Q3 2024 Jazz Pharmaceuticals PLC Earnings Call
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Abby: Ladies and gentlemen, thank you for standing by. My name is Abby and I'll be your conference operator today. At this time I would like to welcome everyone to the Jazz Pharmaceuticals 3rd Quarter 2024 earnings call.
Speaker Change: Thank you operator, and good afternoon, everyone today job Pharmaceuticals reported its third quarter 2024 financial results. The slide presentation accompanying this webcast is available on the investors section of our web site investors May also refer to the press release, we issued earlier today, which is also posted to our website on.
Speaker Change: On the call today are Bruce <unk>, Chairman and Chief Executive Officer, Renee Gala, President and Chief Operating Officer, Rob you known Executive Vice President Global head of R&D, and Phil Johnson, Chief Financial Officer on Slide two I'd like to remind you that today's webcast includes forward looking statements such as those related to our future financial and operating results.
Growth potential and anticipate a development and commercialization milestones and goals, which involve risks and uncertainties that could cause actual events performance and results to differ materially from those contained in these forward looking statements. We encourage you to review the statements contained in today's press release, and our slide deck and the risks and uncertainties described.
Our SEC filings, which identify certain factors that may cause the company's actual events performance and results to differ materially from those contained in the forward looking statements made on today's webcast, we undertake no duty or obligation to update our forward looking statements.
Speaker Change: I got it on slide three we will discuss non-GAAP financial measures on this webcast descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the investors section of our website I will now turn the call over to Bruce.
Bruce: Thanks, Andrea good afternoon, everyone and thank you for joining us today.
Bruce: I'll start on slide five we are pleased to report on our progress in the third quarter of 2024, which was headlined by delivering strong growth across our commercial portfolio and advancing our us any data map development program.
Recently, we achieved an important clinical milestone with positive data from our phase III trial evaluating <unk> in first line maintenance for extensive stage small cell lung cancer.
Diving into a bit more detail I'll begin with our commercial execution for the third quarter.
The durability of our neuroscience therapeutic area was underscored by both XI wave and up of dialects posting record quarterly sales and year over year double digit growth.
Bruce: In addition, our oncology business reported 9% revenue growth year over year, including a strong quarter for <unk>.
Bruce: In our neuroscience therapeutic area Skywave remains the ox later choice is the number one branded treatment for narcolepsy and the only approved therapy for idiopathic hypersomnia or IH.
Bruce: I H physicians and patients continue to provide positive feedback on the benefits of <unk> as we build the market and we expect this indication to drive growth for the brand and in narcolepsy, we continue to see strong patient demand.
Bruce: At the dialects growth remains strong as our nearest blockbuster status patient demand in the U S is being driven by multiple commercial initiatives and we've made steady progress in our ongoing ex U S market expansion.
Bruce: Moving to our oncology therapeutic area. So all could continues to perform well and we now have an opportunity to move from second line treatment to first line maintenance therapy based on the positive results of the <unk> trial.
Bruce: Bob will review the trial results and next steps later in the call.
Bruce: <unk>, we are seeing high utilization in the pediatric population and are continuing to roll out programs to drive adoption in the adolescent and young adult market our.
Bruce: A recent update to children's oncology group pediatric treatment protocols for a O L has impacted the timing of Asparaginase administration. We expect these new protocols will have a temporary negative impact on third quarter and fourth quarter <unk> revenue after which we expect demand to normalize by early next year.
Bruce: Turning to our R&D and pipeline efforts, we are focused on rapidly advancing our Ami data map program. The Paducah date, presenting data Mab in second line biliary tract cancer or BTC is coming up at the end of this month and we are well positioned for launch following approval.
Bruce: Our development program includes multiple ongoing trials in a number of her two positive tumors across lines of therapy.
Bruce: Danny is our most derisked pipeline asset and we're moving forward with a sense of urgency and purpose in order to deliver this therapy to patients with her two positive tumors, who are in need of new and effective treatment options.
Bruce: At the start of the call I mentioned, our recent data readout on <unk>. We're excited that patients will potentially have access to this therapy earlier in their treatment, where there is the potential to increase duration of response in a broader patient population delaying disease progression and extending survival.
Bruce: Our commercial execution and focus on operational excellence have kept us in a strong financial position again. This quarter, we continued to deliver top line growth and generate significant cash flow from operations.
Bruce: We remain focused on investing in the product pipeline programs and corporate development opportunities that we believe have the highest potential to deliver sustainable growth and enhance value.
Bruce: As Phil will cover in more detail later in the call. We're affirming our total revenue and adjusted net income guidance provided on our second quarter 2004 call and have updated certain other elements of our guidance.
Speaker Change: I'll now turn the call over to Renee to review, our commercial performance after which Rob will share an update on our R&D progress.
Speaker Change: Bill will provide a financial overview and then we'll open the call to Q&A Rene.
Renee: Thanks, Chris I'll begin on slide seven.
Bruce: We're pleased with the performance of our sleep business. This quarter total revenue, which includes <unk> xyrem net sales plus royalties from high sodium oxidate authorized generics or AG was approximately $505 million.
Speaker Change: In the third quarter <unk> net product sales grew 17% year over year to approximately $388 million and we expect <unk> to continue to be the ox state of choice in both narcolepsy NIH.
Speaker Change: We are focused on enabling as many patients as possible to benefit from low sodium sideways and saw an increase of approximately 400 net patients exiting the third quarter compared to the second quarter.
