Q3 2024 Ardelyx Inc Earnings Call
Good afternoon ladies and gentlemen and welcome to the R-DLX 3rd Quarter 2024 earnings call.
Speaker Change: Our host for today's call is Caitlin Lowie.
Speaker Change: Vice President of Corporate Communications and Investor Relations at Artilex.
At this time, all participants are an illicit only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host, Caitlin. You may begin.
Thank you. Good afternoon and welcome to our third quarter 2020-24 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the investor section of the company's website at ourdeless.com.
During this call, we'll be making forward-looking statements that are subject to risks and uncertainty. Our actual results may differ materially from those described. We encourage you to review the risk factors and our most recent quarterly report on Form 10Qs that was filed today and can be found on our website at ourdelts.com.
While we may elect to update these four-looking statements in the future, we specifically disclaimer any obligation to do so even if our views change.
Speaker Change: Our President and CEO Mike Raab, Chief Commercial Officer Eric Foster, and Chief Financial and Operations Officer Justin Renz, will share prepared remarks before we open the call to questions. I will now hand the call over to Mike.
Mike Raab: Good afternoon everyone and thank you for spending part of your Halloween with us this year. It was a busy third quarter and Eric, Justin, and I will bring you up to speed on the latest developments and provide some insight into what you can expect in the months ahead.
IBSREL is making a difference. We continue to hear from treating health care providers and patients that IBSREL is delivering meaningful and important benefits to IBSU patients who, despite treatment with established therapies, have continued to suffer from the symptoms of a debilitating condition.
As you can see from the performance this quarter, demand for this effective first-in-class therapy continues to grow. We are excited about the future of Azrela, and with the latest expansion of our Field Force Complete, our confidence that Azrela is a billion-dollar drug before patent expiry is as strong as ever.
Expose's launch continues at a phenomenal pace, demonstrating the clear, unmet medical need among dialysis patients.
We've said it before and it continues to be true, there is a dire need for innovative therapies like Xposa for dialysis patients.
For almost 50 years, binders have been the only prescription therapy available to lower phosphorus levels. In under a year since launch, Expose is demonstrating the critical role it has in helping patients manage their hyperphosphatemia.
Physicians are prescribing EXPOSA because it works and it is helping patients achieve serum phosphorus levels that have previously been unattainable.
The positive results they see in their patients drives this adoption. We, along with you, recognize that there is uncertainty around coverage for exposure for Medicare patients. This is why we've deployed multiple strategies with a goal to provide uninterrupted access to exposure for all patients.
Please allow me a moment to discuss how we got here. With the establishment of the End Stage Renal Disease Prospective Payment System, or BUNDLE, CMS proposed to include in the BUNDLE all drugs and biologics furnished during dialysis services.
Their expectation was that the bundled payment would increase patient access to innovation and care while more efficiently managing the costs associated with dialysis.
The sad reality is that is not how it has turned out. Rather, as you've heard me say many times during our calls, is that the unintended consequence of this policy is that patients end up with limited access to innovation, the complete opposite of what was the original intent.
Due to this erroneous way of thinking, access to much-needed innovative drugs is significantly restricted, if not prohibited, causing some of those innovative therapies to effectively be removed from the market and a dearth of new innovative medications being developed for dialysis patients.
This policy has resulted in negative patient experiences and poor health outcomes.
Historically, since the establishment of the bundle, oral-only therapies have not been included in the bundled payment for Medicare patients, but rather have been paid under Medicare Part D.
However, CMS continues on the path to eliminating coverage for oral only therapies under Part D on January 1st.
Recall that we have been fighting for oral-only phosphate-lowering therapies to retain Part D coverage for Medicare patients since the potential benefit Exfosa could have for patients became apparent more than half a decade ago.
Xfosa is clinically proven to be a safe and effective medicine that offers something fundamentally different for the hundreds of thousands of dialysis patients who cannot tolerate phosphate binders or for whom a binder alone does not work well enough to achieve and maintain target phosphorus levels.
We continue to fight on every front possible.
