Q3 2024 Vanda Pharmaceuticals Inc Earnings Call
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Speaker Change: Hello and thank you for standing by. At this time, I would like to welcome you to the Q3 2024 Vanda Pharmaceuticals, Inc. Earnings Conference Call. All answers have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.
If you would like to withdraw your question, press star 1 again. I would now like to turn the conference over to Kevin Moran, FANDA's Chief Financial Officer. Please go ahead, sir.
Kevin Moran: Thank you, Jericho.
Kevin Moran: In addition, we are providing live and archived versions of this conference call on our website.
Kevin Moran: Joining me on today's call is Dr. Mihael Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board, and Tim Williams, our General Counsel.
Kevin Moran: Following my introductory remarks, Mihael will update you on our ongoing activities. I will then comment on our financial results before we open the lines for your questions.
Kevin Moran: Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances, and uncertainties.
Kevin Moran: These risks are described in the Cautionary Note regarding forward-looking statements.
Kevin Moran: risk factors
Kevin Moran: and management's discussion and analysis of financial condition and results of operations sections of our most recent annual report on Form 10-K, as updated by our subsequent quarterly reports on Form 10-Q.
Kevin Moran: current reports on Form 8K and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings.
Kevin Moran: The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.
Speaker Change: Thank you very much, Kevin, and good afternoon, everyone. Thank you for joining us to discuss VANDIS third quarter 2024 results.
Kevin Moran: During the last quarter, we have been focused on building and strengthening our commercial organization to support the new launches of FANAPT in bipolar 1 disorder and PUNVORI in multiple sclerosis.
Kevin Moran: In Q3, we completed the first phase of our sales force build-out to support the FANAD launch with approximately 150 representatives marketing the product to psychiatry prescribers around the country.
Kevin Moran: This launch has been supported by the Phonapt Speakers Program, creating awareness of the product among prescribers.
Kevin Moran: The early indicators of commercial progress are encouraging and include more than a 90% increase compared to Q3 of 2023 in new patient starts, as captured by the IQVIA NBRX metric.
Kevin Moran: This large increase is followed by observed increases in the
Kevin Moran: NRX and TRX IQVIA metrics of new and total weekly prescriptions.
Kevin Moran: We are observing a steady and continuous growth on adoption of the product with only a few months of operation of our enhanced national sales force.
Kevin Moran: We have now initiated the second phase of Salesforce expansion that will bring the Salesforce to approximately 200 representatives by year end.
Kevin Moran: FANAPT is the flagship product of our psychiatry portfolio, which now also includes milsapiridone, an active metabolite of FANAPT, and FANAPT-LAI, long-acting injectable.
Kevin Moran: A new drug application is planned for early 2025 for the indications of schizophrenia and bipolar I disorder for milciperida.
Kevin Moran: after a successful pre-MDA meeting with the FDA earlier this year.
Kevin Moran: Additionally, we plan to initiate a Phase III program for milteperidine in major depressive disorder this quarter.
Kevin Moran: Success in this program is expected to significantly expand the potential of the franchise with the inclusion of the much more prevalent indication of depression.
Kevin Moran: In addition,
Kevin Moran: The pivotal long-term relapse prevention study with the once-monthly LAI FNAP is planned to start this quarter.
Kevin Moran: We recently met with the FDA to discuss the potential NDA package for FANAPT-LAI, and we're in agreement that a successful completion of this upcoming study may be sufficient to support a new drug application for this product.
Kevin Moran: I will now switch to Ponvori and our commercial efforts in multiple sclerosis, as well as our developing plans for indication expansion.
Kevin Moran: PONVORI, a sphingosine 1-phosphate analogue approved for the treatment of multiple sclerosis was acquired last year from Janssen.
Kevin Moran: In this last quarter, we built and launched our commercial sales team along with a convoy speakers program.
Kevin Moran: Our sales force has received enthusiastic reception by many multiple sclerosis experts, some of whom were already familiar, while others are new to the product.