Speaker Change: In narcolepsy, we are seeing strong demand from both new and transition patients further our ongoing focus on individualized dosing and educating patients and prescribers about the benefits of reducing sodium intake continues to drive growth and I'm pleased to report we reported approximately.
Speaker Change: 150, net narcolepsy patient adds compared to the prior quarter.
Speaker Change: Moving to I H, we remain excited about the growth potential of <unk>. In this indication there were approximately 3550 active IH patients on valuate exiting the third quarter, an increase of approximately 250 patients compared to the prior quarter.
Speaker Change: Which is in line with the growth we've seen in recent quarters.
Speaker Change: Our expanded field force is continuing to focus on increasing the depth and breadth of IH prescribers, which is a primary driver of demand.
Speaker Change: We are also seeing positive impact from our field nurse educator program, which supports both narcolepsy and IH indications. This program enables new <unk> patients to interact in person with trained healthcare professionals as they begin oxidate therapy, providing education during the.
Speaker Change: A time when patients are titrating in optimizing their octavate therapy and are most likely to have questions related to their treatment.
Speaker Change: Moving to slide eight and at the dialects, we achieved another strong quarter with net product sales of approximately $252 million in the third quarter, representing an 18% increase compared to the same quarter in 2023.
Speaker Change: Key drivers of the increased demand in the U S included the positive response to data on the benefits of that the dialects beyond seizure control such as the language and communication cognition executive function and emotional and social function as well as synergies from treatment with other dialects plus club.
Speaker Change: Thats an bill.
Speaker Change: Building on that body of evidence, which now includes data from more than 2000 patient experiences. We presented data at the European epilepsy Congress in September that demonstrated improvements in seizure and non seizure outcomes in patients receiving at the dialects in combination with <unk>.
Speaker Change: Importantly, our improved understanding of the real world outcomes benefits about the dialects not only extends to patients but to their families and caregivers as well.
Speaker Change: We're also continuing to see penetration in the adult patient setting, which is supported in part by data showing that many lgs patients may reach adulthood, without a specific diagnosis and by providing health care professionals with clear diagnostic tools for adult patients.
Speaker Change: Our virtual nurse Navigator program, which we launched earlier this year provides at the dialects patients and their families with a resource to discuss medication related topics such as optimized dosing.
Speaker Change: While it's still early we are seeing positive momentum with this program.
Speaker Change: Further opportunities for growth include focused data generation and geographic expansion beyond the more than 35 countries, where at the dial axis currently approved.
Speaker Change: Moving to slide nine in our oncology business total oncology revenue for the quarter was approximately $285 million, representing 9% growth from the same period last year.
Speaker Change: Really it's not product sales were approximately $99 million, representing a 6% decrease from the third quarter of 2023.
Speaker Change: As Bruce noted earlier over the summer the children's oncology group updated pediatric protocols for a L. L that impact the timing of Asparaginase administration importantly.
Speaker Change: Importantly, the updated protocols do not change the recommended total number of doses of asparaginase. So we do not expect an impact to overall demand for Riley. We anticipate the revenue impact of this timing shift to be primarily limited to the third and fourth quarter of this year and to Nora.
Speaker Change: I'm alive by early next year.
Speaker Change: We continue to see the most opportunity for growth in the adolescent and young adult or a Y a market and we are continuing to educate oncologists, who treat these patients about the benefits of asparaginase therapy.
Speaker Change: This quarter, we initiated several new programs to drive a way adoption and continue to see opportunity to build that market over time.
Speaker Change: Turning to slide 10, and as that soccer, we delivered another strong quarter with net product sales, increasing 10% year over year to approximately $86 million.
Speaker Change: The silica remains the treatment of choice for second line small cell lung cancer patients and health care providers continued to deliver positive feedback on the products clinical benefit and ease of use.
Speaker Change: Last month, we were very pleased to announce positive data from the <unk> trial evaluating <unk> in a first line maintenance regimen.
Speaker Change: Our team is preparing to submit an NDA to include first line maintenance therapy to the <unk> label. If approved this change in practice to first line maintenance would enable a larger number of small cell lung cancer patients to be eligible for <unk> treatment.
Speaker Change: With that I will turn it over to Rob for an update on our pipeline and upcoming milestones Rob.
Rob: Thanks Renee.
Rob: Slide 12 provides an overview of the key clinical programs in our pipeline.
Rob: Start with oncology and then a data map our highest priority pipeline program during.
Speaker Change: During the second quarter FDA accepted and granted priority review for our BLA for previously treated unresectable locally advanced or metastatic her two positive.
Speaker Change: <unk> BTC.
Speaker Change: Adding an action date of November 29, 2024.
Speaker Change: Enrollment for our phase III first line gastroesophageal adenocarcinoma for Gea trial.
Speaker Change: <unk> is on track and we estimate topline progression free survival or PFS data.
Speaker Change: To be available in the second quarter of 2025.
Speaker Change: If the trial is positive based on PFS and supported by a trend in the interim overall survival analysis, we expect that would support registration filings.
Speaker Change: We have also recently initiated a phase II Pan tumor trial. This study examined data man and a broad basket of her two positive solid tumors.
Speaker Change: I'll speak more to or is that a data mab development plan in just a moment.
Speaker Change: Given the opportunity to help more patients. We are very pleased with the positive results from the phase III <unk> trial, which were announced last month.
Speaker Change: The trial evaluated <unk> in first line maintenance therapy of extensive stage small cell lung cancer in combination with a PD lone inhibitor teasel isn't an artist centric.