We are partnered with a broad coalition of patient, physician, trade, community organizations, and minority groups who are disproportionately impacted by kidney disease and dialysis.
Mike Raab: All of whom support the Kidney Patient Act, bipartisan and bicameral legislation that we hope will be passed before the end of the year. There is tremendous support behind this bill, with 38 co-sponsors in the House and 2 sponsors on the companion Senate bill.
Separately, we, in partnership with the American Association of Kidney Patients and the National Minority Quality Forum, have filed a lawsuit claiming that CMS's actions to include oral-only therapies in the bundle are outside of its statutory and regulatory authority.
We are in the early stages of that lawsuit and hope that before the end of the year the court will grant a preliminary injunction to enjoin CMS from proceeding with this plan.
There's a third and essential element to our strategy and that is the actions that we have taken to help protect access for patients and our business even if the legal or legislative options are unsuccessful.
Importantly, we elected after significant research and discussion and careful consideration that the best way for our dogs to preserve the opportunity for broad access to exposure for all patients was to not apply for TADAPA.
We determined that by not applying for TADAPA, we would help preserve the shared decision-making process between patients and providers to ascertain the best course of therapy to manage hyperplastotemia, and to help ensure patients are not subject to a protocol that limits that critical relationship.
Momentarily, Eric will share with you how the EXPOSA team has begun to educate and communicate this approach.
A short two months from now, by the end of 2024, we will know much more than we do today.
Mike Raab: Know that there are important truths that have brought our adults to where we are today and will continue to drive us in the future. First, there are many patients who continue to struggle to manage their phosphorus.
Second, EXPOSA is an important medicine that we know is helping patients achieve target phosphorus levels. And third, our DELEX is committed to ensuring that patients who are prescribed our medicines have access to treatment.
We believe that the decision to pursue and support legal, legislative, and commercial strategies has positioned us to help ensure that EXPOSE is available for all patients, regardless of the scenario we find ourselves in on January 1st.
We believe there is an important and substantive business for EXPOSA in all scenarios.
As we learn more over the ensuing months, we will be able to provide you with greater clarity.
Speaker Change: Critical to our success will be the work that Eric and his team are doing. I'm really excited to welcome Eric not only to this call but to our deluxe.
Speaker Change: In a short time, Eric has brought a fresh perspective to our team and deep knowledge and insight to help lead us through the uncertainty we face with Medicare reimbursement for EXPOSA.
and the opportunities to accelerate the growth of Azrela and Expozone while positioning our commercial organization to take advantage of other products we may develop, in-license, or acquire as we continue to build an important patient-centric enterprise.
Speaker Change: Eric will review the third quarter's performance and provide more detail on how we are advancing our commercial strategies for the future. Eric.
Thanks, Mike, for that kind introduction. I am thrilled to join you all today and to be a part of Ardellix and the remarkable growth story that I see ahead. Before I speak to the successes from the quarter, I'd like to share a patient story, like so many that we hear every day, that reinforces why we do what we do.
Recently, a patient's caregiver contacted us because her mother, a long-time IBSC sufferer, had been given a sample of Ipsirella. This patient had suffered with the symptoms of IBSC for a long time and had tried many treatment options.
She spoke about how her mother wanted to live a full life, but her GI issues continued to take over. They were excited about Ipsirella because they heard it was a different option and they were eager to get started on treatment.
It's stories like this one that attracted me to Ardeleks.
Speaker Change: Ipsrella is a unique and different option for patients suffering from IBSC and we are deeply committed to supporting patients to access therapy. For nearly 25 years I have dedicated my career to bringing meaningful medicines to patients and I have seen firsthand how innovative therapies can dramatically improve patients lives.
And it is evident that Ipsirella and Xposa, medicines discovered and developed by Ardelix, offer much needed and truly differentiated options for patients.
After spending time recently in the field and engaging directly with providers, as well as working closely with the commercial leadership team, it is clear that we have a solid foundation in place.
Speaker Change: First, there are so many patients with IBSC and hyperphosphatemia whose conditions are not well managed and now have different options with Ibsrela and Exposa.
