Q3 2024 Geron Corp Earnings Call
It will be a question and answer session. If you would like to ask a question. During this time. Please press star one on your telephone keypad I would now like to turn the conference over to Erin Feingold, Vice President of Investor Relations and corporate Communications you may begin.
Good morning, everyone and welcome to the <unk> Corporation third quarter 2024 earnings Conference call I Am Erin Feingold, Jarrod August Vice President of Investor Relations and corporate communications.
Hello, and welcome to the JAROM third quarter 2024 earnings call. All 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. If you would like to ask a question during this time, please press star 1 on your telephone keypad. I would now like to turn the conference over to Aron Feingold, Vice President of Investor Relations and Corporate Communications. You may begin.
And today by several members of <unk> management team, Dr. John Scarlett, Chairman and Chief Executive Officer, Michelle Robertson Executive Vice President and Chief Financial Officer, Jim Ziegler Executive Vice President and Chief Commercial Officer, Dr. Pei seller executive Vice President and Chief Medical.
Good morning, everyone. Welcome to the Geron Corporation Third Quarter 2024 Earnings Conference Call. I am Aron Feingold, Geron's Vice President of Investor Relations and Corporate Communications.
Officer and Dr. Andrew <unk> Executive Vice President and Chief operating Officer.
Before we begin please note that during the course of this presentation and question and answer session. We will be making forward looking statements regarding future events performance plans expectations and other projections, including those relating to the launch commercial opportunity and therapeutic potential of bright halo anticipated clinical and commercial.
I'm joined today by several members of Geron's management team.
Dr. John Scarlett, Chairman and Chief Executive Officer. Michelle Robertson, Executive Vice President and Chief Financial Officer.
Jim Ziegler, Executive Vice President and Chief Commercial Officer, Dr. Faye Feller, Executive Vice President and Chief Medical Officer, and Dr. Andrew Grethlein, Executive Vice President and Chief Operating Officer.
And related timelines, the sufficiency of Jeroen financial resources and other statements that are not historical facts actual events or results could differ materially. Therefore, I refer you to the discussion under the heading risk factors in <unk>. Most recent periodic report filed with the SEC, which identifies important factors that could cause.
Speaker Change: Before we begin, please note that during the course of this presentation and question and answer session, we will be making forward-looking statements regarding future events, performance, plans, expectations, and other projections, including those relating to the launch, commercial opportunity, and therapeutic potential of Ritello, anticipated clinical and commercial events and related timelines, the sufficiency of Geron financial resources, and other statements that are not historical fact. Actual events or results could differ materially.
Speaker Change: Cause actual results to differ materially from those contained in the forward looking statements and our future updates to those risk factors Gerald undertakes no duty or obligation to update our forward looking statements with that I will turn the call over to chip.
Chip: Thanks, Erin good morning to everybody on the call. Thanks for joining us today.
Therefore, I refer you to the discussion under the heading Risk Factors in Geron's most recent periodic report filed with the SEC, which identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statements and our future updates to those risk factors.
Chip: Following FDA approval and commercial launch of <unk>, our first in class former Ixia inhibitor.
Speaker Change: This has been a transformative year for Jerome.
Speaker Change: As a result, we believe we're well positioned to build long term commercial value with this product.
And our first full quarter on the market in the United States, we achieved $28 $2 million and bright total net product revenue.
Speaker Change: Jaron undertakes no duty or obligation to update our forward-looking statement. With that, I'll turn the call over to Chip. Chip?
Speaker Change: Each exceeded our expectations.
Chip: Thanks, Aron. Good morning to everybody on the call. Thanks for joining us today.
Speaker Change: The initial quarter of product revenue speaks to our execution as a commercial company as well as the high unmet need in lower risk Mds and the compelling value proposition, a bright halo for hematologists and patients.
Chip: Following FDA approval and the commercial launch of Ritello, our first-in-class telomerase inhibitor, this has been a transformative year for Geron. As a result, we believe we're well-positioned to build long-term commercial value with this product.
Speaker Change: This gives us confidence in future continued demand and momentum for <unk>.
Speaker Change: Our strong IP position underlies the long term commercial value proposition for Greg how will we.
Chip: In our first full quarter on the market in the United States, we achieved $28.2 million in Ritello Net Product Revenue.
Speaker Change: We believe this IP position, including specific claims in our patents covering the indication that's in our FDA label.
which exceeded our expectations.
Chip: The initial quarter of product revenue speaks to our execution as a commercial company, as well as the high unmet need in lower risk MPS, and the compelling value proposition of Rytelo for hematologists and patients.
Speaker Change: Buttressed by the FDA has granted orphan drug exclusivity for low risk Mds into June of 2031 will provide exclusivity in the United States through August of 2037.
This gives us confidence in future continued demand and momentum for Rytelo.
Speaker Change: Today, our primary focus is on continuing to deliver on the initial success, we achieved in the third quarter getting rates how are the more eligible lower risk mds patients and maximizing our opportunity in the U S market.
Chip: Our strong IP position underlies the long-term commercial value propositions for Ritello.
Chip: We believe this IT position, including specific claims and our patents, covering the indication that's in our FDA label and buttressed by the FDA's grant of orphan drug exclusivity for lower risk MDFs, into June of 2031
Speaker Change: In Europe, we believe that the <unk> review of our rates Hello, marketing authorization application in lower risk Mds could be completed in late 2024 or early 2025.
Chip: will provide exclusivity in the United States through August of 2032.
Speaker Change: With potential EU approval in the first half of 2025.
Today our primary focus is on continuing to deliver on the initial success we achieved in the third quarter, getting Ryteller to more eligible lower-risk MDS patients and maximizing our opportunity in the US market.
Speaker Change: Subject to receiving this approval we are continuing to prepare for the potential launch of <unk> in the EU.
Speaker Change: We're planning to commercialize <unk> in select EU markets beginning in 2026.
Speaker Change: As all of you know, Jim Ziegler joined US as Chief commercial officer in early September.
Speaker Change: In Europe, we believe that the CHMP review of our Rytelo Marketing Authorization application in lower-risk MDS could be completed in late 2024 or early 2025, with potential EU approval in the first half of 2025.
Jim hit the ground running and on this call we will provide more color on the third quarter U S commercial launch performance.
Speaker Change: Key imperatives for our continued success in our next steps and preparing for potential EU commercialization.
Speaker Change: Subject to receiving this approval, we're continuing to prepare for the potential launch of Ritello in the EU.
Speaker Change: In addition to this quarter's strong commercial performance. We were pleased to announce this morning, a completion of both the synthetic royalty transaction and a debt financing transaction that together generated $250 million in gross proceeds.
Speaker Change: As all of you know, Jim Ziegler joined us as Chief Commercial Officer in early September.
Speaker Change: Jim hit the ground running and on this call we'll provide more color on the third quarter U.S. commercial launch performance, key imperatives for our continued success, and our next steps in preparing for potential EU commercialization.
Speaker Change: These transactions were comprised of $125 million capped synthetic royalty with royalty pharma.
Speaker Change: And the $250 million committed senior secured debt facility with funds managed by Pharmacon advisors.
Speaker Change: In addition to this quarter's strong commercial performance, we were pleased to announce this morning a completion of both the synthetic royalty transaction and a debt financing transaction that together generated $250 million in gross proceeds.
Under which we borrowed $125 million.
Allowing us to retire existing debt.
Speaker Change: With this new debt facility, we also have access to an additional $125 million.
Speaker Change: We believe that the favorable terms, we achieved in these transactions reflect the significant commercial potential of bright yellow.
Speaker Change: These transactions were comprised of $125 million capped synthetic royalty with Royalty Pharma and a $250 million committed senior secured debt facility with funds managed by Pharmacomm Advisors.
Speaker Change: And coming off a successful first quarter of commercial launch provide us with critical flexibility to fuel continued growth and investment in our future.
under which we've borrowed $125 million.
Speaker Change: Michelle will provide more details on these transactions and on our Q3 results later on this call.
allowing us to retire existing debt.
Speaker Change: With this new deck facility, we also have access to an additional $125 million.
Speaker Change: Let's move on to our commercial development programs.
Starting with our pivotal <unk> phase III impact MF trial, and JAK inhibitor relapsed refractory myelofibrosis.
We believe that the favorable terms we achieved in these transactions reflect the significant commercial potential of Bright Dello and, coming off a successful first quarter of commercial launch, provide us with critical flexibility to fuel continued growth and investment in our future.