Kevin Moran: Polvori is one of four products in this class and is differentiated by its receptor specificity and the quick onset and offset of action.
Kevin Moran: In two recent publications, clinician and patient preferences for sphingosine 1-phosphate analogues were examined in a discrete choice experiment design.
Kevin Moran: Porvodi rose to the first-choice position both in the 200 US neurology study and the 400 multiple sclerosis patient study.
Kevin Moran: The prescribers preferred ponesimod over siponimod, fingolimod, and ozanimod, primarily because of the fewer drug-drug interactions, while the multiple sclerosis patients preferred
Kevin Moran: chose ponesimod because of the shorter immune system recovery time, in addition to the fewer drug-drug interactions.
Kevin Moran: We look forward to increasing awareness of PONVORI among prescribers and patients over the coming quarters.
Kevin Moran: Beyond multiple sclerosis, PUNVORI has a potential utility in the treatment of other autoimmune disorders.
Kevin Moran: In plexoriasis, Poonvori has shown significant efficacy in achieving PASI-75.
Kevin Moran: a measurement of improvement of psoriasis score by week 16 in a large 326 patient study that included two doses of Ponvori and placebo.
Kevin Moran: Both doses of Ponvoria achieved the primary endpoint and showed highly significant results of p-value of less than 0.0001 for both doses tested.
Kevin Moran: We expect to file an IND application for psoriasis with the FDA shortly.
Kevin Moran: Successful completion of the program could result in a once-daily oral treatment for patients with psoriasis that may offer a convenient and effective option beyond the available injectable drugs.
Kevin Moran: Separately, we have recently submitted an IND application to initiate a PONVORI program in ulcerative colitis.
Kevin Moran: Again, here we believe that the successful completion of this program may bring a useful and differentiated option to patients with ulcerative colitis.
Kevin Moran: On tridipetan, our neurokinin-1 receptor antagonist, we recently reported that the FDA denied approval for the treatment of symptoms of gastroparesis.
Kevin Moran: The FDA's reasoning was mostly conclusory and not supported by the facts presented.
Kevin Moran: This negative decision is especially disappointing for many patients with gastroparesis and especially for those that experience significant improvements in their condition where other treatments have failed for years.
Kevin Moran: Dozens of patients are currently participating in the expanded access program and many more have either applied or expressed interest to access Tredipnant.
Kevin Moran: We are committed to continue to pursue approval for this condition and support patients requesting expanded access.
Kevin Moran: We believe that the best path forward would be for the FDA to convene the Scientific Advisory Committee to independently evaluate the evidence and offer their advice.
Kevin Moran: In addition, we plan to initiate a clinical trial to study the effect of tradipotent in preventing vomiting in people treated with GLP-1 analogs, like semaglutide.
Kevin Moran: We believe that Rediptent, because of its mechanism of action, has the potential to improve tolerability of these agents and permit more rapid titration, thereby improving the efficacy and safety profile of these useful agents.
Kevin Moran: We have already shown in three adequate and well-controlled studies that rediputant can be used to prevent vomiting induced by motion sickness.
Kevin Moran: Traditionally has been shown to be effective at both doses tested during actual sea travel of the coastal waters of the United States.
Kevin Moran: We plan to submit a new drug application for this indication by end of this year.
Kevin Moran: While we highlight these programs, we continue our work to expand the indications for our approved products. Recently, we met with the FDA and agreed on a clinical program that could support the approval of Hetlios in pediatric insomnia.
Kevin Moran: Pediatric insomnia is a large medical need with very few options and a very large burden.
Kevin Moran: to patients and their families.
Kevin Moran: We believe that hectorius could have a significant public health impact in treating this very common pediatric condition.
Kevin Moran: A clinical study in pediatric insomnia is underway.
Kevin Moran: Thank you.
Kevin Moran: In our press release today, we briefly mentioned two other programs, the first with the CFTR activator VSJ110, which has shown encouraging results in dry eye disorder in an ongoing study.
