Q3 2024 Krystal Biotech Inc Earnings Call
Okay.
Speaker Change: [music]. Thank you for holding we sincerely appreciate your patients stay on the line and we'll be back in a moment.
Speaker Change: Thank you for standing by and welcome to Crystal Biotechs third quarter earnings Conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
Speaker Change: During the question and answer session, there will be a limit of two questions per participant.
Speaker Change: As a reminder, today's conference is being recorded I would now like to hand, the conference over to your host Stefan Puckett, Vice President of corporate development. Please begin.
Okay.
Stefan Puckett: Good morning, and thank you all for joining today's call.
Stefan Puckett: Earlier today, we released our financial results for the third quarter of 2024.
The press release is available on our website at Www Dot Crystal bio Dot com.
Stefan Puckett: We also filed our earnings 8-K, and 10-Q with the SEC earlier today.
Stefan Puckett: Joining me today will be.
Stefan Puckett: Krish Krishnan, Chairman and Chief Executive Officer.
Stefan Puckett: Zuma Krishna President of research and development.
Jennifer Mcdonough.
Stefan Puckett: Your vice president of patient access analytics and operations.
Stefan Puckett: Christine Wilson Senior Vice President and head of U S sales and marketing.
Stefan Puckett: Romano Chief Accounting officer.
Stefan Puckett: This conference call will and our responses to questions may contain forward looking statements.
Stefan Puckett: You are cautioned not to rely on these forward looking statements, which are based on current expectations and information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected.
Stefan Puckett: A description of these risks uncertainties and other factors can be found in our SEC filings.
With that I will turn the call over to Chris.
Stefan.
Chris: Good morning, and welcome to the call.
Stefan Puckett: Look as I mentioned in my PR attribution.
Stefan Puckett: We're well on our way to achieving the two year target that we set at the time of the launch.
Stefan Puckett: And by comparison to any other launch in orphan diseases or genetic therapies.
Stefan Puckett: We believe our launches exceeded all expectations to date.
In my mind there are.
Stefan Puckett: Our two primary drivers for this success.
The first obviously being the drug itself with all the time attributes of efficacy safety patient convenience et cetera.
Stefan Puckett: And the second being our assiduous focus.
Stefan Puckett: On patient and physician experience.
Stefan Puckett: We have allowed the physician and the patient to drive demand at a pace, they're comfortable with and its been devoting.
Stefan Puckett: Especially in an indication where the expectation is that they will be on drug for a long time.
Stefan Puckett: On top of that global opportunities advisory work come into focus.
Stefan Puckett: Ophthalmic formulations is progressing towards a registrational study in the next few months.
Stefan Puckett: And so we're starting to see increasing upside in the total market opportunity for device Vivek franchise.
Overall.
Stefan Puckett: As we work towards treating that patients.
Stefan Puckett: Globally and comprehensively.
Stefan Puckett: In Europe we're.
Stefan Puckett: We are presently on track for a C O M P opinion before yearend.
Our recent breakthrough it hey, J S.
Stefan Puckett: Planning early reimbursed access in France.
Stefan Puckett: It reflects the significant demand for advisory work in Europe.
And with our J NDA submitted last month.
Stefan Puckett: We're also on track for the 2025 launch in Japan.
Stefan Puckett: And so all preparations are underway for launch in EU for UK.
Stefan Puckett: In Japan.
Sequentially.
Stefan Puckett: Next here.
Meanwhile, we had a positive readout for <unk> <unk>.
Stefan Puckett: <unk> hundred one in Q3, where we saw clear efficacy signals.
Stefan Puckett: And that propels us forward to a phase two study expected to start next year.
Stefan Puckett: And also continue to work on the <unk> pipeline.
That was the first of many data readouts upcoming from our deep clinical stage pipeline.
We're looking forward to reporting on two more programs before year end <unk>.
Stefan Puckett: Including our first data on hedges to be one based gene delivery to the lung.
Tissue that has to date been hard to reach with the other approaches.
Stefan Puckett: So both on the commercial and clinical fronts.
Stefan Puckett: Sighted and look forward to the rest of 2024 and 2025.
Finally.
Stefan Puckett: I'm happy to report that Crystal was again profitable this quarter.
At 95 per share up sequentially from 54 cents per share in the second quarter of 2024.
Stefan Puckett: In Q3.
We accrued $12 5 million and litigation expenses.
Stefan Puckett: Once again mitigated our EPS.
Stefan Puckett: As it did in our two prior quarters.
Stefan Puckett: This is the final accrual related to the litigation expense.
Stefan Puckett: And there will be no additional litigation accruals moving forward.
Stefan Puckett: With increasing profitability.
Stefan Puckett: <unk> balance sheet.
Stefan Puckett: And upcoming expansion of our advisory work franchise, both in the U S and through ex U S launches.
Stefan Puckett: And our eye drop formulation.
Stoked about both the near term and the long term outlook for Crystal.