This trial was approximately 70% enrolled as of August 2024.
Speaker Change: Based on the most recent planning assumptions for enrollment and death rates in the trial. We continue to expect an interim analysis in early 2026 as well as the final analysis in early 2007.
Speaker Change: Michelle will provide more details on these transactions and on our Q3 results later on this call.
Let's move on to our commercial development programs.
As the first myelofibrosis phase III trial with overall survival as the primary endpoint.
Speaker Change: Starting with our Pivotal Imitelstat Phase 3 Impact MF Trial and Jack Inhibitor Relapse Refractory Myelofibrosis.
Speaker Change: We believe that if the trial is positive at Intelsat could transform the treatment landscape for this high unmet need patient population with dismal survival.
This trial was approximately 70% enrolled as of August 2024.
Speaker Change: Based on the most recent planning assumptions for enrollment and death rates in the trial, we continue to expect an interim analysis in early 2026, as well as a final analysis in early 2017.
Speaker Change: Representing a substantial commercial opportunity.
Speaker Change: In addition to impact MF, we're exploring the potential of <unk> across multiple different myeloid hematologic malignancies, which were highlighted in ash abstracts that were released earlier this week.
Speaker Change: As the first myelofibrosis phase 3 trial with overall survival as the primary end point.
Speaker Change: I will speak to the new data into our earlier clinical programs later in the call.
Speaker Change: We believe that if the trial is positive, Imitelstat could transform the treatment landscape for this high-end met-need patient population with dismal survival.
Speaker Change: Finally, I'd like to highlight the very significant contributions from our colleagues across the company in these first four months of our launch.
representing a substantial commercial opportunity.
Speaker Change: They executed against our key business objectives with focus and sense of urgency to deliver right tailored to the patients we are committed to help.
Speaker Change: In addition to IMPACT-MF, we are exploring the potential of imitelstat across multiple different myeloid hematologic malignancies.
Speaker Change: We deeply appreciate this commitment as we continue our evolution as a commercial company looking forward to the future.
Speaker Change: which were highlighted in ASHA abstracts that were released earlier this week.
Speaker Change: Faye will speak to the new data and to our earlier clinical programs later in the call.
Jim Ziegler: With that I'll hand, the call over to Jim for a commercial update.
Jim Ziegler: Jim.
Speaker Change: Finally, I'd like to highlight the very significant contributions from our colleagues across the company in these first four months of our launch. They executed against our key business objectives with focus and a sense of urgency to deliver Rytel to the patients we're committed to help.
Jim Ziegler: Thank you chip and good morning, everyone.
Jim Ziegler: I am honored to join <unk> at this important time for the company.
Jim Ziegler: With the U S launch of Rytary, though we have an exciting opportunity to improve the lives of patients with lower risk Mds with transfusion dependent anemia.
Speaker Change: We deeply appreciate this commitment as we continue our evolution as a commercial company, looking forward to the future.
Speaker Change: As chip highlighted we achieved $28 2 million and write Tallo net product revenues in our first full quarter of U S sales in.
Jim Ziegler: With that, I'll hand the call over to Jim for a commercial update.
Jim Ziegler: In the first few months of lock demand has increased month over month with Q3 performance exceeding our expectations.
Jim
Jim Ziegler: Thank you, Chip, and good morning, everyone. I am honored to join Jerron at this important time for the company.
Jim Ziegler: Demand from launch through Q3 has come from 388 ordering centers, which represents approximately 45% of our key targeted accounts.
Jim Ziegler: With the U.S. launch of Ritello, we have an exciting opportunity to improve the lives of patients with lower-risk MDS with transfusion-dependent anemia.
Speaker Change: As Chip highlighted, we achieved $28.2 million in Ritello net product revenues in our first full quarter of U.S. sales.
Jim Ziegler: This strong start reinforces the high unmet need and right <unk> clinical profile and first line Esa ineligible and second line plus lower risk Mds.
Speaker Change: In the first few months of launch, demand has increased month over month, with Q3 performance exceeding our expectations.
Jim Ziegler: Our market research indicates treating physicians appreciate vitale, a differentiated clinical profile and 24 week end, one year Red blood cell transfusion independent rates median duration.
Speaker Change: Demand from launch through Q3 has come from 388 ordering centers which represents approximately 45% of our key targeted accounts.
Jim Ziegler: <unk> of Red blood cell transfusion independents and hemoglobin rise.
Speaker Change: This strong start reinforces the high-end MET need in Rytela's clinical profile in first-line ESA ineligible and second-line plus lower-risk MDS.
Jim Ziegler: We believe <unk> strong clinical data support broad utilization across treatment eligible patient subgroups in both community and academic settings.
Speaker Change: Patient access is also critical for adoption and uptake and we have achieved significant payer coverage since approval.
Speaker Change: Our market research indicates treating physicians appreciate Rytela's differentiated clinical profile in 24 week and 1 year red blood cell transfusion independent rates, median duration of red blood cell transfusion independence, and hemoglobin rise.
Speaker Change: <unk> is responsible for approximately 70% of U S covered lives have implemented medical coverage policies for <unk> that are consistent with its FDA label.
Speaker Change: We believe Rytelo's strong clinical data support broad utilization across treatment-eligible patient subgroups in both community and academic settings.
Speaker Change: Clinical trials <unk> and <unk> guidelines.
Speaker Change: Additionally, our permanent J code was issued in October 2024, and becomes effective on one January 2025.
Speaker Change: Patient access is also critical for adoption and uptake, and we have achieved significant payer coverage since approval.
Speaker Change: We believe the permanent J code will streamline billing and reimbursement for centers treating patients with <unk>.
Speaker Change: Payers responsible for approximately 70% of U.S. covered lives have implemented medical coverage policies for Rite-A-Low that are consistent with its FDA label, clinical trials, and or NCCN guidelines.
Speaker Change: I also want to acknowledge questions from investors regarding the trajectory of <unk>.
Speaker Change: Equally right tell a sale as reflected in third party claims data.
Speaker Change: We believe that while these claims data may reflect trends in demand that are directionally consistent.
Speaker Change: Additionally, our permanent J code was issued in October 2024 and becomes effective on 1 January 2025.
Speaker Change: With what we see internally there are caveats around this data when we compare them to our own insights, including incomplete weekly data capture.
Speaker Change: We believe the Permanent J-Code will streamline billing and reimbursement for centers treating patients with Ritello.
Speaker Change: Also we remain in the early stages of launch and continue to expect week to week fluctuations regardless of the source of sales data.
Speaker Change: I also want to acknowledge questions from investors regarding the trajectory of weekly Ritella sales as reflected in third-party claims data.
Speaker Change: We believe Hcp's will continue to utilize right tallow based on our strong label and NCC and guideline.
Speaker Change: We believe that while these claims data may reflect trends and demand that are directionally consistent with what we see internally, there are caveats around this data when we compare them to our own insights, including incomplete weekly data capture.
Speaker Change: Positive payer coverage of <unk>.
Speaker Change: <unk> operations from the field.
Speaker Change: And ongoing market research, including chart reviews.
Speaker Change: To deliver steady growth, we must execute on several key imperatives, including.
Speaker Change: Also, we remain in the early stages of launch and continue to expect week-to-week fluctuations regardless of the source of sales data.
Speaker Change: Driving new patients across all eligible segments, particularly in second line.
Speaker Change: Reinforcing the value of an appropriate duration of treatment with HCP.
Speaker Change: We believe HCPs will continue to utilize Ritello based on our strong label and NCCN guidelines, positive payer coverage,
Speaker Change: Educating ACP as an appropriate cytopenia management and leveraging strong payer access supported by the NCC and guideline and the newly approved J code.
Speaker Change: observations from the field, and ongoing market research including chart reviews.
Speaker Change: To deliver steady growth, we must execute on several key imperatives, including
Speaker Change: From our own internal demand sales data, so far that <unk> sales growth trajectory in the fourth quarter continues to be promising.
Speaker Change: driving new patients across all eligible segments, particularly in second line.
Speaker Change: Overall, we remain confident in our launch progress to date.
Speaker Change: reinforcing the value of an appropriate duration of treatment with HCP
Speaker Change: <unk> demand for REIT Tallo.
Speaker Change: <unk> momentum into 2025, and the projected long term growth of the brand.