Kevin Moran: where this custom-developed drug is expected to be evaluated in a patient with this ultra-rare mutation later this year.
Kevin Moran: In summary, we're excited with our FNAP launch and the revenue growth opportunities through all three of our commercial programs and look forward to providing updates on this, as well as our promising pipeline in the future. With that, I'll turn now to Kevin to discuss our financial results. Kevin?
Kevin Moran: Thank you, Myles. I'll begin by summarizing our financial results for the first nine months of 2024 before turning to discuss the third quarter of 2024.
Kevin Moran: Total revenues for the first nine months of 2024 were $145.6 million, a 1% decrease compared to $147.4 million for the same period in 2023.
Kevin Moran: This slight decrease was primarily due to decreased Hetlios revenue due to the launch of generic versions of Hetlios, largely offset by the introduction of Pomvori revenue following our acquisition of the product in December 2023.
Kevin Moran: Let me further break this down by product. FNAP net product sales were $67.6 million for the first nine months of 2024, a 1% decrease compared to $68.3 million within the same period in 2023.
Kevin Moran: The decreased net product sales relative to the first nine months of 2023 was attributable to a decrease in volume partially offset by an increase in price net of deductions.
Kevin Moran: Hetlios net product sales were $56.6 million for the first nine months of 2024, a 28% decrease compared to $79.1 million in the same period in 2023.
Kevin Moran: The decrease to net product sales relative to the first nine months of 2023 was attributable to a decrease in volume, partially offset by an increase in price net of deductions. The decrease relative to the first nine months of 2023 was a result of continued generic competition in the United States.
Kevin Moran: Hetlios Net Product Sales as reported for the first quarter of 2023 reflected higher unit sales as compared to recent prior periods.
Kevin Moran: The higher unit sales during the first quarter of 2023 resulted in a significant increase of inventory stocking at specialty pharmacy customers at March 31st, 2023.
Kevin Moran: during the remainder of 2023, although there was continued destocking at specialty pharmacy customers.
Kevin Moran: Inventory levels at December 31st, 2023 remained elevated relative to inventory levels prior to the entrance of generic competition and continue to remain elevated at March 31st, 2024, June 30th, 2024, and September 30th, 2024.
Kevin Moran: Going forward, Hetlios Net Product sales may reflect lower unit sales as a result of reduction of the elevated inventory levels at specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again.
Kevin Moran: Further, Hetlio's net product sales will likely decline in future periods, potentially significantly related to generic competition in the United States.
Kevin Moran: Additionally, the company constrained Hetlios Net Product sales for the year ended December 31st, 2023 and the first nine months of 2024 to an amount not probable of significant revenue reversal.
Kevin Moran: As a result, Hetlio's net product sales could experience variability in future periods as the remaining uncertainties associated with variable consideration are resolved.
Kevin Moran: Ponvori Net Product Sales were $21.3 million for the first nine months of 2024.
Kevin Moran: As a reminder, we completed the acquisition of the U.S. and Canadian rights to Ponvory in December of 2023. As such, this represents the third full quarter of Ponvory revenue recognition at Vanda and a positive step in diversifying our product mix with innovative and value-generating products.
Kevin Moran: One additional item to note, as we head into the fourth quarter of 2024 and soon thereafter 2025, the Medicare Benefit Redesign portion of the Inflation Reduction Act goes into effect as of January 1st, 2025.
Kevin Moran: The implementation of the benefit redesign is expected to negatively impact gross-to-net for the Medicare payer segment of our products. This change is not specific to Vanda, but is an industry-wide change which will have varying impacts on pharmaceutical manufacturers.
Kevin Moran: For the first nine months of 2024, VANDR reported a net loss of $14 million compared to net income of $4.9 million for the same period in 2023. The net loss for the first nine months of 2024 included an income tax benefit of $2.4 million as compared to an income tax provision of $3.1 million for the same period in 2023.