Speaker Change: Second, patients have a defined path to access. They are receiving treatment, and they're having positive benefits resulting in more physicians adopting Ipsrela and Xposa.
Speaker Change: And third, we have a high-performing and committed team that is focused on removing barriers and bringing these medicines to patients as quickly as possible.
As a result of our commercial approach, we delivered consistent growth for both medicines during the third quarter.
Let me first start with Ipsrella.
Speaker Change: Growth continued at a very strong pace, recording a 15% increase in net sales over the second quarter.
We continue to see significant demand for Ipsrela, reflected in continued growth across all of our key demand metrics, including new and refill prescriptions and new and repeat riders. We also began to see encouraging indicators of the impact of the sales team that we hired early in the expansion process.
Recently, I returned from the American College of Gastroenterology annual scientific meeting and the response from the GI community to Absirela was incredible.
Speaker Change: Ipsarella is well-established as a meaningful treatment for health care providers who now have a different option to treat this complex condition.
We also used the conference as an opportunity to highlight key data we recently collected as part of the IBS in America 2024 Supplemental Survey related to the impact that IBSC has on the lives of patients.
90% of those patients surveyed indicated that their condition had a negative impact on their life, with a majority indicating they feel a negative impact on their mental and emotional health, intimacy, relationships, and sense of independence.
More than one-third surveyed patients described their quality of life as poor or fair. These results further reinforce our recognition that there are a significant number of patients who continue to experience the symptoms of their condition and could benefit from Ipsrela.
Our team is focused on driving demand for Ipsrela, supported by the expansion of our field sales team, which I'm happy to tell you was completed towards the end of the third quarter.
Moving forward, our team is trained, ready, and they are in the field. We expect to see increased effort and impact from this extension.
The team is focused on driving broad adoption and accelerating growth by helping our target HCPs expand their view of the appropriate ipsarella patient. We remain uniquely positioned as the only non-secretogog option in a different class with clinically proven efficacy and safety for IBSC patients.
Speaker Change: We continue to be encouraged by the success of Ipsrela and are confident in our path to 1 billion. I look forward to sharing more details on our expectations and plans for Ipsrela in the future.
Now, moving to EXPOSA. EXPOSA continues to deliver an exceptional launch, recording 39% increase in net sales revenue growth quarter-over-quarter anchored by key foundational elements.
There's a large population of patients whose hyperphosphatema is not well managed despite treatment with a phosphate binder.
Speaker Change: Xposa provides a non-finder option that is clinically proven to be safe and effective. This is an established market with a targeted call point for our sales team and nephrologists are receptive to Xposa's clinical profile and messaging. And finally, there is a defined path to access.
The strong performance and response from the nephrology community reflects the need among patients for EXPOSA to help lower and manage phosphate levels to target.
Since launch, patients are getting on treatment and seeing phosphorus levels come down and remain at target levels.
Speaker Change: We consistently hear stories of patients who are now seeing the benefits of Exfosa after struggling for years to control their phosphorus on binders alone. Their sentiment was clear at last week's annual kidney week held by the American Society of Nephrology.
As Mike discussed earlier, irrespective of the uncertainty related to Part B coverage for Medicare patients, we are not changing what we are doing today.
Speaker Change: Our field-based team continues to encourage nephrologists to prescribe just as they do today, based on a patient's clinical need. We are helping the nephrology community and care teams to understand that even in the event that Medicare Part D coverage is eliminated, their ability to prescribe Exposa remains unchanged.
The Xposa team remains steadfast on driving demand today and demonstrating the benefit that Xposa brings to patients.
Today, just three months in, I'm even more excited about Ardellics future and our ability to help the patients that we serve.
We are just scratching the surface, and the potential for Ipsrela and Exposa is significant and it is up to us to capture that opportunity, and to capture it as quickly as possible. I will now hand it over to Justin, who will walk you through the financials from the third quarter. Justin?
Thank you, Eric, and it's great to have you on these calls and at our DELECs.
Justin Renz: We recorded an exceptionally strong performance during the third quarter, focusing on driving our top-line growth, managing our expenses, and adding to our cast position.