Speaker Change: educating HCPs on appropriate platypenia management and leveraging strong payer access supported by the NCCN guidelines and the newly approved J-Code.
Speaker Change: Our number one commercial priority is to deliver a strong U S launch.
Speaker Change: We are committed to keeping laser focused on that objective.
Speaker Change: From our own internal demand sales data, so far, the Ritello sales growth trajectory in the fourth quarter continues to be promising.
Speaker Change: We plan to leverage our U S launch experience to also prepare for commercialization and select EU countries in 2026 and beyond.
Speaker Change: Overall, we remain confident in our launch progress to date, continued demand for Ritello, expected momentum into 2025, and the projected long-term growth of the brand.
Speaker Change: Our goal in Europe is to optimize patient access and revenues for <unk> and prioritize countries.
Speaker Change: As chip mentioned subject to receiving regulatory approval, we are preparing to commercialize rights Halo and select EU countries in 2026.
Speaker Change: Our number one commercial priority is to deliver a strong U.S. launch. We are committed to keeping laser-focused on that objective.
Speaker Change: This includes working with experienced third parties, who can provide contracted services, including essential critical path activities such as reimbursement.
Speaker Change: We plan to leverage our U.S. launch experience to also prepare for commercialization in select EU countries in 2026 and beyond.
Speaker Change: S estimates market access and distribution.
Speaker Change: Our goal in Europe is to optimize patient access and revenues for MS-ELSTAT in prioritized countries.
Speaker Change: In summary, I want to acknowledge the dedicated cross functional teams that jarrod for all their hard work to ensure that eligible U S patients have broad and timely access to right Tyler.
Speaker Change: As Chip mentioned, subject to receiving regulatory approval, we are preparing to commercialize Ritello in select EU countries in 2026.
Speaker Change: I'm inspired by how we have remained focused during this time of transition and I am optimistic in the future.
Speaker Change: This includes working with experienced third parties who can provide contracted services including essential critical path activities such as reimbursement, HTA assessments, market access, and distribution.
Speaker Change: We are very pleased with the strong demand for <unk> across community and academic settings.
Speaker Change: Favorable payer coverage policies and broad utilization across patient segments.
Speaker Change: In summary, I want to acknowledge the dedicated cross-functional teams at Geron for all their hard work to ensure that eligible U.S. patients have broad and timely access to Ritello. I am inspired by how we have remained focused during this time of transition, and I am optimistic in the future.
Speaker Change: The early launch dynamics reinforce our expectations for continued demand and promising growth.
Michelle Robertson: With that I'll turn the call over to Michelle for a financial update.
Speaker Change: Michelle.
Michelle Robertson: Thanks, Tim and good morning, everyone for detailed Q3 2024 financial results. Please refer to the press release, we issued this morning, which is available on our website.
Speaker Change: We are very pleased with the strong demand for Ritello across community and academic settings.
favorable payer coverage policies, and broad utilization across patient segments.
Michelle Robertson: We are pleased with our commercial performance this quarter and with procuring the synthetic royalty and debt financing announced this morning.
Speaker Change: These early launch dynamics reinforce our expectations for continued demand and promising growth. With that, I'll turn the call over to Michelle for a financial update. Michelle?
Michelle Robertson: I'll bring your attention to key Q3 financial results and then discuss the new royalty, including the term loan agreement.
Speaker Change: As of September 32024, we had approximately $378 $9 million in cash cash equivalents restricted cash and marketable securities on a pro forma basis, including gross proceeds from the upfront payment under the royalty pharma agreement and the first tranche of the Pharmacon loan and after repayment of our existing debt.
Michelle Robertson: Thanks, Jim, and good morning, everyone. For detailed Q3 2024 financial results, please refer to the press release we issued this morning, which is available on our website.
Michelle Robertson: We are pleased with our commercial performance this quarter and with securing the synthetic royalty and debt financings announced this morning.
Speaker Change: Approximately $542 $4 million in cash cash equivalents restricted cash and marketable securities as of September 32024.
Speaker Change: I'll bring your attention to key Q3 financial results and then discuss the new Royalty and Senior Term Loan Agreement.
Speaker Change: As of September 30, 2024, we had approximately $378.9 million in cash, cash equivalents, restricted cash, and marketable securities.
Speaker Change: Total product revenue net for the three and nine months ended September 30 was $28 2 million and $29 million, respectively. Total net revenue for the three months from the nine months ended September 32024 was $28 3 million and $29 5 million, respectively compared to 164200.
Speaker Change: on a pro-forma basis, including gross proceeds from the upfront payment under the Royalty Farmer Agreement.
and the first tranche of the Pharmacon Loan.
Speaker Change: And after repayment of our existing debt, we had approximately $542.4 million in cash
Speaker Change: 14000 for the same periods in 2023.
Speaker Change: The increase in revenue is due to product revenue from U S sales of rise tallow, which was available for prescribers to order from specialty distributors.
Speaker Change: Cash Equivalents, Restricted Cash, and Marketable Securities as of September 30, 2024.
Speaker Change: Total product revenue, net for the three and nine months ended September 30th, was $28.2 million and $29 million respectively.
Speaker Change: June 27 2024.
Speaker Change: Total operating expenses for the three and nine months ended September 30 was $56 5 million or $183 1 million, respectively, compared to $47 8 million or $139 9 million for the same periods in 2023.
Speaker Change: Total net revenue for the three months and the nine months ended September 30, 2024, was $28.3 million and $29.5 million, respectively, compared to $164,000 and $214,000 for the same period in 2023.
Speaker Change: Cost of goods sold was approximately 450470 3000 for the three and nine months ended September 30 of 2024, respectively, which consisted of cost to manufacture and distribute <unk> Hello.
Speaker Change: The increase in revenue is due to product revenue from U.S. sales of Ritello, which was available for prescribers to order from specialty distributors as of June 27, 2024.
Speaker Change: Research and development expenses for the three months and nine months ended September 32024, or $20 2 million from $80 3 million, respectively from $29 4 million and $92 1 million for the same period in 2023.
Speaker Change: Total operating expenses for the three and nine months ended September 30th were $56.5 million and $183.1 million, respectively, compared to $47.8 million and $139.9 million for the same period in 2023.
Speaker Change: The decrease was primarily due to manufacturing and quality costs that were capitalized in the current period through the FDA approval of Brighthouse compared to <unk> expense in the prior period.
Speaker Change: Cost of goods sold was approximately $450,000 and $473,000 for the three and nine months ended September 30, 2024, respectively, which consisted of cost to manufacture and distribute Rytelo.
Speaker Change: Selling general and administrative expenses for the three and nine months ended September 32024 were $35 9 million and $102 4 million, respectively, and $18 4 million and $47 7 million for the same periods in 2023.
Speaker Change: Research and development expenses for the three months and nine months ended September 30, 2024 were $20.2 million and $80.3 million, respectively, and $29.4 million and $92.1 million for the same period in 2023.
Speaker Change: The increase in selling general and administrative expenses, primarily reflect higher commercial launch expenses.
Speaker Change: The decrease is primarily due to manufacturing and quality costs that were capitalized in the current period due to FDA approval of Ritella compared to being expensed in the prior period.
Speaker Change: Increases in headcount and related expenses in connection with the U S launch of <unk>.
Speaker Change: For fiscal year 2024, we expect total operating expenses to be in the range of approximately $260 million to $270 million.
Speaker Change: Selling general and administrative expenses for the three and nine months ended September 30, 2024 were $35.9 million and $102.4 million, respectively, and $18.4 million and $47.7 million for the same period in 2023.
Speaker Change: Finally, we are pleased to announce this morning, the closing of synthetic royalty in depth with two exceptional long term patent royalty pharma and pharma com advises that provide us with access up to $375 million in capital.
Speaker Change: The increase in selling general and administrative expenses primarily reflects higher commercial launch expenses, increases in headcount, and related expenses in connection with the U.S. launch of Ritello.
Speaker Change: Which we have received $250 million in gross proceeds.
Speaker Change: For a detailed overview of the terms of the financing. Please review the press release on form 8-K, we issued this morning available on our website.
Speaker Change: For fiscal year 2024, we expect total operating expenses to be in the range of approximately $260 to $270 million.
Speaker Change: These financing.