Kevin Moran: Operating expenses for the first nine months of 2024 were $176 million, compared to $154.2 million for the same period in 2023.
Kevin Moran: The $21.7 million increase was primarily driven by higher SG&A expenses related to spending on famous commercial products as a result of the commercial launches of Phenaptin Bipolar 1 Disorder and Ponvori and Multiple Sclerosis.
Kevin Moran: and legal and other corporate activities, as well as higher intangible asset amortization expense due to the amortization recorded on the Ponvori intangible asset.
Kevin Moran: During the first nine months of 2024, we commenced a host of activities as part of our commercial launches of Phenaptin Bipolar I Disorder and Ponvoria Multiple Sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.
Kevin Moran: SG&A expenses may increase in future periods as a result of the ongoing commercial launches of Phenaptin Bipolar I Disorder and Ponvori and Multiple Sclerosis, which were initiated in the third quarter of 2024.
Kevin Moran: Vanda's cash, cash equivalents and marketable securities, referred to as cash, as of September 30, 2024, was $376.3 million, representing a decrease of $12 million compared to December 31, 2023, and a decrease of $11.4 million compared to June 30, 2024.
Kevin Moran: The cash balance of $376.3 million as of September 30, 2024, does not include a payment from Janssen for $8.1 million primarily related to second quarter 2024 Ponvori revenue receivables, which was received in the fourth quarter of 2024.
Kevin Moran: If this payment had been received prior to September 30, 2024, the cash balance would have been $384.4 million, and the decrease to cash since December 31, 2023 would have been $3.9 million, and the decrease to cash since June 30, 2024 would have been $3.3 million.
Kevin Moran: Turning now to our quarterly results.
Kevin Moran: Total revenues for the third quarter of 2024 were $47.7 million, a 23% increase compared to $38.8 million for the third quarter of 2023, and a 6% decrease compared to $50.5 million in the second quarter of 2024.
Kevin Moran: The increase as compared to the third quarter of 2023 was primarily due to the introduction of Ponvori revenue following our acquisition of the product in December 2023 and an increase in FNAP revenue.
Kevin Moran: FNAP Net Product Sales were $23.9 million for the 3rd quarter of 2024, a 12% increase compared to $21.3 million in the 3rd quarter of 2023. FNAP Net Product Sales in the 3rd quarter of 2024 increased by 3% as compared to $23.2 million in the 2nd quarter of 2024.
Kevin Moran: FNAT prescriptions in the third quarter of 2024, as reported by Equibia Exponent, increased by approximately 1% compared to the second quarter of 2024.
Kevin Moran: Turning now to HETLIAS.
Kevin Moran: Hetlio's net product sales were $17.9 million for the third quarter of 2024, a 2% increase compared to $17.5 million in the third quarter of 2023.
Kevin Moran: Hetlio's net product sales in the third quarter decreased by 4% as compared to $18.7 million in the second quarter of 2024. The decrease in net product sales relative to the second quarter of 2024 was attributable to a decrease in volume partially offset by an increase in price net of deductions.
Kevin Moran: and finally turning the pawn board.
Kevin Moran: Pombori Net Product Sales were $5.9 million for the third quarter of 2024, a decrease of 32% compared to $8.6 million in the second quarter of 2024.
Kevin Moran: The decrease in net product sales was attributable to a decrease in volume of units sold and a decrease in price net of deductions.
Kevin Moran: The decrease in price net of deductions in the third quarter of 2024 was partially attributable to a true-up of prior period gross-to-net estimates.
Kevin Moran: As a reminder, we completed the acquisition of the U.S. and Canadian rights to Ponvoree in December of 2023.
Kevin Moran: Operating expenses in the third quarter of 2024 were $58.7 million compared to $44.8 million in the third quarter of 2023.
Kevin Moran: The $13.8 million increase is primarily driven by higher SG&A expenses related to spending on Vena's commercial products as a result of the commercial launches of Phenaptin Bipolar One Disorder and Pomborea Multiple Sclerosis, and legal and other corporate activities.
