thank you so much.
Speaker Change: Hey Devjit, this is Reshma. I'll turn over to Stuart to give you a sense of the commercial opportunity here. With regard to enrollment completion, we haven't given guidance on that and I'm going to leave it at that for now. I will just remind Devjit that there's two enrollments to be aware of. One is enrollment to get us to the time point for accelerated approval and then second is the enrollment for the completion of the full study.
Speaker Change: Obviously, it's going to be faster to get to the enrollment number, which we also haven't shared, but it's a subset of the overall enrollment for the accelerated enrollment time point.
Speaker Change: Stuart, do you want to comment a little bit on commercial opportunity for Inoxaplin? WG points out that there is a large growing renal franchise here.
Stuart Arbuckle: Yeah, so in terms of commercial potential we know that there is approximately 100,000 or so patients living with AMKD between the US and Europe, the vast majority of which
Stuart Arbuckle: are here in the United States. So there is a very, very significant commercial opportunity.
Speaker Change: If we can deliver on the first product, which is actually treating the underlying cause of disease for these patients.
Speaker Change: I say there are about 100,000 or estimate to be about 100,000 patients living with the disease.
Speaker Change: Many of them are undiagnosed and not genotyped at this point in time, given...
Speaker Change: the fact that the gene was only discovered approximately 14 years or so ago and so this is a very new disease. So obviously this is going to require a large amount of disease awareness.
Speaker Change: increases in diagnosis and certainly genotyping, and we are already supporting initiatives like that. But in terms of total potential, as I say, over 100,000 patients, and therefore we think Inaxiplin has a multi-billion dollar opportunity ahead of it.
Speaker Change: The next question will come from Olivia Brayer with Cancer Fitzgerald. Please go ahead.
Olivia Brayer: Hi, good afternoon. Thank you for the question. I wanted to follow up on LSR. What's the internal bar for actually moving VX548 into a registrational program? Do you need to see a certain delta versus what the placebo arm shows at 12 weeks?
Olivia Brayer: or would a faster separation in the initial first few weeks on treatment versus placebo actually be enough of a signal to take it forward? I guess what I'm asking, right, is if those two curves were to come together at the end of 12 weeks.
Olivia Brayer: what kind of signal would be enough to move it forward, if that makes sense.
Speaker Change: Thank you.
Olivia Brayer: Hey, Olivia, this is Greyshma. I really do understand the question.
Speaker Change: What I said earlier, I think, is the best way to understand what we're looking for. We're looking for good safety, and we're looking for the magnitude of the treatment effect.
Speaker Change: in the 548 arm and the magnitude of the treatment effect in the placebo arm. You're very right to point out that there's going to be consideration that we give to when the curves separate. We're going to look at all of the details of the NPRS score. We're going to look at subgroups. We're going to do all of the things that you would expect us to do. The key point is we want to see the magnitude of the treatment effect so we can appropriately size that phase three trial assuming that the data are supportive.
Speaker Change: As I said before, it's not too much longer that we have to wait, and then once we have the data, we'll certainly be able to talk in a very fulsome manner about exactly what the basis of our decision-making is and talk further about the potential phase 3 study.
Speaker Change: Olivia, I'll just use this moment to correct on the question that...
Speaker Change: I think it was Mohit who asked earlier. It could have been Tazeem. It is 30,000-fold more sensitive to NAV1A than anything else. I said 40,000. And we can go on to the next question then.
Speaker Change: Chuck, this will be our last question, please.
Chuck: Yes, ma'am. Our last question for today will come from Ms. Liisa Bayko with Evercore ISI. Please go ahead.
Liisa Bayko: Hi, thanks for squeezing me in. I was curious to follow up on something that Stuart had indicated earlier, and that was the anticipation of no prior authorization for Suzetra gene. And kind of what are the factors that you can influence that can decide that, and how confident are you that will be the case? Because that seems, you know, we did a doc call, and it seems like...
Speaker Change: The kind of, you know, kind of no barriers to getting drug is really critical and seems like this would be a really key one and you kind of honed in on it, so curious how confident you are, what levers you have there, thanks.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: Maybe you could comment both on the policy front and the other work that you're doing on the commercial front.
Speaker Change: Yeah, so Liisa, thanks for the question.
Speaker Change: So on the policy side of things, we've already seen that there are...
Speaker Change: for Brands vs. Generics could be a barrier to Sozetogene being launched, which is why
Speaker Change: We referred to the Alternatives to Pain Act, which is looking to prohibit exactly that sort of thing for our Medicare Part D beneficiaries.
Speaker Change: In our discussions with the other plans that we are talking to through our pre-approval information exchanges, that is one of the topics that we are talking about. Obviously, there is the level of unmet need.
Speaker Change: Obviously, we are able to talk in a compliant way about the benefit-risk profile of Cis-X gene, but we are also talking about what are some of the conditions.
Speaker Change: which people might seek to use to provide reimbursed access.
Speaker Change: Obviously, different providers and plans have different controls. Often prior authorizations are required even if they aren't combined with other types of controls. So, for instance...
Speaker Change: I could still imagine somebody needing to have a prior authorization for a cizeta gene prescription, certainly before a plan has made a definitive coverage decision.
Speaker Change: What I couldn't imagine is somebody having a prior orth, which requires a patient to step through a generic opioid before getting to cizetrogene.
Speaker Change: So, I don't think there's really one answer to your question, Liisa, because, you know, prior auths are used...
Speaker Change: in very, very different ways, but we are looking to make it as easy as possible for physicians and patients, because we know there is going to be such broad enthusiasm for Cezetogene when it's approved, hopefully in the early part of 2025.
Speaker Change: Thank you.
Speaker Change: This will conclude our question and answer session as well as our conference call for today.