Speaker Change: Finally, we are pleased to announce this morning the closing of Synthetic Royalty and Debt Financing with two exceptional long-term partners, Royalty Pharma and Pharmacon Advisors, that provide us with access up to $375 million in capital, of which we have received $250 million in gross proceeds.
Speaker Change: Cash position and further solidify our balance sheet.
Speaker Change: Provide flexibility to invest in our future and reduce considerably our dependence on the equity capital market.
Speaker Change: First we have entered into a synthetic royalty agreement with royalty pharma, which we believe prioritized with cost of capital and maximizes operating flexibility and importantly, our royalty to royalty pharma are capped at 165 times for closing payment of $125 million with royalty pharma received that amount by June 32031.
Speaker Change: For a detailed overview of the terms of these financing, please review the press release and the Form 8K we issued this morning, available on our website.
Speaker Change: These financings strengthen our cash position and further solidify our balance sheet. They provide flexibility to invest in our future and reduce considerably our dependence on the equity capital markets.
Speaker Change: Alright, two times after that date.
Speaker Change: In other words, we retain all sales after the hard cap.
Speaker Change: Our royalty payments will be 775% of net annual U S sales of rights Hello up to $500 million dropping to 3% for sales between $500 million 1 billion on 1% over 1 billion, which we believe are competitive terms for a capped royalty agreement.
Speaker Change: First, we have entered into a synthetic royalty agreement with Royalty Pharma, which we believe prioritizes cost of capital and maximizes operating flexibility.
Speaker Change: Importantly, our royalties to Royalty Farmer are capped at 1.65 times the closing payment of $125 million. If Royalty Farmer receives that amount by June 30, 2031, or two times after that date.
Speaker Change: The agreement allows for optional prepayment of the royalties upon a change in control.
Speaker Change: We believe this royalty agreement is a very clean and flexible structure with no maturity date mandatory repayments are economic ratchet.
Speaker Change: In other words, we retain all sales after the hard cap is reached.
Speaker Change: Our royalty payments will be 7.75% of net annual U.S. sales of Ritello up to $500 million, dropping to 3% for sales between $500 million and $1 billion, and 1% over $1 billion, which we believe are competitive terms for capped royalty agreements.
Speaker Change: In addition to the transaction with royalty pharma, we had entered into a five year senior secured term loan with funds managed by pharma Qantas either for up to $250 million.
Speaker Change: I closing, we drew $125 million under this loan of which means $86 5 million to fully repay our existing loan with Hercules and Silicon Valley Bank, which has now been terminated.
Speaker Change: Additionally, the agreement allows for optional prepayment of the royalties upon a change in control.
Speaker Change: We believe this royalty agreement is a very clean and flexible structure with no maturity date, mandatory repayments, or economic ratchets.
Speaker Change: We have the ability to draw another $125 million by the end of 2025 of which $75 million will be available at our option and the remaining $50 million available at our option subject to reaching a specified revenue threshold.
Speaker Change: In addition to the transaction with Royalty Pharma, we have entered into a five-year senior secured term loan with funds managed by Pharmacon Advisors for up to $250 million.
Speaker Change: The facility contains no scheduled amortization payments with all outstanding principal due at maturity in 2029, and there are no financial covenants.
Speaker Change: At closing, we drew $125 million under this loan, of which we used $86.5 million to fully repay our existing loan with Hercules and Silicon Valley Bank, which has now been terminated.
Speaker Change: The loan bears interest at a variable rate per year equal to 575% plus the three month secured overnight financing rate or sofa subject to a sofa floor of 3%.
Speaker Change: We have the ability to draw another $125 million by the end of 2025, of which $75 million will be available at our option, and the remaining $50 million available at our option, subject to reaching a specified revenue threshold.
Speaker Change: We are very pleased with the completion of the non equity financing transactions on favorable terms.
Speaker Change: Our current operating plans and assumptions, we believe our existing cash cash equivalence and marketable securities, including the upfront payments received under these agreements and the anticipated revenue from U S sales of rights, how long will be sufficient to fund our projected operating requirements for at least the next 12 months from today.
Speaker Change: The facility contains no scheduled ammunition payments, with all outstanding principal due at maturity in 2029, and there are no financial covenants.
Speaker Change: The loan bearer's interest at a variable rate per year equals 5.75% plus the three-month secured overnight financing rate, or SOFR, subject to a SOFR floor of 3%.
Speaker Change: Allowing us to continue supporting commercial lines of <unk> in the U S and potential launch in the EU complete the phase III impact MF trial in relapsed refractory MF.
Speaker Change: We are very pleased with the completion of these non-equity financing transactions on favorable terms.
Speaker Change: Based on our current operating plans and assumptions, we believe our existing cash, cash equivalents, and markable securities, including the upfront payments received under these agreements and the anticipated revenues from U.S. sales of Ritello, will be sufficient to fund our projected operating requirements for at least the next 12 months from today.
Speaker Change: In supply chain redundancy for Rytary and fund our general working capital requirements.
Speaker Change: We believe there are scenarios, where these financing can take us to profitability without raising future equity capital.
Speaker Change: Overall, we believe we're in a very strong capital position to fuel continued growth of U S sales and support critical value driver for our business.
Speaker Change: allowing us to continue supporting commercial launch of Rytelo in the U.S. and potential launch in the EU, complete the phase 3 impact MS trial and relapse refractory MS, invest in supply chain redundancy for Rytelo, and fund our general working capital requirements.
Speaker Change: With that I'll turn the call over to Frank for our medical and clinical update.
Frank: Thanks, Michelle and Hello, everyone I'd like to start by sharing how meaningful it has been for me and my entire team to hear feedback about the impact of <unk> in the commercial setting.
Speaker Change: We believe there are scenarios where these financings can take us to profitability without raising future equity capital.
Frank: It's further motivate our team to develop and deliver an account that for patients with myeloid hematologic malignancies.
Speaker Change: Overall, we believe we're in a very strong capital position to fuel continued growth of U.S. sales and support critical value drivers for our business.
Frank: Just feels medical team has been responding to information requests that support <unk> as they use right Halloween in the commercial setting two particular around education on Cytopenia management and sequencing with other in lower risk Mds treatment.
Faye Feller: With that, I'll turn the call over to Faye for a medical and clinical update. Faye?
Faye Feller: Thanks Michelle, and hello everyone. I'd like to start by sharing how meaningful it has been for me and my entire team to hear feedback about the impact of Britello in the commercial setting. This further motivates our team to develop and deliver a Mattel set for patients with myeloid hematologic malignancies.
Speaker Change: Today, I will focus on our ash abstract released earlier this week, which we believe continue to highlight telomerase inhibition with <unk>, that's a really important and powerful approach to treating myeloid hematologic malignancies.
Speaker Change: For detailed information on the data abstracts. Please see the press release, we issued <unk> available on our website or at the ash update can be the abstract.
Faye Feller: The field medical team has been responding to information requests that support HCPs as they use Ritalo in a commercial setting, in particular around education on cytopenia management and sequencing with other lower-risk MDS treatments.
Speaker Change: First I will cover new analysis, and emerge clinical trial, suggesting that intelsat demonstrates clinical activity in patients with lower risk Mds with transfusion dependent anemia, regardless of prior therapy.
Speaker Change: Today, I will focus on our ASH Abstracts released earlier this week, which we believe continue to highlight telomerase inhibition within the Telstat as an important and powerful approach to treating myeloid hematologic malignancies.
Speaker Change: <unk> 352 accepted as an oral presentation pooled data from emerge.
Speaker Change: For detailed information on the Data Abstracts, please view the press release we issued on Tuesday, available on our website, or visit the AASH website to view the abstracts.
Speaker Change: To date, three and TTC sub study and evaluate the effect of prior treatments, including ethane best Patterson.
Speaker Change: I'll, let Mike and HMA is on the clinical activity across a cushion.
Speaker Change: First, I will cover new analyses from the eMERGE clinical trial suggesting that imidcalc that demonstrates clinical activity in patients with lower-risk MDS with transfusion-dependent anemia, regardless of prior therapy.
Speaker Change: Although we have small numbers in some cases it data on outcome in later lines of treatment.
Speaker Change: We need people to have important clinical implications, suggesting that these patients experiencing RBC transfusion related clinical benefit and improvement in hemoglobin with Intelsat, regardless of their prior treatment history.
Speaker Change: Abstract 352, accepted as an oral presentation, pulls data from eMERGE Phase II, Phase III, and the QTC substudy, and evaluates the effect of prior treatment
Speaker Change: At $45 90 accepted as a poster presentation reports the first efficacy and safety results from.