Stefan Puckett: Moving now to our results net revenue for the Q came in at $83 $8 million.
Stefan Puckett: While gross margins in <unk> continue to behave as expected.
Stefan Puckett: Thanks to the strong growth we achieved this quarter.
Stefan Puckett: Total net voyage revenue since launch in August 2023 has already surpassed $250 million.
Stefan Puckett: Achieving this milestone.
Stefan Puckett: A little over a year after our first sale is a tremendous achievement for our organization and a testament to the value <unk> is providing to patients suffering from DB.
Also.
Stefan Puckett: Please note that net revenue reported today again includes an accrual for patients on contracted commercial plans, who are projected to potentially hit the cap of $900000 gross per patient per calendar year in 2024.
Stefan Puckett: With that I'll hand, it off to Jen and Christine to share more detail.
Stefan Puckett: On our recent accomplishments.
Speaker Change: Strong fundamentals, which we expect will sustain our launch for years to come.
Stefan Puckett: Jan Thank you crash I am pleased to report another quarter of strong baidu that access growth across the U S. In spite of summer seasonality headwinds as our team works tirelessly to help more and more patients gain control over this terrible disease.
Stefan Puckett: As of October and the number of patients with reimbursement approval is that to over 460.
Stefan Puckett: Reimbursement approvals were modestly impacted by transient summer seasonality effects in this quarter.
Stefan Puckett: These scheduling disruptions are now behind us more importantly, thanks to our flexible support infrastructure that adapts to patient schedules and timelines, we have been able to keep patients and their applications for reimbursement on track to achieve positive access outcome.
Stefan Puckett: Reimbursement approval splits are largely in line with recent quarters and roughly evenly split between commercial and government plans.
Stefan Puckett: We will continue to come across the entire that patient population, including patients of all ages and with either dominant or recessive forms of the disease.
Stefan Puckett: With near complete coverage for commercial and Medicare lives nationwide. The access provides a strong this has enabled us to achieve a 100% success rate on reauthorization all have either been approved or are in process and sets us up well for sustained success in the U S.
Stefan Puckett: Our crystal connect team works closely with the home health care providers employing a patient centric approach that focuses on patient needs and preferences. The team navigate things such as summer vacation family activities working back to school schedules to successfully integrate weekly treatments into the family's normal routine.
Stefan Puckett: Patient preference for at home administration is effectively unchanged inherently 97% of the weekly treatments occur in a home setting.
Stefan Puckett: With now over one year of rollout experience the team is developing and implementing strategies to ensure patients receive the best possible experience, starting and staying on by GM back. This includes developing enhanced education tolls and other resources for patients and nurses.
Stefan Puckett: We focus on topics such as preparing for treatment practical considerations for wound selection and options for hydrophobic dressings.
Stefan Puckett: Neither every patient has unique needs and the impact of the disease varies for each patient or programming resources include regular touch points to support monitoring treatment progress and identifying potential issues early and addressing them promptly.
Speaker Change: While we continue to see a high compliance to weekly treatment at 87% across our dad patient population, including new starts for both recessive and dominant dystrophic Hebei. Please note that for some patients that had been on <unk> for over an extended period of time in particular, who have participated in our <unk> study we are seeing.
Speaker Change: A maintenance treatment patterns of marriage.
Speaker Change: This includes cycling between periods of treatment pauses due to wound closure.
Early and we believe it would be premature to estimate the frequency or the duration of treatment pauses. We can't expect reported compliance weekly treatment across the entire patient base to trend down in upcoming quarters.
As we continue our launch Crystal connect team is fully focused on ensuring patients have a food experience starting and staying on therapy, we are developing and investing in strategies that lead to better treatment outcomes and overall satisfaction. We are building long term patient relationships and are committed to providing sustained worry free access to corrective therapy.
Speaker Change: Where and when they need it.
Speaker Change: I will now hand, it off to Christine to discuss recent sales and marketing activities, which have us on track to hit our most ambitious prelaunch penetration targets Christine.
Christine Wilson: Thank you Jan as John just mentioned at launch we set an ambitious target for the commercial organization. We established a goal of 60% penetration of the identified patient pool equating to roughly 720 reimbursement approvals within two years of launch.
I'm happy to say that based on our progress to date, our ongoing sales and marketing efforts and the sustained demand we are seeing in the field. We remain on track to achieve this goal.
Speaker Change: Our core commercial strategy focused on the three pillars of claims analytics medical education and patient activation is paying off we are.
Speaker Change: Strong demand across both key centers and in the community as we continue to drive awareness of <unk> and the real world impact of health care professionals patients and caregivers.
Speaker Change: Health care professional education remains a major focus.
Speaker Change: We continue to educate physicians and their support staff on how about you that is the only FDA approved therapy that treats the genetic cause of death sharing the clinical data that supports long term use in wound healing for all patients from.