We enter the fourth quarter with positive momentum and expectations of continued growth and a strong balance sheet to support future opportunities.
Now let's walk through the financials, starting with revenue.
We reported $98.2 million in total revenue during the third quarter, compared to $56.4 million in total revenue during the same period in 2023, driven by significant growth in net product sales for both products.
For the third quarter of 2024, net product sales revenue for Absarella was $40.6 million, nearly double our revenue from the same period of 2023, and 15% quarter-over-quarter growth compared to the second quarter of this year, driven by strong demand.
Our third quarter gross net deduction for ABSARELLA was 30.0%, consistent with our prior quarter.
As a result of the strong performance in the third quarter, as well as the expected impact of the expanded sales force, we are narrowing our guidance and expect full year 2024 Absarella U.S. net product sales revenue to be between $145 and $150 million.
Speaker Change: Now turning to EXPOSA.
Exposé continues its exceptional launch, reporting $51.5 million in third-quarter net product sales revenue, up from $37.1 million re-reported in the second quarter of 2024.
Speaker Change: This was driven by strong demand from healthcare providers who clearly need a new and different option for dialysis patients to help them achieve target phosphorus levels.
In addition to strong demand for EXPOSA, our gross-to-net deduction improved from 21.4% in the second quarter to 19.3% for the third quarter.
We are pleased with our top-line results and expect continued growth in the fourth quarter. Our commercial approach is working and our teams are executing at the highest level to build and maintain the momentum we have established for both Absarella and Xposa.
In addition to product revenue, we also had $5.3 million in partner product supply revenue, as well as just over $800,000 in non-cash royalty revenue during the third quarter of 2024.
Speaker Change: And now for the expense and cash side.
Research and development expenses were $15.3 million in the third quarter of 2024, compared to 8.6 million during the same period of last year, reflecting increased medical engagement with scientific communities and pediatric clinical trial activities.
Selling general and administrative expenses were 65.0 million dollars for the third quarter compared to 32.7 million for the same period of 2023.
The increase was related to commercial activities for Absarala and Exposa, as well as the expansion of the Absarala sales team.
Substantial top-line growth combined with thoughtful expense management results in a net loss of approximately $800,000 or less than a penny per share.
Speaker Change: In addition, our third quarter 2024 results included $11.1 million in combined non-cash expenses from share-based compensation and non-cash interest expense related to the sale of future royalties.
We finished the third quarter in a strong cast position.
As of September 30, 2024, we had total cash, cash equivalents, and short-term investments of $190.4 million, as compared to $184.3 million at the end of 2023 and $186 million at the end of the second quarter.
As we continue to thoughtfully strengthen our balance sheet, we announced today that we drew $50 million and amended our debt agreement with SLR Capital.
This amendment allows us to draw an additional $50 million, sets the interest rate for the tranche we drew today and the additional $50 million of committed capital at SOFR plus 4.02%, and falling extended the interest-only period to July 1st of 2028 for all borrowings.
Speaker Change: The strong cash position we finished the third quarter with, combined with the additional $50 million, gives us a pro forma cash balance of over $240 million, providing optionality as we pursue our goal of building a patient-centric enterprise that Mike mentioned earlier.
To recap, we have once again delivered a remarkable performance. We drove substantial top-line growth across our product lines, and we expect continued growth in the fourth quarter.
We manage our operating expenses, maintain a strong balance sheet, and always, as always, focus on maximizing shareholder value. With that, I'll hand it back to Mike.
Thank you, Justin and Eric. The third quarter was another exceptional one. We focused on executing our key priorities, including maintaining our commercial momentum, supporting efforts to preserve patient access to EXPOSA, strengthen our cash position, and envision the next phase of growth for the company.
The result is another quarter of excellent progress, consistent growth, and most importantly, doing what is right for the patients we serve.
because we believe that if we serve patients, we will serve shareholders.
Before I open the call to questions, I want to thank our shareholders who have followed and supported us on this journey.
Speaker Change: We will learn much in the weeks and months ahead together.