Speaker Change: including ESAs, Lispatercept, planolidamide and HMAs on the clinical activities across these patients.
Speaker Change: The ventricular repolarization emerge Kiki some study.
Speaker Change: Although we have small numbers in some cases and limited data on outcomes in later lines of treatment, we believe these data have important clinical implications, suggesting that these patients experience an RBC transfusion related clinical benefit and improvements in hemoglobin within the CalSTAT, regardless of their prior treatment history.
Speaker Change: Conducted per FDA guidance.
Speaker Change: As of the data cutoff on May 10, 2024, no clinically meaningful effects within the top that on cardiac repolarization or other ECG parameters were observed.
Speaker Change: So just a couple of months.
Speaker Change: Could you see some study efficacy and safety of aircraft that were comparable to that shown in the overall population again large phase III trial and.
Speaker Change: Abstract 4590, accepted as a poster presentation, reports the first efficacy and safety results from the ventricular repolarization and MERGE QTC sub-study conducted per FDA guidance.
Speaker Change: Notably responses, taking the cost that were seen in patients receiving prior treatments, we're creating with Patterson lenalidomide and HMA.
Speaker Change: As of the data cut-off on May 10, 2024, no clinically meaningful effects of Imiq Health Stat on cardiac repolarization or other ECG parameters were observed, and no new safety signals emerged.
Speaker Change: Third emerge abstract 32, Ken accepted as a poster presentation at.
Speaker Change: Reports on post hoc analyses of the patient reported outcomes or pro population.
Speaker Change: In this QTC substudy, efficacy and safety of Imtelstat were comparable to that shown in the overall population of the eMERGE Phase III trial. And notably, responses to Imtelstat were seen in patients receiving prior treatments, including Lispatercept, lanolidamide, and HMAs.
Speaker Change: By validated measures the functional assessment of chronic illness therapy or facet fatigue.
Speaker Change: Functional assessment in cancer therapy, anemia, or fact, Ann and the quality of life and not anticipation scale our clubs questionnaires.
Speaker Change: The sustained improvement and.
The End
Speaker Change: A third eMERGE abstract, 3210, accepted as a poster presentation, reports on post-hoc analyses of the patient-reported outcomes, or PRO, population as assessed by validated measures, the functional assessment of chronic illness therapy, or FACET fatigue.
Speaker Change: And maintenance the quality of life and anemia.
Speaker Change: Wisdom Intelsat shown in these analyses are meaningful and very encouraging aimed to improve outcomes for these patients.
Speaker Change: At 998 accepted as an oral presentation.
Speaker Change: The first safety results from the dose escalation part one of the phase one improve enough clinical trial.
Speaker Change: functional assessment of cancer therapy anemia or FACT-AN and the quality of life in malodisplasia scale or QAMS questionnaires.
Speaker Change: 13 patients were enrolled as of July 10, 2024.
Speaker Change: The sustained improvement in fatigue and maintenance of quality of life and anemia symptoms within a CalSTAT shown in these analyses are meaningful and very encouraging as we aim to improve outcomes for these patients.
Speaker Change: Ali three patients for each dose level within the cost out and doses of Brookfield nib or an individualized per patient.
Speaker Change: No dose limiting toxicities were observed.
Speaker Change: Events were consistent with those observed in other clinical trials have been helped that.
Speaker Change: Abstract 998, accepted as an oral presentation, reports the first safety results from the dose escalation part one of the phase one IMPROVE-MS clinical trial, in which 13 patients were enrolled as of July 10, 2024.
Speaker Change: The pharmacokinetic profiles of <unk> and the combination study was similar to previous monotherapy.
Speaker Change: These early results support the potential tolerability at the top of that as a combination therapy and could inform our future development.
Speaker Change: At least three patients received each dose level of Imitalstat and doses of Ruxelidnib were individualized per patient.
Speaker Change: Also with regards to improve that math based on the study is safety evaluation team with you up the dose finding data from part one of the studies, we adopted SaaS unanimous recommendation and progressive part two of the study.
Speaker Change: No dose-limiting toxicities were observed, and adverse events were consistent with those observed in other clinical trials of IntelSCAD.
Speaker Change: It's designed to confirm the safety profile of Intelsat nine four milligram per kilogram in combination with recollect NIM.
Speaker Change: The pharmacokinetic profiles of imitelsat and muxalitnib in this combination study were similar to previous monotherapy studies.
Speaker Change: These early results support the potential tolerability of NCELSCAD as a combination therapy and could inform our future development efforts.
Speaker Change: Abstract 32, 22 submitted by Jarrod on collaborators accepted as a poster presentation provides an interim analysis from the phase III impress trial.
Speaker Change: Also, with regards to Improved MS, based on the study's Safety Evaluation Team review of the dose finding data from Part 1 of the study, we adopted the set's unanimous recommendation and progressed to Part 2 of the study.
Speaker Change: Validating the tokbox and patients with high risk Mds or AML risk.
Speaker Change: Refractory relapsing or intolerance to either <unk> or decitabine.
Speaker Change: It is designed to confirm the safety profile of Intelsat nine four milligram per kilogram in combination with buckler.
Speaker Change: That clock plus azacitidine.
Speaker Change: which is designed to confirm the safety profile of the NatalCat 9.4 mg per kg in combination with Brexelid mids.
Speaker Change: In the first part of the trial, none of the six high risk Mds are 17, and now treated patients reached the primary endpoint is that which was scheduled after four cycles of treatment.
Speaker Change: Abstract 32, 22 submitted by Geron collaborators accepted as a poster presentation provides an interim analysis from the phase two impress trial evaluating <unk> in patients with high risk Mds or AML risk.
Speaker Change: Hashtag 3222, submitted by Geron Collaborators, accepted as a poster presentation.
Speaker Change: Short term transient improvement hematological value wasn't observed in individual cases.
Speaker Change: provides an interim analysis from the Phase II EMPRESS trial evaluating methostat in patients with high-risk MDS or AML, refractory, relapsing, or intolerant to either azacitidine or docidabine or venetoclax plus azacitidine.
Speaker Change: And patients on the lower risk Mds dosing schedule of every four weeks and with pulse that showed some anti proliferative effects, including a decline in block and look at that.
Speaker Change: Refractory relapsing or intolerance to either either Friday or decitabine.
Speaker Change: That o'clock plus azacitidine.
Speaker Change: Overall, no new safety signals occurred beyond those already known for Intelsat.
Speaker Change: In the first part of the trial, none of the six high risk Mds.
Speaker Change: In the first part of the trial, none of the six high-risk MDS or 17 AML-treated patients reached the primary endpoint visit, which was scheduled after four cycles of treatment.
Speaker Change: <unk> and <unk> treated patients reached the primary endpoint is that which was scheduled after four cycles of treatment.
Speaker Change: Based on the observations in this first cohort the protocol was amended to a more frequent dosing schedule for a second cohort of patients.
Speaker Change: Short term transient improvement hematological value was observed in individual cases.
Speaker Change: Short-term transient improvement in hematological values was observed in individual cases. In patients on the lower risk MDS dosing schedule of every four weeks, MRS-Telsat showed some antiproliferative effects including a decline in BLAST and leukocyte.
Speaker Change: Now being enrolled and treated with the modified schedule starting in August 2024.
Speaker Change: And patients on the lower risk Mds dosing schedule of every four weeks and with tough that showed some anti proliferative effects, including a decline in block and Luca. Thanks.
Speaker Change: Lastly, abstract 52 submitted by Geron collaborators on accepted as an oral presentation.
Speaker Change: Preclinical data identifying and of course that indeed, proptosis associated with the Doe make alterations in AML cells that correlate with the Macau function and responses in vivo.
Speaker Change: Overall, no new safety signals occurred beyond those already known for Intelsat.
Speaker Change: Overall, no new safety signals occurred beyond those already known for Imitalstat.
Speaker Change: Based on the observations in this first cohort the protocol was amended to a more frequent dosing schedule for a second cohort of patients.
Speaker Change: Based on the observations in this first cohort, the protocol was amended to a more frequent dosing schedule for a second cohort of patients that is now being enrolled and treated with a modified schedule starting in August 2024.
Speaker Change: Mechanistic insights maybe elaborate as to develop an optimized therapeutic strategy using an account that could target the meta clock insider deal with it.