Speaker Change: From localized to severe disease and showing the stunning railroad results patients are staying at home.
Speaker Change: In addition, we are working with physicians, particularly those in the community who may not regularly see seed that patient.
We keep them on the streamlined process for getting their patients started on Apache attack.
Speaker Change: This is a high touch customer centric model that delivers a positive onboarding experience for both the prescriber and the patient the.
Speaker Change: The prescriber base expanding over 70% of the prescribers in <unk>, where new writers.
Speaker Change: Demonstrating that our targeting efforts are effective and that both kols and community physicians see the value of <unk> and ease of prescribing.
Speaker Change: We have also made significant progress recently in our direct to consumer outreach. We are now live on all plans social media channels showcasing real world experiences for both pediatric and adult patients some of whom have been on therapy since 2020.
Since January of this year, our paid social direct to consumer advertising has served over $31 3 million impressions.
Speaker Change: Acting perspective patients and caregivers with Iga back.
Speaker Change: The <unk> launch into new social platforms, along with lead generation advertising on social media will continue to drive user engagement and expand our reach.
Speaker Change: Finally, as part of our annual recognition and support of EDI awareness week, which took place just last week. The crystal team hosted educational Webinars for our target physician audience as well as sponsored patient and caregiver or webinar in conjunction with one of our advocacy partners.
These live Webinars feature dermatologists with real World Jibe, and <unk> experience as well as the <unk> treated patients sharing their personal experience of the positive impact that <unk> has brought to their condition.
Speaker Change: Members of the Crystal team also attended the <unk> America benefit during ebay awareness week, which honors those in the EP community and champions, our ongoing mission to advance <unk> research and patient care.
These are just a few highlights from our ongoing commercial efforts to drive awareness streamline of physician experience and help more patients get on treatment faster.
It has been deeply rewarding to see these efforts translate into reimbursement approvals and with continued education. We are optimistic that we can achieve not only the near term targets, we are sad, but ultimately grow well past them in later years.
Speaker Change: Now I will hand, it off to assume that the sharp pipeline results.
Stefan Puckett: Thank you Christine.
Stefan Puckett: Our development team continues to execute at a high level.
Speaker Change: And over the past few months via the key key milestones do not only broaden that patient access, but also advance our diverse pipeline of re dosing both genetic medicines.
Speaker Change: Leading off with an update on the global development of buyback.
Steady progress has poised for commercial launches in both Europe, and Japan next year.
Europe EMEA review of a marketing authorization application is progressing well.
Speaker Change: <unk> GMP certification was granted for a commercial manufacturing facility anchoress earlier this year.
Speaker Change: Our latest interactions with the EMA suggest support for home dosing and a broad label, including that patients from Buck.
Speaker Change: Based on the current pace of discussions, we expect and see it.
Speaker Change: B decision before the end of the year.
Stefan Puckett: And our first launch in Germany in the first half of 2025.
In the interim we also achieved and axis.
Stefan Puckett: Two in France in September at <unk> This Sunday in France.
Stefan Puckett: <unk> pre marketing early reimbursed taxes to be back under the <unk> program.
That patient access to be back I know Edp, one is expected to start later this year.
<unk> one allows for early access to innovative therapies in France prior to European regulatory approval.
Stefan Puckett: And as a reflection of the strongly positive benefit risk ratio provided by B back in a patient population with high unmet need.
In addition to rapidly broadening patient access in France. This approval also provide physicians with the opportunity to build clinical experience with the back even in advance of commercial launch.
In Japan, we also achieved a major milestone with the recent submission of our Japan, new drug application.
Stefan Puckett: Our application to the Japanese authorities include the results of our open label extension study in Japanese patients image overall results closely mirrored those from a registrational phase III trial.
Stefan Puckett: Having previously received orphan drug designation by Japan's pharmaceutical and medical device agency, we expect a priority review putting us on track for both a decision by Japanese authorities as well as launch in 2025.
Shifting focus to our broader pipeline. We are very excited to report the first of many upcoming data Readouts last quarter.
In this data readout for use aesthetics.
Stefan Puckett: <unk> hundred one we reported clear and clinically significant improvement and not fully wrinkles, but many other skin attributes, including radiant hydration and creepiness.
Stefan Puckett: This robust efficacy signal taken together with our previous reports of durable benefit.
<unk> <unk> hundred one as a potentially transformational product in the field of regenerative aesthetics.
We look forward to progressing gave me 301 into phase two next year.
This is just the beginning.
Before the end of the year, we expect to disclose interim updates.
On the K before eight <unk> $7 seven programs.
<unk> hundred eight is a reversible inhaled therapy.
Stefan Puckett: Alpha one antitrypsin deficiency, which is currently being evaluated in a phase one turpentine one study.
<unk> one is an open label single dose escalation study in adult patients with <unk> to allow assessment of safety Tolerability.
Stefan Puckett: Also one antitrypsin levels and key Pharmacodynamic biomarkers.