You have our commitment that we will continue to make decisions that are in the best interest of patients, employees, and you, our shareholders. And, as always, I want to express a special thanks to Team Ardellex and the patients and physicians we serve. You are the driving force behind what we do.
Speaker Change: I will now open the call to questions. Operator?
If you would like to ask a question, please press star 1 on your telephone keypad now.
You'll be placed into the queue in the order received. Please be prepared to ask your question when prompted.
Once again, if you have a question, please press star 1 on your phone now.
And our first question comes from Louise Chen from Cantor Fitzgerald.
Hi, congratulations on the quarter and thanks for taking my questions here. So, I have a few for you. I wanted to ask you what percent
of Exposa Sales are not part of the Medicare bundle.
And then, how do you think about expanding your product portfolio? You talked about that a few times today. And last question I had for you was the peak sales for IBS Rella being $1 billion plus. How long do you think it will take to achieve that? Thank you.
Speaker Change: Hi Louise, great questions. So first in terms of percentages, I think what we've shared in the past is the general numbers of 60% Medicare, 40% non-Medicare and that moves around a little bit but that's a good general way to think about it. In terms of
Speaker Change: Your second question of how we expand beyond now, that's the reason that we brought on Mike Kelleher and those efforts are beginning now and ongoing. We now have the luxury of the strong balance sheet that we've been able to build and continue to looking to doing that going forward. So more news, I expect, coming from those efforts in the future. I'm sorry, the third question?
The third question was just on your
peak sales for IBS Rella. Yeah.
Yeah, I mean, I think at this stage it's probably a little bit too early to give a specific number on that. You know, we just finished the expansion, and as Eric mentioned in his comments, they're trained in the field. You know, ACG was a phenomenal out...
Speaker Change: Turn out for that team and you know, let's let's hold off on that until we see the performance with the addition Thank you
Thanks, Louise.
Speaker Change: Our next question comes from Dennis Ding.
Speaker Change: of Jeffries,
Dennis Ding: Hi, good afternoon. Thanks for taking our questions. A few from me. So for EXPOSA in 2025, given it's been a few months since you announced you guys won't apply for DAPA, like what are the different options on the table in terms of commercial strategy? And if you could be a little bit more more granular. And then on ISRELA, just talk about the pushes and pulls on the guidance.
It seems a little bit conservative. Was there anything, one timer, or anything that you see on the ground? Thanks.
Yeah, so let me address the second one first. As you've heard me say probably too many times, I don't want to get over my skis. And we just finished the expansion with the additional ads to the Adrela team. So, you know, I'm very encouraged by what we see and I think narrowing the guidance gives you some sense in terms of our confidence. So there's not a there there that's negative. I see only positives in terms of the expansion of what we saw in ACG. In terms of what it looks like going forward, I think really pay attention to what Eric said.
Speaker Change: The objective here is for physicians not to change what they're doing today.
This is a coverage issue is the way to simply think about it, and our objective is clearly with everything that we do and have done is to ensure
Speaker Change: Alright, thank you.
Speaker Change: Our next question comes from Roana Ruiz of Lee Rink Partners.
Hi, afternoon everyone. So a couple for me, I was curious if you could elaborate a bit more on your plans around possible education and outreach to prescribers of Exposa ahead of January 1st. I know there's a lot of moving pieces but was also curious if what are you thinking about in terms of engaging with different payers, particularly the non-Medicare side as well?
Yeah, so I'll ask Eric to comment a little bit on that. It's really kind of a simple message. Don't change what you're doing, right? And going into next year, if we aren't successful with that third leg of the stoolness strategy, is that they continue doing what they're doing. And I think as the message is beginning to resonate, I'll ask Eric to comment on his experiences at ASN, which just happened as well, as this message began to percolate.
Eric Foster: Yeah, thanks, Mike. So what we know, physicians are very interested in EXPOSA and this treatment to address the unmet need that's out there. Just like we're thinking for 2025, you know, physicians don't differentiate between the Medicare population and the non-Medicare population.