Speaker Change: Now being enrolled and treated with the modified schedule starting in August 2024.
Speaker Change: I'll stop club.
Speaker Change: Lastly, abstract 52 submitted by John collaborators on accepted as an oral presentation.
Speaker Change: I look forward to keeping you updated on our clinical development progress.
Speaker Change: Lastly, Abstract 52, submitted by Geron Collaborators and accepted as an oral presentation, shares preclinical data identifying imitalstat-mediated seroptosis-associated lipidomic alterations in ANL cells that correlate with imitalstat treatment responses in vivo.
Speaker Change: And I will now turn the call back over to chip.
Speaker Change: Preclinical data identifying in itself that indeed, proptosis associated with <unk> operations in AML cells that correlate with the Macau function and responses in vivo is.
Chip: Thanks Fay.
Speaker Change: To close we're obviously very pleased with this quarter's performance and the feedback we're receiving from customers and payers.
Speaker Change: We're confident in our launch trajectory and opportunity for long term growth, while recognizing we're only four months into this launch.
Speaker Change: These mechanistic insights maybe leverage to develop an optimized therapeutic strategy using in house that could target the nine o'clock in <unk> resistant AML Pep club.
Speaker Change: These mechanistic insights may be leveraged to develop an optimized therapeutic strategy using Imitalcept to target the metaclaxis-cytodine-resistant AML subclone.
Speaker Change: We have conviction that <unk> can become part of the standard of care for eligible patients in this high unmet need low risk Mds treatment paradigm and then it can bring differentiated benefits to patients both in the U S and subject to regulatory approval in the EU.
Speaker Change: I look forward to keeping you updated on our clinical development progress.
Speaker Change: I look forward to keeping you updated on our clinical development progress. And I will now turn the call back over to Chip.
Speaker Change: And I will now turn the call back over to chip.
Speaker Change: Thanks Fay.
Speaker Change: Thanks Faye. To close, we're obviously very pleased with this quarter's performance and the feedback we're receiving from customers and payers.
Chip: To close we're obviously very pleased with this quarter's performance and the feedback we're receiving from customers and payers.
Speaker Change: In addition to lower risk Mds. We're also looking forward to the readout of our pivotal phase III impact MF trial in relapsed refractory MF.
Speaker Change: We're confident in our launch trajectory and opportunity for long term growth, while recognizing we're only four months into this launch.
Speaker Change: We're confident in our launch trajectory and opportunity for long-term growth while recognizing we're only four months into this launch.
Speaker Change: We believe that approval of <unk> in lower risk Mds in the EU and a positive outcome. In this MF trial are key milestones that contribute very significantly to the commercial value proposition for <unk> in the future.
Speaker Change: We have conviction that <unk> can become part of the standard of care for eligible patients in this high unmet need low risk Mds treatment paradigm and then it can bring differentiated benefits to patients both in the U S and subject to regulatory approval in the EU.
Speaker Change: We have conviction that Ritello can become part of the standard of care for eligible patients in this high unmet need, low-risk MDS treatment paradigm, and that it can bring differentiated benefits to patients, both in the U.S. and, subject to regulatory approval, in the EU.
Speaker Change: We will now open the line for questions operator.
Speaker Change: Thank you if you have a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star. One again, please ensure that your phone is not on mute when called upon thank you.
Speaker Change: In addition to lower risk Mds. We're also looking forward to the readout of our pivotal phase III impact MF trial in relapsed refractory MF.
Speaker Change: In addition to low-risk MDS, we're also looking forward to the readout of our Pivotal Phase 3 Impact MF Trial in Relapse Refractory MF.
Speaker Change: We believe that approval of <unk> in lower risk Mds in the EU and a positive outcome. In this MF trial are key milestones that contribute very significantly to the commercial value proposition for <unk> in the future.
Speaker Change: We believe that approval of Rytelo in lower risk MDS in the EU and a positive outcome in this MF trial are key milestones that contribute very significantly to the commercial value proposition for Rytelo in the future.
Speaker Change: Your first question comes from the line of Tara Bancroft with TD Cowen Your line is open.
Tara Bancroft: Hi, good morning, and congrats on a great quarter. So given what you have seen this quarter. We were hoping you could give us a better idea of how you think growth cadence could look over the next few quarters or over the next year, but I'm, especially curious how your growth assumptions and and even the ultimate market for Brent Hello factored into that.
Speaker Change: We will now open the line for questions operator.
We'll now open the line for questions. Operator?
Speaker Change: Thank you if you have a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star. One again, please ensure that your phone is not on mute when called upon thank you.
Speaker Change: Thank you. If you have a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure that your phone is not on mute when called upon. Thank you.
Tara Bancroft: The royalty deal thanks.
Speaker Change: Your first question comes from the line of Tara Bancroft with TD Cowen Your line is open.
Speaker Change: Your first question comes from the line of Tara Bancroft with TV Cowan. Your line is open.
Speaker Change: This is chip could you explain a little bit what you mean by what factored into the royalty deal just for the 42 ago.
Tara Bancroft: Hi, good morning, and congrats on a great quarter. So given what you have seen this quarter. We were hoping you could give us a better idea of how you think growth cadence could look over the next few quarters or over the next year, but I'm, especially curious how your growth assumptions and and even the ultimate market for Brent Hello factored into that.
Speaker Change: Hi, good morning and congrats on a great quarter. So given what you have seen this quarter, we were hoping you could give us a better idea of how you think growth cadence could look over the next few quarters or over the next year, but I'm especially curious how your growth assumptions and even the ultimate market for Ritelo factored into the terms of the royalty deal. Thanks.
Speaker Change: Hmm like.
Speaker Change: When you were negotiating the deal how mhm, how where you are.
Speaker Change: Our assumptions for the ultimate market our growth over the next couple of years kind of factored into that.
Speaker Change: Sure.
Speaker Change: Michelle would you like to take them up.
Speaker Change: The royalty deal thanks.
Speaker Change: Sure well I think Tim why don't we have Jim answer her first question, which is just about how we're thinking about growth over the coming quarters, and then I can comment on the structure.
Chip: This is chip could you explain a little bit what you mean by what factored into the royalty deal just for the avoidance of doubt.
Speaker Change: Tara, this is Chip. Could you explain a little bit more what you mean by what factored into the royalty due, just for the avoidance of doubt?
Jim Ziegler: Okay. Good morning, Tim Good luck here, so what we're looking at and expecting is.
Speaker Change: Hmm like.
Mm-hmm. Like.
Speaker Change: When you were negotiating the deal how mhm how were your assumptions for the ultimate market our growth over the next couple of years kind of factored into that.
Speaker Change: When you were negotiating the deal, how were your assumptions for the ultimate market or growth over the next couple of years kind of factored into that?
Jim Ziegler: Steady consistent growth across all of the patients segments, specifically second mine in both Rs negative in the Rs positive.
Speaker Change: Sure.
Sure. Michelle, would you like to take that?
Jim Ziegler: First line Esa ineligible and then of course.
Michelle Robertson: Sure, well, I think, Jim, why don't we have Jim answer her first question, which is just about how we're thinking about growth over the coming quarters, and then I can comment on the structure.
Speaker Change: The relapsed refractory third line plus patients, we're not giving guidance at this point, but we are expecting steady and consistent growth going forward. Thank you.
Speaker Change: Great.
Speaker Change: Good morning, Terry. Jim Ziegler here. So what we're looking at is and expecting is
Speaker Change: Sure I'll take the second one.
Speaker Change: First of all I just want to say that this was an extremely competitive process and we're very happy with the outcome, we used our internal forecast and.
Speaker Change: steady consistent growth across all of the patient segments you know specifically second line in both RS negative and RS positive
Speaker Change: To determine and negotiate the times.
Speaker Change: first-line ESA ineligible, and then, of course, the relapsed or fractured third-line plus patients. We're not giving guidance at this point, but we are expecting steady and consistent grip going forward. Thank you.
Speaker Change: Which we were again very pleased with.
Speaker Change: Okay. Thanks, so much.
Speaker Change: Your next question is from phaseout cursed with Leerink partners. Your line is open.
Great.
Speaker Change: Hey, guys just two questions. If you don't mind first just on the royalty percentage rates can you just clarify sort of how you think investors should be thinking about the royalty rate as well as the.