Speaker Change: <unk> is the most commonly used PD lone agents in first line maintenance following standard of care induction therapy, with Carboplatin and Etoposide and immunotherapy.
Speaker Change: The combination of silica <unk> demonstrated a statistically significant and clinically meaningful improvement in the primary endpoints of overall survival and progression free survival compared to treatment with <unk> alone.
Speaker Change: These results demonstrated the potential of this regimen to delay disease progression and extend survival for patients with this aggressive disease.
Speaker Change: Importantly, upon approval patients will have access to <unk> earlier in the treatment paradigm.
Speaker Change: Where there is potential to increase duration of response and a broader patient population.
Speaker Change: <unk> disease progression and extending survival.
Speaker Change: We plan to submit a supplemental NDA to FDA in the first half of 2025 to expand the ZIP Selco label to include first line maintenance.
Speaker Change: We are also looking at appropriate peer reviewed forms to present the data.
Speaker Change: This is an important step toward possible inclusion in <unk> guidelines and compendium listings.
Speaker Change: Turning to <unk> and.
Speaker Change: In August we announced topline data from our phase III trial in Japan.
Speaker Change: While the trial did not meet the primary efficacy endpoint of change in indication associated seizure frequency during the treatment period in pediatric patients.
Speaker Change: Improvements were observed in the primary and secondary endpoints.
Speaker Change: We remain confident in the overall clinical profile of <unk> and we are continuing to collect data in Japanese patients.
Speaker Change: We plan to engage with regulatory authorities in Japan regarding a potential new drug application.
Speaker Change: I'll also note that following discussions with FDA, we are now planning to initiate a phase <unk> trial for <unk> 441.
Speaker Change: Our clinical stage Orexin, two receptor agonist and narcolepsy type one patients in the first half of 2025.
Speaker Change: Turning back to Zander data map on slide 13.
Speaker Change: Wanted to touch on updated clinical data from Zanna data Mab and first wondering gea from an ongoing phase II trial that were presented at the recent ESMO conference in September.
Speaker Change: Data from 41 patients treated with <unk> in combination.
Speaker Change: Asian with physician's choice chemotherapy.
Speaker Change: Demonstrated a confirmed objective response rate of 84%.
Speaker Change: And duration of response of $18 seven months.
Speaker Change: Highlighting the durability of <unk> treatment.
Speaker Change: We also reported PFS of $15 two months.
Speaker Change: And while overall survival was not yet mature after a median follow up of 41 five months.
Speaker Change: The Kaplan Meier estimated 24 month overall survival of 65% and the 30 month overall survival was 59%.
Speaker Change: This adds to the growing body of evidence presented data Mab and first line her two positive gea.
Speaker Change: Which also includes promising data presented at ESMO 2023 from a phase II study of <unk> plus chemotherapy in combination with <unk>.
Speaker Change: The results from these separate cohorts give us confidence in both treatment arms of the phase III Horizon <unk> trial as we approach the data readout expected next year.
Speaker Change: Moving to slide 14.
Speaker Change: And an overview of our development strategy presented data ma'am.
Speaker Change: We remain excited about its potential to transform the current standard of care in multiple her two expressing cancers.
Speaker Change: Including in cases resistant to prior her to targeted therapies.
Speaker Change: PTC represents our first potential approval presented data man with a <unk> action date set for November 29th.
Speaker Change: Our confirmatory phase III trial in first line BTC is enrolling.
Speaker Change: And we are pursuing multiple indications for her two positive tumors beyond BTC.
Speaker Change: As I noted our phase III trial in Gea's ongoing.
Speaker Change: We have also initiated the phase III empower trial.
Speaker Change: Which is designed to evaluate salmon data map in combination with chemotherapy.
Speaker Change: After progression on Pdx team where.
Speaker Change: Where we have the opportunity to be the first her to targeted therapy.
Speaker Change: Demonstrate efficacy and safety in breast cancer patients post <unk>.
Speaker Change: Additionally, we recently initiated a phase II pan tumor trial.
Speaker Change: Set of data, Matt monotherapy has shown promising activity across a range of tumor types in this trial as an opportunity to efficiently generate additional data across a variety of her two expressing solid tumors.
Speaker Change: The trial is enrolling three cohorts.
Speaker Change: <unk> tumor cohorts, including patients with her two positive tumors, where her two treatment naive.
Speaker Change: As well as two cohorts of patients who previously were treated with TD XD.
Speaker Change: One of these cohorts is enrolling her two positive gea patients and the other is enrolling her two positive breast cancer patients.
Speaker Change: Overall, we're excited about the prospect of delivering some of the data map to BTC patients in the near term and we are executing on a robust development plan based on our conviction that <unk> has significant potential to improve care for patients with multiple hurt you're expressing tumors.
Speaker Change: Now I will turn the call over to Phil for a financial update Bill.
Phil Johnson: Thanks, Rob.
Phil Johnson: I'll begin on slide 16, with our top and bottom line results.
Speaker Change: As a reminder, our full financial results are available in our press release issued earlier today and in our 10-Q, which will be filed tomorrow morning.
Speaker Change: During the third quarter of 2024, we generated more than $1.05 billion in total revenue, a 9% increase compared to the third quarter of 2023.
Speaker Change: Our strong topline performance was driven by the growth of our key products.
Speaker Change: By way of dialects, and relays, which combined grew 14% year over year.