Kevin Moran: Operating expenses in the third quarter of 2024 decreased by $2 million as compared to $60.6 million in the second quarter of 2024.
Kevin Moran: This decrease is primarily driven by lower SG&A expenses related to legal and other corporate activities partially offset by increased spending on Vanda's commercial products as a result of the commercial launches of Fanaptin Bipolar I Disorder and Fonvorium Multiple Sclerosis.
Kevin Moran: During the first nine months of 2024, we commenced a host of activities as a result of the commercial launches of Fanaptin Bipolar I Disorder and Pomborea Multiple Sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.
Kevin Moran: SG&A expenses may increase in future periods as a result of the ongoing commercial launches of Fanaptin Bipolar 1 Disorder and Ponvori and Multiple Sclerosis, which were initiated in the third quarter of 2024.
Kevin Moran: With regards to the launches of Phenaptin Bipolar I Disorder and Pomphorium Multiple Sclerosis, as I mentioned, those launches were initiated this quarter, the third quarter of 2024, and we expect our full commercial infrastructure to be in place by the end of this year, with the impact of these commercial efforts expected to begin to grow revenue later this year.
Kevin Moran: We have already seen significant progress in our commercial activities.
Kevin Moran: Several lead indicators suggest a strong initial market response, including new patient starts as reflected by New-to-Frand Prescriptions, or NBRX, as reported by Equibia, increased by over 90% in the third quarter of 2024 as compared to the third quarter of 2023.
Kevin Moran: Our FNAP sales force continues to expand. As of the end of the first quarter of 2024, our sales force numbered approximately 50 representatives.
Kevin Moran: Currently our sales force has grown to over 150 representatives and we have now initiated a second phase of expansion which will increase our sales force to approximately 200 representatives by the end of this year.
Kevin Moran: In addition to our FNAP Salesforce, we've established a specialty Salesforce to market Pomvori to neurology prescribers around the country.
Kevin Moran: The expansion has allowed us to significantly increase our reach and frequency with FNAP prescribers.
Kevin Moran: The number of FNAP prescriber awareness programs completed in the third quarter of 2024 was nearly three times larger than the number of programs completed in the second quarter of 2024.
Kevin Moran: Turning now to our financial guidance.
Kevin Moran: Vanda is providing an update to its prior 2024 financial guidance. Vanda expects to achieve the following financial objectives in 2024. Total net product sales from FNAP, Tetleos, and Pombori of between $190 million and $210 million. This compares to prior guidance of between $180 million and $210 million.
Kevin Moran: Year-end 2024 cash of between $370 million and $390 million. This compares to prior guidance of between $360 million and $390 million.
Kevin Moran: The revision upwards in our revenue guidance reflects the momentum we are seeing across our product portfolio, including the lead indicators referenced on our FNAP Bipolar 1 launch, progress on the Pomvori launch, which was initiated in the third quarter, and the continued durability of our Hetlios business.
Kevin Moran: With that, I'll now turn the call back to Mahalos.
Mahalos: Thank you very much, Kevin. At this point, we will be happy to answer your questions.
Speaker Change: Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: We're going to pause for just a moment to compile the questions.
Speaker Change: Our first question comes from Charles Duncan from Canberra. Your line is now open.
Charles Duncan: Hey, good afternoon, Mihael and Kevin.
Charles Duncan: Congrats on a nice quarter, neat to see the new patient start increase for FNAP and also bumping up the low end of revenue guidance.
Charles Duncan: I wanted to ask you for a little bit more color on what your sales reps are seeing or hearing from these early days on the FNAP relaunch, if you will, with the bipolar indication. I'm wondering...
Charles Duncan: If you feel like your 150 reps are optimized and the 50 or so more are going to be necessary to drive, and if you are, you know, seeing a bump in TRX as well as NRX.
Kevin Moran: Thanks.