Speaker Change: Kind of capped multiplier on that I think the rate seems like it starts out a little bit higher than typical royalty deal has been kind of comes lower and then if you guys just clarify your cash flow expectations.
Speaker Change: Sure. Thanks, Scott.
Speaker Change: So I mean, I'm not going to comment on other transactions that have been done with royalty pharma again very competitive.
Speaker Change: We're very happy that it is a capped royalty deal at the $1 six five.
Speaker Change: <unk> achieved by a certain date and so we think that the rate is is competitive from.
Speaker Change: From what we've seen but.
Speaker Change: Again, I think that our focus is on that cap of 165 and based on our current plans and meeting our internal revenue projections.
Speaker Change: Feel pretty confident that we can reach that prior to peak sales.
Speaker Change: Yeah.
Speaker Change: Got it understood its runway yeah on the cash runway as I mentioned in my script, there are scenarios, where we feel that these two transactions.
Speaker Change: Can take us to breakeven again based on our current plan that would mean meeting our internal revenue or opex projections over the next several years.
Speaker Change: And we feel that we could reach breakeven without needing additional equity financing one of our goals of this are these transactions was to not fall below 12 months of cash as I said in Q2.
Speaker Change: And just to clarify these two transactions allow us to maintain 12 months of cash going forward.
Speaker Change: Again based on our current revenue expectations.
Speaker Change: Can take us to breakeven again based on our current plan that would mean meeting our internal revenue or opex projections over the next several years.
Speaker Change: In Opex projections.
Speaker Change: So we're not saying we have 12 months of cash because I know previously we talked about cash into Q2 of 2026, what we're saying is that we can maintain that 12 months of cash which has always been one of our goals not to fall below 12 months.
Speaker Change: And we feel that we could reach breakeven without needing additional equity financing one of our goals of this.
Speaker Change: These transactions was to not fall below 12 months of cash as I said in Q2.
Speaker Change: Yes, It makes sense and then just to clarify your comments.
Speaker Change: And just to clarify these two transactions allow us to maintain 12 months of cash going forward.
Speaker Change: Youre, saying that your kind of internal assumptions are that you kind of trip the multiples.
Speaker Change: Like on the earlier side.
Speaker Change: Based on our current revenue expectations.
Speaker Change: Yes, if we if we meet our current internal revenue projections, yes.
Speaker Change: In Opex projections.
Speaker Change: So we're not saying we have 12 months of cash because I know previously we talked about cash into Q2 of 2026, what we're saying is that we can maintain that 12 months of cash which has always been one of our goals not to fall below 12 months.
Speaker Change: I'm good thank you.
Speaker Change: Your next question is from Corinne Johnson with Goldman Sachs. Your line is open.
Corinne Johnson: Thanks, Good morning.
Speaker Change: Yes, It makes sense and then just to clarify your comments youre, saying that your kind of internal assumptions are that you kind of trip the multiples.
Speaker Change: You did mentioned that you expect to see a steady growth over the coming quarters, but could you clarify a little bit about what that means is that in terms of absolute number of patient growth or the growth rate.
Speaker Change: On the earlier side.
Speaker Change: Yes.
Speaker Change: If we if we meet our current internal revenue projections, yes.
Speaker Change: Just a little clarification would be helpful. There and then in terms of the patients that you are seeing come on to therapy are these primarily second line or third line patients and what portion of them previously seen rubber, though at this stage.
Speaker Change: Okay. Thank you.
Speaker Change: Yes.
Speaker Change: Your next question is from Corinne Johnson with Goldman Sachs. Your line is open.
Speaker Change: Thanks.
Speaker Change: Okay.
Speaker Change: Hey, Jim.
Corinne Johnson: Thanks, Good morning.
Speaker Change: Hi, Julien this is Jim Ziegler.
Corinne Johnson: You did mentioned that you expect to see steady growth over the coming quarters, but could you clarify a little bit about what that means is that in terms of like absolute number of patient growth or the growth rate.
Corinne Johnson: Again, we're not providing guidance, but in terms of.
Corinne Johnson: Our growth what we expect this growth across all patient segments in both the academic and community setting and what we provided on the earnings call is that 388 of our targeted accounts.
Corinne Johnson: Just a little clarification would be helpful. There and then in terms of the patients that you are seeing come on to therapy are these primarily second line or third line patients and what portion of them previously seen Rob with the stage takes.
Corinne Johnson: Have ordered so that's the breadth over time, what we're expecting is obviously to increase the breadth and depth of prescription prescribing.
Corinne Johnson: Okay.
Corinne Johnson: Okay.
Corinne Johnson: Hey, Jim.
Corinne Johnson: Hi, Julien this is Jim Ziegler.
Speaker Change: Marcelo for patients across these accounts I'll just reinforce that we're seeing.
Corinne Johnson: Again, we're not providing guidance, but in terms of.
Corinne Johnson: Our growth what we expect this growth across all patient segments in both the academic and community setting.
Speaker Change: Uptake in utilization across all patient segments, including first line Esa ineligible second line and then third line patients at this point.
Corinne Johnson: What we provided on this earnings call is that 388 of our targeted accounts.
Speaker Change: Okay.
Corinne Johnson: <unk> ordered so that's the breadth overtime, what we're expecting is obviously to increase the breadth and depth of prescriptions and prescribing.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Carter Gould with Barclays. Your line is open.
Corinne Johnson: Marcelo for patients across these accounts I'll, just reinforce that we're seeing uptake in utilization across all patient segments, including first line Esa ineligible second line and then third line patients at this point.
Speaker Change: Good morning, Thanks for taking the questions maybe to start off just one or two housekeeping questions can you spell out any impacts from inventory in the quarter and as well if you're providing patient starts numbers that would be helpful. And then maybe just a follow up on the prior question the breath of centers with ordering is impressive.
Corinne Johnson: Okay.
Corinne Johnson: Yes.
Corinne Johnson: Okay.
Speaker Change: And I guess what im.
Speaker Change: But I guess with our back of the envelope math it does suggest that.
Speaker Change: Your next question comes from the line of Carter Gould with Barclays. Your line is open.
Speaker Change: The depth of prescribing is still very much in its early stages can you talk a little bit about what this implies around how centers are sort of experimenting with the product and then adopting and maybe if that argues against her.
Carter Gould: Good morning, Thanks for taking the questions maybe start off just one or two housekeeping questions can you spell out any impacts from inventory in the quarter and as well. If you are providing patient starts numbers that would be helpful. And then maybe just a follow up on the prior question the breath of centers with ordering is impressive.
Speaker Change: A bolus in any commentary there would be helpful.
Speaker Change: Great. Thanks, Carter Hoffmann, Jim Ziegler again.
Speaker Change: So in terms of inventory typically in buy and bill what we see is between two and four weeks of inventory and we're right in that range. So that's consistent with what we would expect.
Speaker Change: And I guess what im.
Speaker Change: But I guess with a back of the envelope math. It does suggest that the depth of prescribing is still very much in its early stages can you talk a little bit about what this implies around how centers are sort of experimenting with the product and then adopting and maybe if that argues against her.
Speaker Change: In terms of the breadth and depth questions. We're still relatively early in launch.
Speaker Change: Our first full quarter and so your observations are correct early on we're seeing.
Speaker Change: Bolus in any commentary there would be helpful.
Speaker Change: Physicians are getting experience in.
Speaker Change: Great. Thanks, Carter Hoffmann, Jim Ziegler again.
Speaker Change: And then over time, we expect to see that.
Speaker Change: And these accounts and continued breath going forward in terms of bolus the way we think about it is.
Speaker Change: Theres still a high unmet need <unk> patients another treatment option, we expect consistent steady.
Speaker Change: Our growth.
Speaker Change: Within John did not model, a bolus, we expected steady and consistent growth in early in launch that's what we're seeing.
Speaker Change: And the patient starts number are you guys providing that.
Speaker Change: Yes.
Speaker Change: As you know Carter on the patient starts in the buy and Bill market, we don't get that hard data and.
Speaker Change: The way you might with other markets. So the way to think about it is if you take the total milligrams that were sold divided by your assumption on <unk>.
Speaker Change: Average patient wait times to seven one starting dose that would give you the range.
Speaker Change: Patients, but what it doesn't account for specifically is new patients versus continuing patients or dose interruptions or.
Speaker Change: Dose.
Speaker Change: Reductions so.