With strong enrollment in our recent protocol amendment to include Bronchoscopy in cohort two.
Stefan Puckett: We hope to provide interim molecular data before the end of the Oh.
Stefan Puckett: Oh readout, we expect to showcase the significant potential of HSV, one for gene delivery to the lung.
<unk> 707 is a modified HSV one vector designed to deliver genes encoding both human <unk> and IL two to the tumor micro environment and promote systemic immune mediated tumor clearance.
Do formulations.
Stefan Puckett: <unk> for the <unk> injection and.
The other part delivery why installation are being evaluated in phase one dose escalation and expansion studies.
Stefan Puckett: Both studies are enrolling well.
And with this phase we expect to share an interim data update focused on safety and early immune profiling data before end of the year.
I'm also happy to share that intra tumoral <unk> seven was granted a rare pediatric disease designation for the treatment of rhabdomyosarcoma.
Both inhaled and into tumor can be 707, as now being granted rare pediatric disease designation and fast track designation by the FDA.
We expect additional data update in 2025, including follow on updates on our oncology programs as well as initial data from our ongoing phase one study evaluating inhaled <unk> $4 seven for cystic fibrosis.
We recently activated two additional clinical sites in our phase one coral one study evaluating <unk> hundred seven and are now on a path to report into molecular data for <unk> four seven in the first half of 2025.
Finally, we are on track to both stock.
And report interim data from our Registrational trial highlight next year.
All right will be a single arm open label study designed to evaluate <unk> hundred three our newly developed ophthalmic formulations will be back.
The treatment of ocular complications in that patient.
In the interim we continue to enroll in a natural history study to prospectively collect data on the frequency of corneal abrasion in patients with depth.
This study will also serve as a run in period for patients, who maybe eligible to participate in our light and should enable us to accelerate enrollment in this registrational study.
We have entered an exciting period for crystal as we unveil trial results that we expect will highlight the versatility of our gene delivery program.
We look forward to sharing these updates as they unfold.
And advancing our pipeline of uniquely differentiated genetic therapies.
With that.
I would like to turn the call to Kate.
Kate: Thank you Sundar.
Kate: In the third quarter Crystal saw continued buys of that revenue growth with net product revenue of $83 $8 million.
Representing an increase of approximately $75 $3 million over the third quarter of 2023, which was the first quarter that we had revenue after our approval in may of 2023.
Kate: Cost of goods sold was $6 $7 million for the quarter or about 8% of net product revenue, resulting in a gross margin of 92%.
Kate: In the third quarter of 2023 cost of goods sold was artificially low at $223000. As a result of a significant portion of the cost to manufacturer being previously expense to research and development expense prior to product approval.
Research and development expenses for the quarter were $13 $5 million includes.
Kate: Inclusive of stock based compensation of $2 $3 million.
Compared to $10 6 million for the prior year's third quarter inclusive of $2 3 million of stock based compensation.
Kate: Higher research and development expenses in the third quarter of 2024 were due to increased clinical development costs increase.
Kate: Increased R&D related manufacturing costs for our pipeline candidates and increased R&D facilities and equipment costs this quarter.
Kate: These increases were partially offset by capitalization of direct and indirect over cost to manufacture advisor back being charged to inventories following our FDA approval.
Kate: Selling general and administrative expenses for the quarter were $28 $7 million inclusive of stock based compensation of $11 million.
Kate: Compared to $23 7 million for the prior year's third quarter inclusive of stock based compensation of $6 million.
Higher selling general and administrative expenses in the third quarter of 2024 compared to the prior year third quarter were primarily the result of increased commercial related professional service fees advisory back marketing costs.
Kate: The most significant increase in SG&A is related to the increase in stock compensation expense of <unk>.
Kate: $5 million quarter over quarter.
Kate: We again recorded litigation settlement expense this quarter of $12 $5 million due to our anticipation of reaching the third and final milestone payment in the periphery and settlement, which is triggered at $300 million in cumulative sales payable within 30 days following the filing of our Form 10-K.
And what's the $300 million milestone is achieved.
Kate: We now are fully accrued for the entirety of this matter and if achieved anticipate making the final related payments in early 2025.
Kate: Net income for the quarter was $27 2 million, which represented 95 per basic and <unk> 91 per diluted share we.
Kate: We have reduced and narrowed the range of our non-GAAP R&D and SG&A expense guidance, which is now expected to be between $115 million and $125 million for the full year ending December 31 2024.
Kate: As a reminder, this guidance excludes the noncash impact of stock based compensation.
Kate: Finally, we ended the third quarter with $374 million in cash on hand, and $694 $2 million in total cash plus short term and long term investments.
Kate: Marketing continued quarterly growth in our overall cash and investments position with an increase over our second quarter of 2024 cash and investments balance by about $65 million.
Kate: And now I will turn the call back over to Chris.
Chris: Thanks Kate.