So, we're going to continue to message the clinical benefits today, as well as access to therapy, and continue that in 2025, keeping the nephrologist at the center of the decision making. And I can tell you, just coming off of ASN, there continues to be a tremendous amount of excitement on Xposa and the opportunity ahead. And like I said, the physicians aren't really differentiating between Medicare and non-Medicare, so we need to continue to be steadfast in our execution and delivering those clinical messages so that physicians can make the best choice for their patient based on clinical needs.
Speaker Change: And the latter part of your question is, there's nothing unique in any communication that we have with payers, right? It is status quo in the way that we're operating through our Deluxe Assist.
Speaker Change: to have those patients go through the prior authorization process so we don't end that I mean it sounds funny but it's keep doing what you've been doing which the decisions we've made allows that to occur.
Got it. Thanks.
Speaker Change: Thanks.
Speaker Change: Our next question comes from Yigal from Citigroup.
Speaker Change: Hi, this is Rina on Freegal. Thanks for taking my question. I was just wondering if you've made any progress with regard to the injection to temporarily halt implementation of including orals in the dialysis bundle in 2025. Like any additional color there would be much appreciated.
Speaker Change: Yeah, I think as you heard in my opening comments, we hope that there would be some action on that before the end of the year. Otherwise, there's not really any additional insight that we can provide.
Speaker Change: Thanks for taking the time to talk to us. Thanks.
Speaker Change: Our next question comes from Laura Chico from Web Bush Securities.
Hey, good afternoon. Thanks for taking the question. Just one, Justin, I think I missed what you said on the growth in that improvement in the quarter for EXPOSA. And then with respect to EBSRELA, what would be appropriate timing for 2025 guidance? Thanks very much.
Yeah, so Laura, the latter part first, as we look at the performance of the addition of the sales force, the new ABDs, let's let that settle in a bit before we give guidance but it'll be in the early part of the next year. We won't leave you hanging too long.
Speaker Change: Justin.
Thank you, Laura. In the third quarter, our growth to net deduction improved from 21.4% to 19.3% in the third quarter, so this improvement was primarily, you know, dependent on our patient-payer mix.
the utilization of our commercial co-pay and mild changes there. As you might imagine, we're pleased with the results to date. And as we learn more about the patient mix and the co-pay claims and the amounts of the claims, we'll give you more guidance going forward like we do for ABSARILA, where we mentioned 30 plus or minus 5 is the general rule.
Speaker Change: Thanks very much, guys.
Speaker Change: That's fine.
Speaker Change: Our next question comes from Joseph Tomey from T.D. Cowan.
Hi there, good afternoon thing congrats on the progress and thank you for taking my questions Maybe just going into the fourth quarter. Do you expect any? differing dynamics in terms of
Speaker Change: stocking of Exposa or any pull-forward of prescriptions or anything that might be possible, I guess, for either the patients or the physicians to almost prepare for a potential bundle scenario.
Are you, do you think there will be any...
Speaker Change: anything to point out there. And then second, just on the EXPOSA court case, obviously the legislation side is a little bit more maybe straightforward if that's able to go through, but if the injunction is granted by the end of the year, what's the next step then? How much visibility would you have after that standpoint on next steps? Thank you.
Hey Joe, thanks. You know, I think if that were to occur, we'll provide more perspective what that then means if we get that. It's premature at this point to give any more information than that. As it relates to pulling things forward,
What I would say is what the team has put in place is a continuity of care program which I think is very important to not have stuff like that occur. Where if you are prescribing for a Medicare patient, you can come into a continuity of care program until things resolve. So I wouldn't anticipate that. I don't know, Eric, any comments that you would like to share on that? No, I agree. I think we've got a great program with continuity of care and you know, we've got really good relationships with wholesalers and distributors and
There really hasn't been any conversations about that.
Speaker Change: Great, thank you. And maybe just one more.
Question from me, I guess, does it seem like the dialysis centers are even preparing, I guess, for this change January 1st? It seems like this would be a big change for just like a light switch on and off, I guess. Are you seeing anything at the dialysis centers themselves that would indicate that?
you know, they're preparing or not preparing one way or the other.