Speaker Change: That's why we're not going to give that going forward because it's not a clean number it's a calculated number.
Speaker Change: Thank you.
Speaker Change: Your next question is from Emily Butner with H C. Wainwright Your line is open.
Emily Butner: Hi, Good morning, Thanks for taking my question and congrats on a good quarter I guess, maybe if you could discuss some of the initial real world experience in terms of.
Speaker Change: Benefit on transfusion reductions and also on the safety profile are you kind of seeing.
Speaker Change: The data in line with the emerge study.
Speaker Change: And then I'm curious how at least better so I'm just kind of transitioning more into the first line setting has.
Speaker Change: Impacted the launch if at all and if Youre seeing more patients previously treated with this thought or something the first one.
Tim: Hi, It's Tim again I'll take the.
Speaker Change: First part of your question and May be faced and also John Crane, It's still relatively early in launch in much of the insights that we get from the field and from.
Speaker Change: Market research like our patient chart audits, what I would share right now is that.
Speaker Change: Performance and real world sort of experiences are consistent with clinical trials, but again, it's still relatively early on in March and then in terms.
Speaker Change: Luke pattern in the first line yes.
Speaker Change: Based upon their label on the commands.
Speaker Change: The trial that they will compete and.
Speaker Change: Compete for that first line patient against Esa as you know.
Speaker Change: Regardless of whether that first line patients.
Speaker Change: Is an esa or at least patterns that we expect that our differentiated product profile will allow us to become standard of care in second line and we still have that first line Esa ineligible patient population, which is about 10%.
Speaker Change: We expect to compete for as well.
Speaker Change: Kevin Hi, This is Jay just to add in any way enforce social machine, it's still early but anecdotally what we are hearing from the field is that you know this.
Speaker Change: That community providers are comfortable managing.
Speaker Change: These are the two words and our.
Speaker Change: Overall enthusiastic and excited to use <unk>.
Speaker Change: For there and have this option for their patients.
Speaker Change: Great. Thank you.
Speaker Change: Your next question is from Stephen Willey with Stifel. Your line is open.
Stephen Willey: Yeah. Good morning, Thanks for taking the questions and congrats on the progress.
Speaker Change: I was wondering if you could just maybe talk a little bit about the split that you're seeing.
Speaker Change: I know it's early in terms of in terms of data that you guys are getting but just in terms of the utilization split between academic and community prescribers.
Speaker Change: And then you mentioned your review of chart audits in terms of informing how current utilization trends are looking.
Speaker Change: Can you talk about just how the dose management.
Speaker Change: To address decided opinions that occurred typically during the first few cycles is playing out in the real world data just relative to emerge and then I just have a follow up for Michelle.
Speaker Change: Sure Hi, Steve and Jim Ziegler again, the split between community and academic is $65 35, and roughly two thirds one third and then right now what we're hearing from our physicians in both the field observations as well as our market research is that Cytopenia management.
Speaker Change: Is well understood.
Speaker Change: Major concerns and I would expect that the real world.
Speaker Change: Cytopenia management is at least as good as it is in the clinical trials and we have a lot of personal and non personal efforts to help support appropriate cytopenia management associated with Mitel.
Speaker Change: Okay, and then maybe for Michelle.
Speaker Change: I know you've kind of given.
Speaker Change: Longer term gross to net guidance in the mid teens range. Just curious if you could give us a gross to net number for the quarter.
Speaker Change: And then also obviously the royalty transaction will impact cost of goods going forward, but just curious if you can kind of give us.
Speaker Change: Our steady state cost of goods assumption.
Speaker Change: Excluding the impact of the royalty.
Speaker Change: <unk>.
Speaker Change: Yeah sure. So we have continued to guide on the gross to net and kind of the mid double digits.
Speaker Change: And that's what it was that's what we ended in the third quarter I believe it was you can do the math around 14%.
Speaker Change: So we expect that to slightly go up as we the volume increases.
Speaker Change: And we review the mix you know the 340 <unk>, but.
Speaker Change: But we continue to guide on the mid double digits.
Speaker Change: Then on Cogs I mean, obviously, we're not guiding on specific Cogs.
Speaker Change: But once we get out of sort of the.
Speaker Change: Inventory that had already been expense.
Speaker Change: Anticipate our fully loaded cogs to be middle mid single digits going forward.
Speaker Change: Alright very helpful. Thanks for taking the questions.
Speaker Change: Next question is from <unk> Patel with B Riley Securities. Your line is open.
Speaker Change: Yeah, Hey, good morning, and thanks for taking the question.
Speaker Change: Maybe first for Michelle I guess can you elaborate on why the <unk>.
Speaker Change: Our royalty and debt structure was chosen over maybe a simpler equity raise especially given the current market cap of the company.
Speaker Change: What specific considerations you made this approach more preferable.
Speaker Change: Sure. Thanks, Catherine so again.
Speaker Change: Transaction. This was a result of an extremely competitive process, we had options across both debt and royalty structures and those ranged in various sizes and terms based on the terms that were available to us we thought carefully about how much debt to take on so that we can pay off our current debt that we have with Hercules SBB.
Speaker Change: That had unfavorable terms, which we did pay off once we received the funds from Pharmacon.
Speaker Change: Then just the amount of sales to retain in the early launch period and.
Speaker Change: We felt that this struck the right balance and again.
Speaker Change: <unk> reduces our dependency on the equity markets, which was a goal of ours was to not further dilute the stock.
Speaker Change: Okay got it and then.
Speaker Change: Maybe in the data that youre seeing so far.
Speaker Change: We have an early sense of what the month over month.
Speaker Change: Earrings rates are a continuation rates are for these patients who started treatment.
Speaker Change: Consistent is that with the clinical trials.
Jim Ziegler: Hi, David This is Jim again.
Speaker Change: It's still relatively early that comfortable given any data at this point, but obviously, it's something that we're trying to assess through a number of different mechanisms.
Speaker Change: But for right now anecdotally, what I would say is that we expect.
Speaker Change: Month over month.
Speaker Change: Treatment to be more consistent with clinical trials and then over time.
Speaker Change: Obviously, you're aspiring to have better management over time.
Speaker Change: Okay got it thank you very much.
Speaker Change: Yes.
Speaker Change: The next question comes from Gil Blum with Needham and company. Your line is open.
Speaker Change: Good morning, and thanks for squeezing her next question and congrats on a.
Speaker Change: Very impressive first quarter sales, so just a couple from us.
Speaker Change: Now that you have the additional capital is.
Speaker Change: Is there a plan for.
Speaker Change: Further investing on expanding sales in the U.
Speaker Change: For example are really this is just about keeping that 12 months buspar.
Speaker Change: Other question for you regarding assumptions on profitability, which you mentioned.
Speaker Change: Do you think that includes potential in myelofibrosis. Thank you.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Hey, Michelle why don't you go ahead restart.
Speaker Change: Sure Yeah. Thanks Gil.
Speaker Change: So the reason why we chose this hybrid structure is for the flexibility. So as you recall, we took down the first $250 million, we still have access to another $125 million.
Speaker Change: Really we looked at our strategy around redundancy and second supplier for Tullow and that has always been extremely important to us.
Speaker Change: This now allows us to invest and get ready for a second supplier and for redundancy in our drug drug substance. It also allows us to continue to support the U S commercialization of <unk> Hello.
Speaker Change: And but all of those costs for commercialization are in our current plans in.
Speaker Change: In the U S, but it allows us to also stock.
Speaker Change: Spending some capital on preparing for a potential EU launch and as you mentioned, we retained more than 12 months of cash going forward.
Speaker Change: And then maybe a second question.
Speaker Change: Regarding our assumptions on profitability and mix they include myelofibrosis.
Speaker Change: Yes.
Speaker Change: Oh, well there I mean, there are scenarios, where the financing takes us to breakeven.
Speaker Change: It's just low risk Mds and with Myelofibrosis again based on our current plans and our internal revenue.
Speaker Change: In Opex projections.
Speaker Change: But yes, we do include.
Speaker Change: MF and our internal revenue projections.
Speaker Change: Thank you.
Speaker Change: Once again, ladies and gentlemen, if you have a question it is star one.
Speaker Change: This will conclude the question and answer session I will turn the call to Aaron for closing remarks.
Speaker Change: Thanks, so much everyone for joining us today, we appreciate your interest in Huron and look forward to keeping you updated during this very exciting time for our company. Thank you.
Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.