Chris: So in closing I'd.
Chris: I'd like to highlight the significant potential for value creation in the years ahead.
Chris: To be driven both by both <unk> and our deep clinical stage pipeline.
Kate: Our advisory Rec launch, having already achieved over $250 million and net revenue is progressing very well.
Chris: However, as we saw in Q4 of last year.
Chris: We do anticipate some disruption over the holiday season.
Chris: Life gets in the way for many families.
Chris: That said our conviction in the overall trajectory of our launch remains unchanged.
Chris: More importantly.
Chris: This is only the beginning of the opportunity.
Chris: See for devices like printers.
Chris: In the coming years, we expect ex U S expansion.
Chris: Development and launch of our eye drop formulation for <unk> III.
Chris: Driving significant revenue growth.
Kate: Meanwhile, our <unk> 301 readout is a reminder of the significant yet to be tapped potential.
Kate: So we see in our pipeline.
Kate: With multiple Readouts coming up we think we're on the words of demonstrating the true potential of our head to three one based gene therapy platform.
Kate: And with the benefit of commercial scale in house GMP manufacturing infrastructure.
Kate: Growing revenues.
Kate: Five quarters of positive EPS.
Kate: We have the necessary resources to.
Kate: Pursued these opportunities efficiently.
Kate: And in such a way to maximize value for our shareholders.
Kate: Thanks for listening I would like to open the call for Q&A.
Speaker Change: Certainly at this time, we will be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time as a reminder, during the question and answer session. There will be a limit of two questions per participant we ask that.
Speaker Change: Posing your question you. Please pick up your handset if listening on speaker phone to provide optimal sound quality.
Speaker Change: Please hold while we poll for questions.
Speaker Change: Your first question for today is from Alec Stranahan with BLA.
Alec Stranahan: Hey, guys. Thanks for taking our questions just two from US first could you give us a sense of how many patients are at or near their annual cap. Currently is this something we should be looking for when.
Alec Stranahan: When we model sales into year end or should the new patient adds throughout the year sort of offset this.
Kate: And second I. Appreciate this data, it's probably it's still evolving but on the duration of wound closures overtime I'm curious if there's any trends coming out of your clinical studies you could point to for duration of wound closure, just trying to get a sense of how long of a pause due to relinquish could glass before a patient would need to receive therapy again.
Kate: Thanks.
Kate: Yeah.
Speaker Change: First question. This is Chris Yeah on your first question.
Kate: On how many patients are going to hit the cap.
Kate: Not particularly.
Kate: Closing that aspect of it you can kind of glean that what happens in the GDN and the whole point of cooling was to make sure there's no volatility.
Kate: With respect to net revenues in any of the quarters. That's the whole point and I think what I'm trying to make sure that the net revenue growth, it's pretty smooth over Q1, Q2, Q3 and Q4.
Kate: We'll have a bunch of medicines as we go further into the launch on that point.
Kate: With respect to duration of wound closure.
Kate: A couple of things I want to mention that.
Kate: Depending on the location of the wound.
Kate: The nature of the activities that can be pretty varied across individuals.
Kate: Our thesis is still to stick on even though we see much larger durations of wound closure in some patients.
Kate: Stick to the science behind it, but just given the half life of collagen.
Kate: Average wound to be durable for about 90 days.
Kate: And then can I also agree that mean, we get we are seeing very good clinical benefit without clothing and dancing durable, but also what happens is these patients are now increasing their activity Neil from basins now they can go out and do more physical activity. They can work as a result.
Kate: They see breakdown in the skin, but now they're very I mean, they want the wound to between just because they've seen the benefit of keeping buying to lag. So the patients are being extra cautious. So even if there was a cold I think they might open. They wanted to go back on so that's the trend that we see in the commercial setting.
Speaker Change: Makes sense. Thank you.
Speaker Change: Your next question is from Yigal <unk> with Citigroup.
Speaker Change: Alright, thanks very much.
Yigal: Just curious about your broader marketing campaign. So I think you mentioned something about the and a very broad footprint on the social media platforms.
Speaker Change: 1.3 impression can you comment to what extent, that's actually helping identify patients who are not obviously its a low conversion rate given the market size, but I'm just curious how thats working as far as identifying patients and if any of that effort has translated to a.
Kate: New starts.
Speaker Change: Sure Yeah. We're excited about our goal is to receive patients wherever they may be and our social media campaigns are allowing us to do that we are seeing that at the assignment of the patients that are not yet engaged or havent been engaged for some period of time with the health care system that is allowing to reach them.
Speaker Change: And engaged on it.
Kate: We accessing <unk>. So we are pleased as you mentioned the volumes well right from our patient base to begin with right as we're in the ultra rare space, but our opportunity to reach a revision and ultimately our goal and one by one we're getting there.
Speaker Change: Okay. Thanks, and then I think Chris on the last call. You had mentioned that you had identified about 10% more patients from the 1200 base.