Speaker Change: In addition, our adjusted net income of $417 million for the quarter represents an increase of 23% compared to the third quarter of last year.
Speaker Change: We continue to generate significant cash from our business recording approximately $400 million in cash from operations in the third quarter and roughly $1 billion through the first three quarters of the year.
Speaker Change: Our strong overall financial position, including $2 6 billion in cash and cash equivalents means we have significant flexibility to invest in priority commercial and R&D programs and corporate development opportunities on our cash investment balance I would highlight that we intend to make a substantial payment on our term loan b. Following the mid January 2020.
Speaker Change: Five exploration of a 1% prepayment premium in place after our most recent repricing.
Speaker Change: Turning to slide 17 and guidance.
Speaker Change: We are affirming our full year revenue guidance of 4% to $4 1 billion. This represents a 6% increase from 2023 total revenue at the midpoint.
Speaker Change: We're also affirming neuroscience revenue guidance of $2 85 to $2 $95 billion.
Speaker Change: As a 3% increase from 2023 revenue also at the midpoint.
Speaker Change: Based on the temporary impact to <unk> revenue, resulting from treatment protocol updates that Bruce and I spoke to earlier, we are lowering our oncology revenue guidance by $20 million to 108 to $1, one 3 billion.
Speaker Change: We continue to expect total revenue growth for 2024 to be driven by double digit percentage growth of sideways dialogues and <unk> combined.
Speaker Change: Moving on to the next slide and non-GAAP adjusted guidance, we are maintaining our prior SG&A guidance and lowering R&D guidance by $20 million to $790 million to $830 million.
Speaker Change: The reduction in expected R&D spend is primarily driven by ongoing strategic pipeline prioritization, including in response to clinical data readouts.
Speaker Change: We continue to direct investments to programs with the potential for highest impact.
Speaker Change: Our effective tax rate guidance remains at a range of 10% to 12%.
Speaker Change: Adjusted net income guidance remains unchanged at $1 $2 $75 billion to $135 billion.
Speaker Change: While we are increasing our EPS range to reflect the impact on our share count of our election to solve a principal amount of our 2026 convertible notes in cash as well as the share repurchase done in conjunction with the issuance of our 2030 convertible notes.
Speaker Change: Yes.
Speaker Change: I'd also highlight that operating margin for the quarter was approximately 49%, bringing year to the operating margin to 43% in line with our full year guidance.
Speaker Change: Before I turn it back over to Bruce for closing remarks, I wanted to call your attention to some additional information posted on our website.
Speaker Change: In conversations with investors and analysts since joining jazz some investors expressed interest in getting greater visibility into the geographic breakdown of our revenue and others asked for greater clarity on how you arrive at the shares outstanding for our GAAP and non-GAAP EPS calculations.
Speaker Change: On our website you will find an excel workbook that contains historical information responsive to these requests.
Speaker Change: I Hope you find this information useful in analyzing our results and we'll continue to look for opportunities to enhance our disclosures in ways that are meaningful for investors.
Speaker Change: With that I'll turn the call back to Bruce for closing remarks.
Bruce: I'll conclude our prepared remarks on slide 20, our commercial execution in the quarter resulted in record quarterly revenue increasing the number of patients benefiting from XI wave with the addition of approximately 400 net patients exiting the third quarter compared to the second quarter and driving growth of up of dialects and our encore.
Bruce: Allergy franchise.
Bruce: Our R&D engine continues to be productive advancing our zany data Mab development program and generating data for <unk> that may enable us to reach more patients in critical need.
Speaker Change: And we continue to focus on operational excellence strategic and disciplined investments in our business and retaining our strong balance sheet, which enables future growth. We're excited about the future of jazz and believe we are well positioned to deliver growth and shareholder value.
Speaker Change: That concludes our prepared remarks, I would now like to turn the call over to the operator to open the line for Q&A.
Speaker Change: Thank you and we will now begin the question and answer session.
Speaker Change: If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.
Speaker Change: If you would like to withdraw your question Press Star one a second time.
Speaker Change: If you are called upon to ask your question and our listening via Speakerphone on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: To be able to take as many questions as possible. We ask that you. Please limit yourself to one question.
Speaker Change: Again, it is star one if you would like to join the queue.
Speaker Change: And your first question comes from the line of Jessica Fye with Jpmorgan. Your line is open.
Jessica Fye: Hey, guys. Good evening. Thanks for taking my question I was wondering on XI waves can we think of the 150 net patient adds in narcolepsy as reproducible in the future.
Speaker Change: Big uptick from what we saw last quarter. So I'm curious, how you're thinking about that and if this might be the impact of the field nurse educator program, helping with persistence in the early treatment phase. Thank you.
Speaker Change: Yeah.
Speaker Change: Yeah. Thanks, Jeff I really appreciate the question. So definitely we are seeing greater persistency and benefit from the field nurse educator program. In addition to our wrap around services that we provide to both physicians and patients and not something that we see.
Speaker Change: A lot of focus on we think that's an important differentiator of <unk>.
Speaker Change: With respect to narcolepsy, we have seen some variability I think what's most important to focus on is what is the source of the demand is coming from new patient starts. It's also coming from patient transitions from high sodium ox debates, including reversion from Loomer eyes.
Speaker Change: The biggest factor that's driving the demand continues to be the ongoing appreciation of the benefits of low sodium by physicians and patients keep in mind Xyrem is the only activate therapy that doesn't carry a warning related to <unk>.