No, I think, Joe, one of the biggest challenges for all dialysis providers, and certainly the independents, the rural, and the small, and non-profits...
is the infrastructure that must be put in place to manage.
Speaker Change: pills and everything that's going to come from this is going to be debilitating for many. And that is one of the fundamental risks, honestly, of what this policy is ultimately going to do, is further make dialysis a difficult thing for patients to get access to. We certainly know of rural communities where people three times a week are having to drive hours.
Speaker Change: to be dialyzed.
they need that to live. So yes, there are efforts they have to underway, which is the basis of an awful lot of those providers supporting the Kidney Patient Act. It's a catastrophe, and it's bad policy, and it's bad for patients, which is why we're working so diligently both on the Patient Act and the legal front.
Perfect. Thank you. Very helpful. Sending good luck.
Speaker Change: Thanks, Joe.
Our next question comes from Ryan Deschner of Raymond James.
Hi there, congrats on another strong quarter for both Absarola and Exposa.
Thank you. Bye.
My question is, how much of the uptick
We are seeing an Insurella Scripps over the past few months. Are you directly attributing to getting the expanded sales team online versus other factors? You know, is every member of this team?
Speaker Change: now up, fully trained and deployed, and then also follow-up questions.
Let me just briefly address the
Speaker Change: First question, and I'll ask Eric to comment on it too, is in Eric's comments you heard him say that we're beginning to see some impact from those who came on early in the expansion.
but likely not.
the majority that came on and are now in the field and trained. So, Eric, any color you want to add to that? No, I think that's right. We started the expansion a little bit earlier in the year, and we certainly have seen impact from those individuals that have come on.
And that's what gives me confidence as we move forward now having a full team in place completely trained and in the field So plenty of opportunity that's out there and looking forward to having a full team in place for fourth quarter
Fantastic. And just a quick follow-up. Do you have any updates on partnerships in Europe or the rest of the world for EXPOSA or a timeline with more resolution on the approval in the Chinese market? Thank you.
Speaker Change: Yeah, so for the Chinese approval, we still anticipate that would be before the end of the year. And, you know, no updates or news on other partnering.
Speaker Change: Got it, thank you.
Speaker Change: Thanks for watching.
Our next question comes from Ed Arce of HC Wainwright.
Hi everyone, good afternoon. This is Thomas asking a couple questions for Ed. Thank you so much for taking our questions. Perhaps first question is for Justin. Can you discuss the latest Bruce and Matt for Xrela and then also how much improvement can we expect from current level and what will it take?
Justin Renz: So for ABSARELLA, as we've said before, our gross net deduction is around 30% plus or minus 5% and so our third quarter was in line with that precisely.
Justin Renz: And then, again,
Going forward, you know, we'll give updates, obviously, in the early part of the year. As a general premise, in the first quarter of 2025, our growth center is higher when plans reset, insurance policies reset, some folks get new coverages, and there may be new Medicare rebates taking effect in January of 2025 as well.
Got it. And then, I guess for EXPLOSA, you mentioned earlier, EXPLOSA sales guidance is kind of expected early next year. Can we also expect EXPLOSA sales guidance for next year around the same time frame?
Speaker Change: Well, with all the moving parts with Xposa, I think it's a bit premature for me to say when we would give guidance. It would be nice to have steady-state predictable things, so, you know, if we're able to, we'll do it as soon as we can, but I think expecting at the beginning of next year, maybe a little bit premature.
Thank you.
And then one final question, perhaps this one for Eric, you mentioned earlier in the call,
Speaker Change: You know, you're really seeing early impacts, especially.
from the sales rep that are earlier on in the extension process. What metrics can we focus on in the near and long term? And, you know, what we consider to be a successful extension.
Yeah, so for me, you know, what I look at is, with the increased individuals in the field, you know, are they continuing to have increase in their call activity? We certainly are seeing that simply, which is having more representatives out there in the field. And I'm very proud of the team this year to be able to show an increase in new and total writers, as well as new and total refill prescriptions. So for me, those are the indicators that we're focused on, and we've shown good growth this quarter versus last quarter. So continuing to have that solid quarter-over-quarter growth.