Kate: That was sort of forecast at the at the launch I was just curious if you had any updated thoughts in terms of that number or are you comfortable with that.
Kate: That statement now thanks.
Kate:
Speaker Change: In terms of comfortably yet we were comfortable wouldn't be reported the number the Trenton to continues to go up.
Speaker Change: If we hit a significant milestone moving forward will report again.
Kate:
Kate: But more and more patients as vice Vivek tends to.
Kate: Be well used and the volume of patients increases the awareness goes up.
Kate: Starting to see.
Kate:
Kate: The market expand beyond the original estimate.
Kate: Thanks.
Speaker Change: Your next question for today is from Ritu <unk> with TD Cowen.
Ritu: Hi, guys. Thanks for taking the question I'm going to focus on Europe with my two questions today.
Ritu: Have you guys received the 180 day questions.
Kate: And if so can you.
Kate: Comment on.
Kate: The the topics and whether you've responded and whether at this point you're expecting oral arguments and then I think it was too much to your point on label expectations, you mentioned that it sounded like you could go down too.
Kate: D E b patients from birth literally.
Speaker Change: But you didn't comment on recessive versus dominant is that a question in Europe and then the follow up question is for Chris on pricing in Europe. What can you say on how we should be thinking about European pricing versus U S pricing and how best to model that.
Speaker Change: Thanks for the question, Yes, we did receive the one anything questions and in fact today, Yeah I'll respond.
Speaker Change: One thing to that <unk> question.
Kate: Yes, I mean, most of the issues all the issues are resolved there doesn't seem to be an overall meeting at the point that the army at the moment, So that's where we stand.
Kate: Regarding to the label the.
Kate: The labor right now as the lead goes based on our 180 days comment on the SBC.
Kate: Going to be from board in the evening basins that includes both dominant amber presentation.
Kate: S M D C.
Kate: On pricing we too.
Kate: What are you going to do our very best.
Kate: To get the maximum price possible we're starting.
Speaker Change: Yes.
Speaker Change:
Speaker Change: Excuse me you can think about pricing.
Speaker Change: In Germany for example, we get to launch with a U S price for the first six months as we start to begin negotiations in Germany. The first country of launch at the end of six months, we'll start accruing.
Speaker Change: <unk>.
Speaker Change: Being a certain price that we land with at the end of 12 months. So the actual pricing in Europe in the first country doesn't really get set.
Kate:
Kate: So once you offsetting 2026 at this moment.
Kate: We will have enough not price.
Kate: Given the NPP, so what will be public as the U S and you have that price.
Kate: But overall expectations for us if you combine all of Europe.
Kate: At the Conservative end about 50% of the U S price and we'll do our very best given all of the product differentiator Somebody's man to make a strong case.
Kate: Ultra rare disease.
Kate: The land somewhere between the 50%.
Kate: In the U S workforce.
Speaker Change: Great. Thanks for the color.
Speaker Change: I just want to add one more thing is we are still on track to get home dosing in young so based on the one that you can do so that's something that is positive for us.
Speaker Change: Your next question is from Sami Corwin with William Blair.
Sami Corwin: Hey, there and thanks for taking my question.
Sami Corwin: How do you expect the declining compliant impact revenue and do you plan on giving any revenue guidance for 2025.
Sami Corwin: And then just as a follow up you've kind of pointed us to reimbursement approvals as a measure of buys at the body wash and the U S.
Sami Corwin: Metrics Army kind of looking for.
Sami Corwin: For the launch as it progresses in Europe in Japan next year.
Speaker Change: Thanks, Tommy I missed the first half of your first question ahead of the guidance, what you're saying.
Speaker Change: How do you expect a decline in compliance to impact revenue.
Tommy: Oh in the U S excuse me yes.
Tommy: Look when we launched at the time of the launch.
Sami Corwin: Our expectation was that patients would be utilizing four vials a month and our expectation was that it would get to about two vials of months 18 months post launch that was the expectations. We had at the time of launch.
Sami Corwin: We seem to be much ahead with respect to compliance because the overwhelming.
Sami Corwin: Portion of patients in the study, but with that said wed pilot potentially more severe disease.
Sami Corwin: Early days of launch.
Kate: So we're talking a little bit higher up that were already had like 15 months and we don't expect to get to 50% over the next three months. So we're ahead.
Kate: As I've mentioned before is primarily because the percentage of <unk> patients is much higher.
Kate: Then the dominant patients in this study.
Kate: With respect to revenue guidance next year.
Kate: We're still thinking it internally talking about it.
Kate: We have put ourselves in a position, where we're actually expecting an EU launch early in <unk>.
Kate: And.
Kate: We have to get closer to figure it out.
Kate: <unk> the German launch progresses.
Kate: And then we're up in France under the <unk> program. So a lot of moving parts next year to be extremely definitive about guidance at this point.