Speaker Change: High sodium intake so as we look holistically at the business. We're really pleased with that 150 net patient add for the quarter. We are seeing definitely improved persistency from the field nurse educator program as I've mentioned real appreciation continued appreciation of the.
Speaker Change: Low sodium messaging and importance in particular in this patient population, that's predisposed to cardiac cardiovascular conditions and then also it's worth noting that this is all underpinned by what we're seeing by our field teams, which is really strong focus on execution.
Speaker Change: And your next question comes from the line of Jason <unk> with Bank of America. Your line is open.
Jason: Hey, guys. Thanks for taking my questions.
Jason: <unk> I'm wondering.
Jason: If you can kind of help us frame. The Reg path is this submission just on the phase III results alone is there any implications to this phase III lagoon study being confirmatory or does the frontline data this kind of stand on its own and it would be its own unique I guess indication.
Jason: Thinking about the commercial.
Jason: <unk> opportunity I mean, you havent given detailed data, but presumably you said it is clinically meaningful.
Jason: It's adding a few months of PFS. So should we just think about this is expanding the market about 7000 patients.
Jason: Adding a couple of cycles of therapy is that the right way to be thinking about sort of the relative impact here. Thanks.
Jason: Yes. So happy this is rob thanks for the question Jason.
Jason: So the phase III trial, which we said resulted in.
Jason: Not only statistically significant with a clinically meaningful benefit in PFS and overall survival, which was on an interim analysis. We think those data stand alone would support an expansion of the label into a frontline indication and as we said we're working as quickly as possible.
Jason: To get a submission and ultimate approval in frontline, we think this will be.
Jason: This will change the standard of care in frontline therapy, and we said that submission is planned for first half of.
Jason: Next year.
Jason: Part of your question was could that also be confirmatory to our existing accelerated approval in second line. We think it can it may depend ultimately on the timing of this submission relative to when the lagoon data would come in but we certainly think these data demonstrate the benefit of some soccer.
Jason: In frontline on.
Jason: That has.
Jason: Knock on effects for the overall activity of that whether it's used in frontline <unk>.
Jason: And second time.
Jason: As we said in the past there is about 30000.
Jason: New small cell lung cancer patients every year.
Jason: Maybe 27000 of those are.
Jason: Our extensive stage.
Jason: And.
Jason: And then kind of fraction of those are treated so we do think that it's a larger number of patients who are likely to have.
Jason: A longer duration of therapy as well.
Jason: Okay.
Speaker Change: And your next question comes from the line of Marc Goodman with Leerink Partners. Your line is open.
Marc Goodman: Yes, hi.
Marc Goodman: Can you give us your latest thoughts on the Orexin class. The recent data releases from competition, how youre thinking about it and what can you share about your product for.
Marc Goodman: <unk> four one.
Marc Goodman: Any data that you can comment on any of the commentary on the adverse events that stop you from working on this before just anything more you can tell us about your product as well. Thank you.
Speaker Change: Yes, Rob why don't you jump in on our actions.
Rob: Yes, Im happy too.
Rob: So mark.
Marc Goodman: Field is certainly advancing especially in the <unk> space, but I would say, it's still relatively early in a couple of respects.
Marc Goodman: One is that we don't yet know what the.
Marc Goodman: With the best in class profile would be certainly its one that is safe and well tolerated and over time, we'll see.
Marc Goodman: How these compounds compare one to the other with regard to things like potential for hepatic toxicity.
Marc Goodman: Potential for urea visual disturbances or even in some they're based.
Marc Goodman: Based on possibly a longer half life.
Marc Goodman: We also think that the.
Marc Goodman: This class potentially has the benefit beyond empty one depending on the profile of the asset.
Marc Goodman: <unk>.
Marc Goodman: Hi age or even other <unk>.
Marc Goodman: Conditions in daytime sleepiness.
Marc Goodman: As we mentioned we have a plan B study next year.
Marc Goodman: With 441 at a dose that would evaluate.
Marc Goodman: That we would evaluate 91 patients where we think we have potentially a therapeutic index to some of the toxicities, we've seen and that will inform not only whether for for one could go forward.
Marc Goodman: Any of those indications.
Marc Goodman: But also potentially inform our backup program.
Speaker Change: And your next question comes from the line of Ami <unk> with Needham Your line is open.
Speaker Change: Hi, good evening, Thanks for taking my question.
Speaker Change: On the topic of signing.
Speaker Change: In Gea, you're conducting the horizon, one trial can you give us some sense.
Speaker Change: The phase two study what percent.
Speaker Change: Patients with PDL, one positive versus negative and if you saw any difference in the efficacy results across the two subsets.
Speaker Change: And just thinking about the basket.
Speaker Change: While.
Speaker Change: Maybe if you could just give some color on how.
Speaker Change: I believe that.
Speaker Change: And sign books.
Speaker Change: Some work before you guys took on Danny.
Speaker Change: Other cancer types.
Speaker Change: This basket trial.
Speaker Change: Likely to be broader and kind of what it might be exploring thank you.
Speaker Change: Sure. Thanks, Toni so Rob.
Rob: Yeah happy to take that risk.
Rob: On the first one in terms of the data we've published front.
Speaker Change: <unk>.
Speaker Change: We haven't looked at the PDL one status, but we also don't think in that.
Speaker Change: You are at least yet.
Speaker Change: We don't think that that has any bearing on whether it's on a data map would be.
Speaker Change: <unk> in that setting.
Speaker Change: Overall.