Speaker Change: Yeah, maybe I'll take the first part of the answer for this question. Thank you for joining us and thank you for the question.
Speaker Change: Uzbek that we mentioned.
Speaker Change: on NBRexus.
Speaker Change: which is a very lead indicator, these are people that have not been on FNAP for at least on a look back of two years. And there we see this 90% increase. But we also see, following that, the increase on NRXs.
Speaker Change: which is both New Starts and Refills and TRXs with the total number of prescriptions.
Speaker Change: The way it works is that the NBRX is the first indicator to see
Speaker Change: followed by the NRX and followed by the TRX. And when we look at them at a four week or a three month rolling average, we see very substantial growth and that is continuing.
Speaker Change: So, to answer the question about whether we're optimized in size with the Salesforce, the answer is no, because the more reps we're putting in, the more growth we see.
Speaker Change: So we feel very good about that. We think that is a...
Speaker Change: but also we're excited with the potentially very positive ROI.
Speaker Change: and investments we can continue to make in this category.
Speaker Change: Now, this will not come as a surprise because other projects before us and currently are experiencing the same promotional sensitivity of antipsychotics in this space.
Speaker Change: So, we feel very good that ours...
Speaker Change: is responding, but we believe that continuous growth is to be had, not only with the current sales force that is just in place, but with further expansion as well. I don't know, Kevin, if you want to add.
Kevin Moran: The only other thing I would add to what Mihael has said there, Charles, is just in terms of what we're seeing from the sales force in terms of, you know, their interactions, is that we've seen a three to four-fold increase.
Kevin Moran: in the number of interactions that our sales force has been able to have with potential FNAP prescribers between the third quarter of this year and the first quarter of this year. So we've seen a fairly significant dramatic increase in the number of interactions that we're having with prescribers which obviously we believe is leading to the very significant growth that we're seeing in new patient starts.
Kevin Moran: and hopefully we'll continue to transition or translate to growth in the NRX and TRX metrics and ultimately revenue.
Speaker Change: Okay, if I can sneak in another question on FNAP, then I had a quick question on the pipeline. On FNAP, do you anticipate any impact of Bristol's launch of Cobenfi in terms of the broadening interest in prescribing FNAP?
Speaker Change: Yeah.
Speaker Change: We are excited to see new programs and new mechanisms of action introduced for treatment of mental disorders.
Kevin Moran: specifically about Bristol's Cunbethi product, the M4 viscogenic agonist. They are approved for schizophrenia only.
Kevin Moran: and our focus now is Chimalian Bipolar I Disorder.
Kevin Moran: and therefore we do not expect a direct negative effect, but rather we believe investments that will be made in this space will renew the interest for many of the projects in the class.
Speaker Change: If considering the LAI for FNAP versus MILSA, what do you see as being most important in terms of being able to grow the franchise over time?
Speaker Change: And then, given the pre-NDA meeting for Milsa Peridone earlier this year,
Speaker Change: Is there any data that you're expecting to enable the filing of that NDA in the first part of next year, or what is really the rate-limiting step on that Mills-Superidon NDA filing?
Speaker Change: Thanks. Yeah, and I will start from that.
Speaker Change: V&A filing.
Kevin Moran: In fact, it is primarily guarded by the availability of the stability data, which will occur sometime in the future.
Kevin Moran: And based on this data, we have sufficient information for filing.
Kevin Moran: In terms of clinical, we are conducting a pharmacokinetic study examining a high dose of alloperidone versus a high dose of milciperidone, and this study will be concluded shortly, and we don't expect it to impact the timing of the NDA filing.
Speaker Change: You asked a question about the relationship, I think, about
Speaker Change: the opportunity with the LAI and milsapiridone. I think the always the most exciting thing with these drugs is the expansion of an indication.
Speaker Change: and certainly going from the smaller schizophrenia opportunity to larger bipolar 1 disorder to massive market for major depression, certainly that is a very significant opportunity expansion.