Kate: But hopefully by the time the next scale comes around we'll have more clarity on what we're going to talk about.
Kate: With respect to guidance.
Kate: In 2021.
Kate: Within this might be your last question in the U S. We had reimbursement approvals.
Kate: In the EU everything is a bit different Germany is a bit different in France is a bit different.
Kate: And then Japan.
Kate: So.
Kate: We haven't.
Kate: Made a decision at this point in time and as we get closer to the CST MP opinion.
Kate: One sit down and talk about what makes the best sense in terms of expecting.
Kate: Net revenues for 2025 will end up being.
Speaker Change: Great. Thank you.
Speaker Change: Your next question for today is from Gavin Clark Gardner with Evercore ISI.
Speaker Change: Hey, guys. Thanks for taking the questions.
Speaker Change: Just wanted to focus in on.
Kate: And the data coming later this year a first question here can you just level set on the amount of data that we'll be getting with how many patients per cohort, which patients can be an augmentation therapy and also remind us.
Kate: Which cohorts, the lavage or done and at what time point.
Speaker Change: So right now we are in.
Kate: No.
Speaker Change: Processes are enrolling cohort two we have finished enrolling three basins.
Kate: We are going to enroll additional patients in cohort.
Kate: And based on our animal studies and our HD study do you feel this is a cohort that we really need an athlete molecular correction, but this dose because we did see nice expression this equal indoors and manage the animal model. So we have additional patients.
Kate: They are the basically the patients they can put in relation to that right. Now we are basing that on logon augmentation and augmentation. So he will do a debottleneck them before and after four molecular correction in their lung lavage. So we hope to have a couple of reasons enrolled before end of the year.
Kate: And hope to have data on that cohort by the end of the year with regards to levels of expression multiple biomarkers deep depression, neutrophil elastase binding of neutral impact and some of them understand them.
Kate: Now.
Kate: A complete picture of what our you know our inhaled.
Kate: Well, that's what we're doing.
Speaker Change: That's helpful and do you believe that the.
Speaker Change: Bronchoalveolar lavage is or the bronchoscopy is will be more informative and what's your what's the bar on either of those measures.
Speaker Change: So we are looking at everything I mean, obviously deep basin.
Speaker Change: Addicted to bronchoscopy, so if you have them.
Kate: This line bronchoscopy done b not just be have neglected the lavage, we did biopsies.
Kate: There'll be a boat and brushing of the long so all green.
Kate: Was taken at the baseline and after dosing so people will look at all of that and.
Kate: Incompleteness to understand you know what it looks like.
Kate: As far as levels I mean again, we are hoping I mean again you know we hope.
Kate: Hopefully, we will not have a even E T. So you're going to hope.
Kate: Hope to see a good expression levels of nearly 2018 at least one micro module and the lung lavage.
Kate: Kevin I do want to add one point.
Kate: Our re dosing mechanism right, so and one of our objectives following a good readout.
Kate: He has to go into a <unk> dosing type situation.
Kate: So while one is kind of like a target we've set for ourselves.
Kate: A look at the complete package as we get close enough to it.
Kate: We will look to re dosing to kind of move the program forward, one, but I do want to be clear at this point, we do not have any sense of what the levels are in any of these risks.
Kate: Keep in mind, we are looking at the entirety, you're right you're looking at expenses neutrophil elastase, the binding of <unk> due to another neutrophil elastase and it's not just the expression of anyone who do you want to make sure you're seeing wild hobby with me when ETP and its functional so that's critical so if you're going to you know those are that's the kind of data that's going to be critical.
Kate: And hopefully that's what leads us to see clinical benefit.
Speaker Change: That's really helpful. Thank you.
Speaker Change: Your next question is from Dae Gon ha with Stifel.
Speaker Change: Great. Good morning, Thanks for taking our questions two from us as well going back to the <unk> launch metric you mentioned 460 being reimbursed I was kind of curious if you can maybe give us a little bit more color around how that distribution is between centers of excellence and primary care I guess the community docs.
Kate: I'm just kind of curious what kind of growth, we should be expecting going into Q4 on the future.
Kate: And secondly on the <unk> just to kind of level set and clarify here. So is it the expectation that the year end update as cohort one and two and therefore, you will make a go forward decision as well as a protocol amendment for re dosing after the cohort two or will you still go through cohort three a M <unk>.
Kate: Which I recall was the hyperalimentation or without IV augmentation. Thanks, so much.
Kate: Yes.
Speaker Change: So I don't think your question first and then I think.
Speaker Change: The commercial team will answer your question one.
Speaker Change: Yes, I think for cohort, one and I mean, just thinking, especially we need to.
Speaker Change: Thank God, we will topical had do if not I mean, we have the option to go into going to move to go with them because so far we don't see any dose limiting toxicities and uncle. So we have the option, but I think we are at a pretty good dose level right now who's going to do and if we get to see what we see that I think will.