Speaker Change: We think the epidemiology suggests maybe about half of patients are PDL, one positive depending on how you define that and how you define it certainly is important because it should be defined in terms of what the cutoff is.
Speaker Change: That would predict benefit from the use of the PD, one or PDL one.
Speaker Change: <unk>.
Speaker Change: In terms of the Pan tumor study that we just started.
Speaker Change: Right, we do have a broad experience from phase one and from different cohorts. We've run in patients who are over expressing her two and what we find is wherever patient through over over expressing her too we see strong activity with Santa data Mab and based on its differentiated mechanism of action, we think that compares favorably to other <unk>.
Speaker Change: <unk>.
Speaker Change: Been tested across a variety of tumor types. So what's the pan tumor study allows us to do is extend that.
Speaker Change: Experience, especially in.
Speaker Change: A variety of rare tumors.
Speaker Change: Who are naive to her two therapies that could ultimately depending on the results could ultimately.
Speaker Change: Support an expanded label. It also allows us to get some additional data in patients who are experienced with other her two agents.
Speaker Change: Such as in breast cancer, and gastric cancer with monotherapy.
Speaker Change: But overall could support a pan tumor indication as well.
Speaker Change: And your next question comes from the line of Gregory Renzo with RBC capital markets. Your line is open.
Speaker Change: Hi, Thank you so much for taking our question this support on for Greg and continuing on study just curious with respect to the opportunity in biliary tract cancer could you share with us perhaps your current thinking on how to peak assumption.
Marc Goodman: Looked like and how does it ramp to that peak assumption that looked like in in second line <unk> cancer. Thank you.
Marc Goodman: Yes.
Speaker Change: I think with respect to how to think about the ramp.
Marc Goodman: Important to remember.
Marc Goodman: Keep in mind, we don't provide product specific guidance, but I would just remind you that BTC represents a very small patient population and therefore with this first indication that we're going after the revenue expectations are quite low.
Marc Goodman: When we think about BTC. This is a rare cancer about 3000 patients in the U S. In the first line and second line. However, it is also a devastating cancer with five year survival rates less than 5% in the metastatic setting and so for this reason we feel very strongly in bringing the therapy forward for patients with <unk>.
Marc Goodman: Quickly as possible, but this is not the largest opportunity set now.
Marc Goodman: With that being said, we do see a much broader opportunity one being two plus billion dollars in peak with those larger opportunities coming from gea.
Marc Goodman: On target to readout in the second quarter of next year, and then of course metastatic breast cancer and also now the Pan tumor study underway.
Speaker Change: And your next question comes from the line of Jason Joseph Tony with TD Cowen Your line is open.
Speaker Change: Hi, This is <unk> on for Joe Thanks for taking our questions I guess sticking with the Gea study and as any data on that.
Speaker Change: How important is it for the study to hit both on the doublet RMB and the triplet RBC.
Marc Goodman: Primary endpoint.
Marc Goodman: Do you think that there would be a path forward. If you see any benefit in one of their success.
Marc Goodman: And could you maybe walk us through different scenarios for the data readout.
Speaker Change: Yeah Ravi.
Ravi: Yes, thanks for the thanks for the question so.
Ravi: Youre absolutely right. The trial is set up so that we have two shots on goal there as a control arm and then theres any plus chemo than theirs Zani chemo with the addition of <unk>, which is a PD one inhibitor.
Ravi: And certainly for approval, which we think would be supported on the basis of progression free survival data as long as the trend in overall survival is going in the right <unk>.
Speaker Change: Our action.
Marc Goodman: For approval, we need to show benefit.
Marc Goodman: Either arm.
Speaker Change: Over the control arm.
Speaker Change: The firm that includes the PD, one agent that has to be incrementally better than Danny and chemo. So called contribution of components and so we think we will need to demonstrate that.
Speaker Change: But certainly it gives us two shots on goal.
Speaker Change: Confidence based on.
Speaker Change: The data that had been published in the two cohorts with first line that <unk>, plus chemo will do very well.
Speaker Change: Our list of patients PD lone status as I mentioned before.
Speaker Change: And the addition of PD one gives us another.
Speaker Change: Opportunity because it's clear that for patients who truly are PD lone positive.
Speaker Change: <unk> can incrementally improve the benefit.
Speaker Change: And your next question comes from the line of <unk> <unk> with Jefferies. Your line is open.
Anastasia: Hi, This is Anastasia on for <unk>. Thanks for taking my question.
Speaker Change: And earlier that you have a phase III any plus chemo in a posting her to her two plus breast cancer setting could you give us some more details on that maybe like the development plans that is on timing if youre planning any additional studies and what that patient opportunity might look like relative to <unk> and maybe just how confident you are in the heart to resistance mechanisms pressing hard to use.
Speaker Change: Yeah. So thanks for the question.
Speaker Change: I'll start with the last part of it we really feel that sounded data mab as a highly differentiated best in class or two agent and that's based on published data not only on the mechanism of action and preclinical data, which you can find in nature communications, but the steady stream of very encouraging data across different tumor types and different car.
Speaker Change: Combinations and that includes.
Speaker Change: Several different.
Speaker Change: Several different cohorts of breast cancer patients.
Speaker Change: <unk>, we see with the now ongoing phase III trial.
Speaker Change: Is to generate data in those patients who are either intolerant to or progressed on TD XD as TD XD.
Speaker Change: Taken a foothold in second line and potentially moves up into frontline. That's the main data gap what to treat patients with.