Speaker Change: of the very robust relapse prevention data that we have even with the oral FNAP, and that is already on the U.S. label.
Speaker Change: Excellent. Thanks for taking my questions. Congrats on a good call.
Speaker Change: Thank you, Charles.
Speaker Change: Our next question comes from Ram Selvanajit from EG Waywide. Your line is now open.
Ram Selvanajit: Thanks so much for taking my questions. Can you hear me?
Speaker Change: Yes, Ram.
Ram Selvanajit: So firstly I was wondering, maybe this is a question for Kevin, can you provide us with a breakdown of the percentage of overall prescriptions for your three marketed products that is
Speaker Change: constituted by Medicare so that we can get a sense of what the differential impact across these three products of the Medicare benefit redesign might be.
Speaker Change: Yep.
Speaker Change: Thanks for the question, Ram.
Speaker Change: Across the three products, maybe I'll just start with Ponvori, which is the one that we most recently acquired. What you tend to see across the class is that most of the payer mix there tends to lean towards the commercial side, with a much smaller portion being governmental. So we haven't kind of disclosed specifics in terms of actual percentages, but it's safe to assume that for Ponvori and for the rest of the class, that the majority of those prescriptions are going to be commercial, with a smaller portion being Medicare and Medicaid.
Ram Selvanajit: on the FNAP side, again, what you see in the class.
Ram Selvanajit: is that there's a...
Ram Selvanajit: and they're all talking about the importance of having a strong relationship with your employer. So I think there's a stronger tilt towards the governmental payers there than there is in a product like Pomvori. And in the products that have a label beyond schizophrenia, you tend to see that to a little bit of a lesser extent. So for products that might have bipolar or depression, those have a stronger commercial element to them than products that have a premium portion of essentially beyond half.
Ram Selvanajit: are going to be coming from Medicare and Medicaid. And then finally on Hetlios, it's a kind of a similar pattern on that side to what you would see in the FNAF atypical class where, you know, a good portion, more than half, is also coming from your governmental payers.
Ram Selvanajit: So, smaller portion on the Ponbori side, larger portion on the Hetlios and FNAP side.
Speaker Change: Okay, and then with respect to your planned timeline for the FNAP LAI Phase 3 program, can you just remind me when you expect that to start, what are the remaining gated items to initiation of enrollment in that program, and when you anticipate we might see top-line data?
Speaker Change: Yeah, so I can tell you that we've recently met with the FTA and agreed on the design of the pivotal study and the fact that it's successful, it can satisfy, it can be adequate for the efficacy portion of the FTA.
Speaker Change: This study is expected to be initiated shortly in the fourth quarter of 2024.
Speaker Change: It's a bit hard to anticipate the length of the study.
Speaker Change: Okay, can you also comment on the future potential applications of milsapiridone outside of the schizophrenia and bipolar disorder context? In particular, I was curious to know whether you think there might be applicability of milsapiridone in the mixed population of patients who exhibit symptoms of both depression and schizophrenia, much as has already been seen with lumatepirone.
Speaker Change: Yeah, so two things there. First of all, I'll take the part of the mixed.
Speaker Change: We know very well that this is a classification within the group of bipolar I disorders that can be manic only, can have mixed features, or can have predominantly depressed features.
Speaker Change: Now
Speaker Change: for both.
Speaker Change: manic and mixed features of Bipolar 1 disorder.
Speaker Change: So this part of mixed, which means that the presence of manic and depressed symptoms being present, is already on the U.S. label for the indication.
Speaker Change: and what we have seen from the history of application of atypical antipsychotics in the market is it is that portion of patients that constitutes usually the largest portion of the commercial opportunity.
Speaker Change: And again, this pivotal study will be starting this quarter.
Speaker Change: And then, just very quickly, with respect to the future potential indications and applications
Speaker Change: for PONVORI. Can you give us some granularity regarding when you might look to initiate an investigative clinical development program in ulcerative colitis or for that matter any other indication that you think is particularly of interest?