Speaker Change: Be ready to go into a repeat dosing cohort two or.
Speaker Change: The Austin devoted to go with them.
Speaker Change: Alright, I'm happy to answer question number two our success has been built on the fact that we balanced growth in both the Coes allergenicity studying our Kols continue physician buys you back in a very healthy way, what we see in a sea of lease is either new patients that are coming in and where patients who maybe haven't yet seen it.
Kate: The approval on thinking back in the community setting Azerbaijan, 70% of our prescribers in Q3 were new prescribers and that's because we are successful in identifying where these patients onto our claims alert, but allowing them to find these patients all across the United States, including in the community setting.
Speaker Change: So you.
Speaker Change: You need to do both in order for us to continue to see the grocery I think we'd be denied.
Speaker Change: I guess just to clarify cohort one and two data for the year end update for you today.
Kate: Yeah.
Kate: Sure.
Speaker Change: That's what we're shooting for I mean, we have patients enrolled in the bronchoscopy portion.
Speaker Change: Hopefully, we'll keep adding more pieces to that.
Speaker Change: Okay, that's great thanks very much.
Speaker Change: Once again, if you would like to ask a question. Please press star one.
Speaker Change: Your next question is from Doug Chatto, Patti <unk> with Guggenheim Securities.
Doug Chatto: Hey, good morning, and thanks for taking my questions.
Speaker Change: Occupations approach their reimbursement gaps coupled with the holiday season.
How should we think about <unk> do you expect.
Speaker Change: Significant growth here or this is gonna be a sequentially flat quarter.
Speaker Change: And then on the 2025 guidance I understand lots of moving parts.
Speaker Change: Far as Europe is concerned, but why not guide to the U S market, especially now that you have trends both from the summer and the holiday season under your belt. Thanks, So much.
Speaker Change: Yeah.
Speaker Change: Look on the first question. The only reason I made that comment I remember some confusion last year. After we came through Q4.
Speaker Change: And the only point I'm trying to make is Thanksgiving and Christmas.
Speaker Change: Those are.
Speaker Change: At least two weeks wed.
Speaker Change: Patients try to.
Speaker Change: Not have a dose or <unk>.
Speaker Change: Life of family vacations, or whatever and also the nurses at their own schedules. So the only reason if I'm, making that comment was not to do necessarily point to some weakening a flattening we're still on track for the 720 reimbursement approvals as we said at the time of the launch.
Speaker Change: I just wanted to alleviate concerns.
Speaker Change: Concerns post Q4.
Speaker Change: Right now by saying, please think about the holidays life gets in the way.
Speaker Change: With respect to guidance for 2025, you are right, we will have a much better handle of the U S.
Speaker Change: We will not have a handle on Germany or France. So some of the other ex U S countries.
Speaker Change: So at the end of the year, we'll sit down and think about.
Speaker Change: Going into the Q4.
Speaker Change: That something that would be useful to shareholders as a way to model.
Speaker Change:
Speaker Change: Fully realizing that it will be supplemented by revenues potentially in Germany, and France and.
Speaker Change: Hopefully even Japan.
Speaker Change: Your next question is from Andrea Newkirk with Goldman Sachs.
Andrea Newkirk: Good morning, Thanks for taking our question maybe one here on the European launch just curious if you could share what activities are currently underway as you prepare for this potential launch starting in Germany, and then as you look to next year, what type of step up in infrastructure do you believe is required to support the launch thanks so much.
Speaker Change: Yes, thanks, Andrea with respect to activities.
Speaker Change: We're starting to work on the dossier is ahead of the pricing negotiations in several countries.
Speaker Change: The commercial team in Germany is in place and would probably in our commercial team in France.
Speaker Change: What was expected to be in place by the end of the year. The first two countries, we're going to be launching in.
Speaker Change: In terms of infrastructure.
Speaker Change:
Speaker Change: We're not we're expecting somewhere about 10 employees per country at a high level and that usually includes pretty much all aspects of commercial medical affairs reps may.
Speaker Change: Maybe somebody fund axis.
Speaker Change: Et cetera, so a rough estimate would be less than 10 employees per country put each of the European countries.
Speaker Change: Got it and should we expect those to be onboard it I guess, maybe closer to that to the potential launch in each of those.
Speaker Change: Each of those as those countries come on line.
Speaker Change: I think in Germany, most of them will be on boarded before the end of the year in France may be.
Speaker Change: By the end of the year and some early next year.
Speaker Change: So and we're also we also have a team out in Japan, we have like six to eight employees in Japan today, and notably on voted in the first half in anticipation of the <unk> launch in Japan.
Speaker Change: There are no further questions in queue.
Speaker Change: Right.
Speaker Change: The U S.
Speaker Change: So thank you all for joining the call we look forward to answering any follow on questions in the upcoming days. Thank you.
Speaker Change: Thank you for joining the Crystal Biotechs third quarter earnings Conference call. This concludes today's event you may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.