Speaker Change: Once they progressed on TV XD, we think we have a growing body of data that supports the use of data <unk> in that setting it's differentiated.
Speaker Change: We see activity in patients who progressed after trastuzumab in <unk> patients, who progress after PD, one as well PD, one as well as TD XD.
Speaker Change: And so that's the basic concept here is that we'd be the first to generate data in the space and it's going to be significant.
Speaker Change: Met need and we hope to be the first tend to that place into that space. The basic design is for patients.
Speaker Change: And that third third line plus space.
Speaker Change: A physician would choose the backbone chemotherapy and then they would be randomized to receive data math on top of that or Trastuzumab and these would be patients who had already progressed on trastuzumab, where the standard of cares otherwise fairly unclear. So we think our data are very supportive.
Speaker Change: Winning in that space.
Speaker Change: And your next question comes from the line of Annabel Sammy with Stifel. Your line is open.
Speaker Change: Hey, this is <unk>, calling in for Annabel.
Speaker Change: Thanks for taking my question and it's related to that.
Speaker Change: You guys showed efficacy in the first line maintenance setting.
Speaker Change: <unk> now have a better idea of what the peak opportunity could be for the product and.
Speaker Change: How do you think physicians will.
Speaker Change: <unk>.
Speaker Change: We received the data and will they be quick to adopt it.
Speaker Change: Then on the flip side does that take away.
Speaker Change: From the second line setting.
Speaker Change: Yes, I'm happy to jump in on that so first of all we're really excited about the results in the first line trial as Robert mentioned earlier, we do think it will be practice changing and we look forward to sharing the full data set in the future.
Speaker Change: With that being said as we look at where we are today. It's important to note that until we have approval, we won't be actively promoting on the first line indication of course.
Speaker Change: Would expect we will get you once we are adopted by NCC and guidelines.
Speaker Change: But until we get the data out there we would not expect a ton of youth in the first line.
Speaker Change: In the meantime, we're continuing to see strong use of <unk> in the second line, even with <unk> on the market.
Speaker Change: We have several years of being the standard of care in second line, we have physicians getting a lot of experience with <unk> and we've got a lot of positive response regarding its clinical benefit ease of use.
Speaker Change: Call it as given in the outpatient setting and doesn't require in patient monitoring and so we think this will bode very well for adoption in the first line. Once the data is available and as Rob had mentioned earlier, there's about 27000 patients in the first line the vast majority of those being extensive.
Speaker Change: Stage. So we do expect an overall increase to the revenue opportunity given that once we get into first line will be looking at a larger patient population.
Speaker Change: As well as longer treatment duration.
Speaker Change: Rob did you want to jump in as well.
Speaker Change: Yes.
Rob: As we said before we do think these data are practice changing we haven't shared the.
Rob: The data themselves, but we have said not only stat, sig, but clinically meaningful differences on both PFS and overall survival and remember that overall survival was at the time of a plant.
Rob: Interim analysis. So we think given that we're going to move as quickly as possible. We think it's a compelling case.
Speaker Change: And.
Speaker Change: And physicians will find the data compelling as well and there'll be significant uptake there as I mentioned before that does mean that.
Speaker Change: That it's a larger pace.
Speaker Change: Patient population that we can address and we currently can.
Speaker Change: In second line, we do expect it to be a longer duration of therapy remember patients typically do not get a complete remission after their chemotherapy induction and so they have active residual disease.
Speaker Change: The current standard and essentially waiting to progress and so this is preemptively treats those patients rather than waiting for clinical progression in second line and I think Thats just now the data show that.
Speaker Change: It gives them an opportunity to benefit for a longer period of time. So we do think it's more patients for a longer period of time.
Speaker Change: If a patient has received <unk> in.
Speaker Change: In frontline and remember unlike traditional induction chemotherapy patients will get settled Alka and.
Speaker Change: Until progression. So we do think in that case. They wouldn't then go on to get some sonoco again et cetera.
Speaker Change: But the point is that we will preemptively use <unk>.
Speaker Change: Which access for more patients for longer durations.
Speaker Change: And your next question comes from the line of David <unk> with Piper Sandler Your line is open.
Speaker Change: Okay.
David: So my questions also on.
Speaker Change: Okay.
Speaker Change: And specifically wanted to.
Speaker Change: To get your thoughts on the exclusivity runway for the products on the Orange book <unk> got a.
Speaker Change: Pat in exploration.
Speaker Change: December of 2009.
Speaker Change: And then you have orphan exclusivity expiring in 2007 with the first line.
Speaker Change: Do you expect to get.
Speaker Change: And <unk> an extensive stage.
Speaker Change: First one.
Speaker Change: How should we think about.
Speaker Change: Exclusivity runway it may or may not change with the first line data. Thank you.
Speaker Change: Yes so.
Speaker Change: Just to jump in here in terms of thinking about the exclusivity.
Speaker Change: One way I don't think were in a position to speculate right now on any particular updates.
Speaker Change: We're thrilled with the data that we've recently generated as we said, we really look forward to sharing that and getting that out into the.
Speaker Change: The market to be able to drive further understanding of the use of <unk> in the first line, but I would say any further updates on IP changes over time as a result of this would be something that we would update at the time that might be relevant.
Speaker Change: Your next question comes from the line of Andrea <unk> with Goldman Sachs. Your line is open. Thank you for taking our questions. I was just wondering here if you could provide more color on the pipeline prioritization that you mentioned and how we should think about the makeup of the portfolio now and then given these change.