Thank you again for taking our questions and we're looking forward to the progress for Exposing the Sorrow.
Thank you very much.
Speaker Change: Our next question comes from Matt Kaplan of Ladenburg-Talman.
Hey guys, thanks for taking the questions and congrats on the really strong quarter. Just to dig in a little bit more to
what you're seeing and what you're hearing in terms of the progress and moving forward with the Kidney Care Act.
Any detail you can you can share what you're hearing on a legislative front?
Speaker Change: Yeah, I mean, Ed and Anna.
Speaker Change: and view. This program concludes.
do what I do and watch congress.gov you can see all the co-sponsors that are signing up on in the house right as I said in my opening statement we now have 38 to in the companion bill in the Senate so it is progress and exciting progress at that plus all the coalition has been built around the patient act so you know it is
We're punching above our weight class. I don't know what other kind of analogies that you can use or metaphors, but we have a lot of attention. Now our system needs to work to get the bill approved and passed.
And then with respect to the APA lawsuit and CMS, are there any specific timelines that the court has to get back to you and with respect to issuing a potential preliminary injunction?
Yeah, I mean, so that needs to occur before the end of the year. So that's why we're hopeful that we will all know something more before that.
Speaker Change: Okay, so the court must must decide by the end of the year, not.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Bye.
And then, I guess, lastly on Exposa, I guess, you guys recently, I guess, got back from the ASN meeting. Any feedback that you're hearing from doctors out there with respect to how they're utilizing Exposa right now to treat their patients?
Yeah, thanks for that. Listen, I was incredibly impressed with the team this year at ASN. And in talking with physicians, they're using it on label in addition to the binders. And they're really seeing significant results with these patients out there that aren't well-managed on their phosphate binders. So it continues to give me confidence in the direction that we're headed, and most importantly, the opportunity in front of us.
Speaker Change: Thank you.
Speaker Change: Next question comes from Chris Raymond of Piper Sandler.
Chris Raymond: Hey, thanks guys. I know this question has been asked a couple ways already and I know you're not guiding on EXPOSA.
And Mike, I think I heard what you said about you're messaging the nephrologist to just keep doing what you're doing.
But I have to ask, if 60% of your patient base is likely to not be covered, you know, come January 1st, you know again without any legislative or legal, you know, progress on your part,
How do dots not start to pull back use?
And in particular, I think there could be an argument for this.
A KOL call earlier this month where the KOL was kind of resisting the notion that there'd be a bifurcated treatment
that he'd find a way to get to keep patients on therapy. And I'm kind of flummoxed as to how that could be. Any sort of thinking there that you can help maybe enlighten us on?
Speaker Change: Bye!
Very simply, this is about access, not reimbursement.
So what does that mean is if you as a nephrologist continue doing what you're doing and you send prescriptions into our Delix Assist It will be adjudicated whether or not it is a prescription that has reimbursement
and if it doesn't, you're as it is today, your patient will be able to potentially...
Speaker Change: meet the benefit requirements of our patient assistance program.
So, the objective, as I said in my opening statement, was that our objective is to make sure our patients have access to the drugs that we've created.
And that's why the message to nephrologists is keep doing what you're doing. We don't anticipate or expect them to determine and bifurcate. That's absolutely what we're trying to avoid. That's not their job.
Let us do it on the back end with our deluxe assist and identify those that are that still have reimbursement and For those that qualify they could have access to the patient assistance program
Speaker Change: okay so then the way it would would show up then I guess I'm a P&L would be again barring any sort of progress on all the efforts that you guys have
would just be this large free drug expense. Is that a fair statement?
Speaker Change: there would be a free drug expense in marketing as there is now.
Yeah, okay.
Thank you.
This concludes our question and answer session.
I would like to turn the conference back over to President and CEO Mike Raab for any closing remarks.
Thank you everyone for joining us this evening. As always, we remain focused on our priorities and will provide information updates when we can. In the meantime, we remain steadfast in our commitment to patients and to maintaining our commercial momentum.