Speaker Change: Yes, so you're correct in suspecting that there is a very large opportunity to use asphyxiant 1-phosphate as an autoimmune regulator for a number of disorders.
Speaker Change: For ulcerative colitis, we have just recently submitted an IND application and a protocol to the USFDA, and we expect to get their feedback and potentially initiate work there next year.
Speaker Change: for psoriasis.
Speaker Change: we are actually about to submit an IND and certainly as I mentioned in our script
Speaker Change: We have a lot of excitement on the probability of technical success because a large 326-patient study has already been conducted with very persuasive results.
Speaker Change: efficacy on the primary endpoints of Pfizer 75 at week 16.
Speaker Change: So, there we think we're in good shape, potentially with just one additional study.
Speaker Change: to confirm the efficacy and safety of the product.
Speaker Change: and developed them, Punvori, as a very attractive once-a-day oral medication for psoriasis. I remind you in our audience that there are drugs in psoriasis. Many of them are antibodies.
Speaker Change: against certain cytokines being TNF-alpha, IL-17, etc., and therefore there is a need and an appetite for treating especially psoriasis flares with a convenient once-a-day oral medication that Punvori can be.
Speaker Change: Thank you very much and congrats again on the quarter.
Speaker Change: Thank you very much for joining.
Speaker Change: Our next question comes from Andrew Tsai.
Speaker Change: from Jefferies. Their line is now open.
Speaker Change: Hey, good afternoon. This is Matthew Barkas. I'm for Andrew Tsai. I just had a couple of questions. First off, congrats on the Nudibrand scripts for FNAP inflecting.
Speaker Change: Like, how large of a sales force, in comparison, is your Pongori sales force compared to FNAP? And then, when should we start to expect to see your marketing efforts there paying off?
Speaker Change: I will let Kevin take on the more specific parts of the questions, but I will answer the balancing part between the FNAF and Poonavodi sales force. These are separate sales forces.
Speaker Change: The FNAP sales force is targeting specifically psychiatry prescribers, and they're focused on the bipolar indication of FNAP.
Speaker Change: are experts.
Speaker Change: and centers around the country. But, Kevin? Yep. So, a couple different pieces there, Matthew, that I'll hit. So, first, the question around the inventory de-stocking. So, what we saw there was that we completed the transition of the distribution responsibilities from Janssen to us in the middle of September, so fairly late in the quarter. And as part of that, we saw a bit of inventory de-stocking at the specialty distributors and pharmacies, you know, below levels that they've historically carried. And we've already seen that resolved in October. So, that's not something that persisted beyond kind of the initial transition period where we were cutting over from one distributor to the other.
Speaker Change: The second question I think you asked there was how large of a sales force are we seeing on the Ponvori side? And what we see there is that we've got a sales force in the neighborhood of about 30, which is in line with what we had as a specialty sales force previously on Hetlios when we had a dedicated specialty sales force on the Hetlios side. And then on the timing of the impact of these efforts, obviously we commenced the launch in the third quarter. As I mentioned in my portion of the script, we expect the infrastructure to be fully stood up this year, and we're hopeful to begin to see the impact of all those efforts on revenue later this year and as we head into next year.
Speaker Change: Great, thanks. And then also, you have quite a few early stage programs in development, can you speak to your general strategy here? Like where does partnering or licensing out some of these programs make the most sense at all?
Speaker Change: Yeah, certainly. So the way we view our strategy is to have a balanced risk development program with programs at different states of development, and that means risk, focus, and investment.
Speaker Change: and we believe we have a very good mix of early programs.
Speaker Change: late programs, and then life cycle management of commercial products.
Speaker Change: Now, some of them, as they develop along, will remain to be seen whether they're a better opportunity to be fully developed and commercialized internally or with a partner or outlicensed.
Speaker Change: but at this time we're happy where things are.
Speaker Change: and we had focused our business development activities
Speaker Change: Great, yeah, thank you so much and congrats again on the quarter.