Speaker Change: How does that impact your appetite for potential BD transactions, whether it be in neuro versus oncology. Thanks, so much.
Speaker Change: Yes, maybe I'll take the first part of that and then Phil happy to have you jump in on the piece of it.
Speaker Change: In terms of portfolio prioritization, we are always trying to invest in those programs that we think have the most potential particularly after we've done some de risking or proof of concept work, we clearly prioritize any data mab.
Speaker Change: First among our.
Speaker Change: Existing pipeline assets.
Speaker Change: Given the potential broad applicability of that molecule and our excitement about that and in multiple.
Speaker Change: Settings.
Speaker Change: We do have some earlier programs, we don't talk about as much on these calls, but youll see are progressing.
Speaker Change: You always get more information on that on our website.
Speaker Change: And then we do see some variation in R&D spending quarter to quarter, depending on exactly what phase of clinical trials, where in some cases milestone payments.
Speaker Change: We're in partnered program, so I wouldn't read too much.
Speaker Change: Into that particular comment Phil on Corp Dev.
Speaker Change: Yes, Andrew I'd put it in the context of our overall capital allocation. So clearly we're seeing great growth among a number of our products that are currently on the market. So we're ensuring that we're putting the right.
Speaker Change: Investment behind those to maximize the benefit to patients as well as the revenue to jazz.
Speaker Change: And then prosecuting the pipeline. We currently have in house, where as you heard on the call Sandy data map really is sort of the key to that near term and medium term pipeline.
Speaker Change: And then we are looking to continue to bolster our future growth prospects through Corp Dev.
Speaker Change: I would say anytime you have negative readouts that probably increases the desire to do things, obviously, we've got positive readouts and things are advancing.
Speaker Change: That creates some of the internal movement that may obviate the need for some of the BD Our Corp Dev <unk>.
Speaker Change: Definitely are active looking at a variety of opportunities not only in oncology, but also in neuroscience as well as in select rare opportunities, where we think we can deploy our.
Speaker Change: Capabilities footprint to benefit patients and rapidly bring innovative new therapies to market. We do have very strong cash flow as I mentioned earlier on the call.
Speaker Change: And accessibility to capital, whether that's cash on the balance sheet or through the debt markets to back those Corp Dev efforts.
Speaker Change: And your next question comes from the line of Jeffrey Hung with Morgan Stanley. Your line is open.
Speaker Change: Hi, This is Michael on for Jeff <unk>. Thank you for taking our questions circling.
Speaker Change: Circling back to the discussion on the <unk> program for the Phase one B do you have any additional color you can provide on the level of dose reduction you would go forward with four for one in Q1.
Speaker Change: And would there be enough leeway to potentially accommodate expanding to other types of narcolepsy alright. Thanks, so much.
Speaker Change: Yes, we haven't we haven't yet disclosed the doses that we'll evaluate in the in the study that we described but we will look at multiple doses because part of the goal there is to really understand realm.
Speaker Change: Relative to what we observed in healthy volunteers, where we think we had a very robust effect.
Speaker Change: What's the dose that we're going to need an empty one obviously, we bought other programs and we kind of see.
Speaker Change: The relative dose in healthy versus what they've observed in tier one and so we need to see where we land where we think we have enough of the safety margin and that will ultimately dictate whether we have a path forward in 91 or in other indications, where you're likely to need higher doses. So it is really the goal of this study to better characterize.
Speaker Change: Some of the aspects you highlight.
Speaker Change: And your next question comes from the line of Joon Lee with <unk>. Your line is open.
Joon Lee: Hey, Thanks for taking our questions. It's nice to see <unk> growth at the dialogue six years since the launch how much of it is geographic expansion versus greater penetration as for the former what gives you confidence in approval in Japan and for the latter is there a particular secondhand core lineup skus within epilepsy, that's driving growth.
Joon Lee: Thank you.
Speaker Change: Yes. Thanks for the question I'll start out with comments on what's happening with the business currently and then ask Rob to jump in to talk a bit about the path forward in Japan.
Joon Lee: So I would say without the dialect, we're really pleased with the growth that we saw 18% year over year. Its our highest net sales quarter to date with more than $250 million in sales. So you can see we are well on our way to having a 1 billion dollar franchise.
Joon Lee: What's driving the growth we continue to have at the dialects just seen as a highly differentiated product.
Joon Lee: That starts with the data first and foremost we have a robust body of evidence that supports both the seizure and non seizure benefits in that non seizure benefits data really resonates with physicians and caregivers on those benefits such as cognition behavior and national social function.
Joon Lee: So that is a very strong differentiator for at the dialects and having an impact in the market also seeing really strong execution from the teams here focused on our key drivers of growth. We've had good momentum in the adult and long term care setting.
Joon Lee: Within the U S. We've provided some new screening tools there that we talked about earlier, we have breadth and quality of our access thats continuing to improve that's both in the U S. But also some multiple positive reimbursement decisions outside the U S.
Joon Lee: Also in how we're operating we've made some structural changes to how we're organized and how our field teams collaborate.
Joon Lee: That is having a positive impact in terms of our effectiveness and we're piloting some new programs, where we're also seeing some early success in the U S. We talked about the virtual.
Joon Lee: Nurse Navigator program, we've rolled out new campaigns, some highly targeted consumer ads and even added a few virtual account manager positions and the good thing about doing. These pilots is you can see what's working you can invest more behind them and then really drive greater growth by understanding whats had.
Joon Lee: And impact.