Q3 2024 Avadel Pharmaceuticals PLC Earnings Call

November 12, 2024

And only mode.

Later, you will have the opportunity to ask questions. During the question and answer session you.

You May register to ask a question at any time by pressing the star and one on your telephone keypad you may withdraw yourself from the queue by pressing star. Two. Please note. This call is being recorded and I will be standing by if you should need any assistance.

Speaker Change: It is now my pleasure to turn the conference over to Austin Murtaugh would precision Ecu.

Austin Murtaugh: Good morning, and thank you for joining us on our conference call to discuss <unk> third quarter 2024 results as a reminder, before we begin the following presentation includes several several matters that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 90 to 95.

Austin Murtaugh: Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. These risks and uncertainties are described in <unk> public filings under the Exchange Act included in the Form 10-K for the year ended December 31, 2023, which was.

Good day, everyone and welcome to today's Avondale Pharmaceuticals, three Q24 earnings call. At this time, all participants are in a listen only mode.

Later, you'll have the opportunity to ask questions. During the question and answer session you.

Austin Murtaugh: Filed on February 29, 2024, and subsequent SEC filings, except as required by law <unk> undertakes no obligation to update or revise any forward looking statements contained in this presentation to reflect new information future events or otherwise on the call today are Greg Davis, Chief Executive Officer.

Austin Murtaugh: Richard Kim Chief Commercial Officer, and Tom Mchugh, Chief Financial Officer, Dr. Jennifer Goodman, Senior Vice President of medical and clinical Affairs will Additionally, join us for the Q&A portion of the call at this time I'll turn the call over to Greg.

Speaker Change: It is now my pleasure to turn the conference over to Austin Murtaugh with precision Ecu.

Speaker Change: Good morning, and thank you for joining us on our conference call to discuss <unk> third quarter 2024 results as a reminder, before we begin the following presentation includes several several matters that constitute forward looking statements within the meaning of the private Securities litigation reform of 995.

Greg Davis: Thank you Austin and good morning, everyone and thank you for joining us.

Greg Davis: Following my opening remarks, Richard will provide an update on our commercial progress and Tom will then review our third quarter financial results.

Speaker Change: Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. These risks and uncertainties are described in <unk> public filings under the Exchange Act included in the Form 10-K for the year ended December 31, 2023, which was.

Greg Davis: We will then conclude with a question and answer session.

Greg Davis: As we begin today's call let me start by summarizing our Q3 results another quarter, where once again, we delivered consistent patient growth in our <unk> launch, while making progress across a number of additional important fronts.

Greg Davis: As we detailed our loss results today, including our key metrics and how our source of new revised patients continued to advance.

Speaker Change: Filed on February 29, 2024, and subsequent SEC filings, except as required by law Abbott undertakes no obligation to update or revise any forward looking statements contained in this presentation to reflect new information future events or otherwise on the call today are Greg Davis, Chief Executive Officer.

Greg Davis: It is clear that we have begun to make a real impact on the patients. We are serving with the full recognition that we are moving to the next phase of our launch and as such there remains much work to be executed to deliver on the full promise and potential of Bloom rights for all stakeholders.

Greg Davis: Richard Kim Chief Commercial Officer, and Tom Mchugh, Chief Financial Officer, Dr. Jennifer Goodman, Senior Vice President of medical and clinical Affairs will Additionally, join us for the Q&A portion of the call at this time I'll turn the call over to Greg.

Greg Davis: Turning to the launch metrics that Richard will cover in more detail shortly.

Greg Davis: We reported there were 2300 active patients on therapy as of September 30.

Greg Davis: 700 patients who initiated moonrise therapy in Q3, resulting in $50 million in net revenue during the third quarter.

Greg Davis: Thank you Austin and good morning, everyone and thank you for joining us.

Greg Davis: More specifically during Q3, we saw the following trends first we see continued strong representation from all three patient segments switch due to oxalate and previously treated and discontinued patients.

Greg Davis: Following my opening remarks, Richard will provide an update on our commercial progress and Tom will then review our third quarter financial results.

Greg Davis: We will then conclude with a question and answer session.

Greg Davis: <unk> patients continue to make up the largest portion of new patient starts in Q3.

Greg Davis: With most switches coming from the mixed salt Octavate product.

Greg Davis: A trend that has continued since the beginning of launch.

Greg Davis: Second patients who are new to oxidative represent the fastest growing segment of <unk> patient starts.

Greg Davis: As we detailed our loss results today, including our key metrics and how our source of new <unk> patients continue to advance. It is clear that we have begun to make a real impact on the patients. We are serving with the full recognition that we are moving to the next phase of our launch and as such there remains much work to be executed to deliver on.

Greg Davis: It is coming from both existing Akshay prescribers as well as prescribers, who have never written in <unk> prior to <unk> availability.

Greg Davis: And lastly, we believe these data points are important leading indicators of the potential emerging signs of expansion in the overall market.

Greg Davis: The full promise and potential of Bloom rice for all stakeholders.

Which despite not being a core focus of our initial launch is happening even earlier than we had previously anticipated.

Greg Davis: Turning to the launch metrics that Richard will cover in more detail shortly.

Greg Davis: We reported there were 2300 active patients on therapy as of September 30.

Greg Davis: With this emerging expansion of new to oscillate patient demand. It is important to note that based on historical twice nightly octavate trends and our early <unk> launch data, we can expect to see lower persistency rates and this new <unk> patient population.

Greg Davis: And 700 patients who initiated therapy in Q3, resulting in $50 million in net revenue during the third quarter.

Greg Davis: More specifically during Q3, we saw the following trends first we see continued strong representation from all three patient segments switch due to oxalate.

Greg Davis: Richard will provide more detail on this and the actions we are taking in this regard as we are making additional investments to support all patients transitioning onto lumens.

Greg Davis: And previously treated and discontinued patients.

Greg Davis: Switch patients continued to make up the largest portion of new patient starts in Q3.

Greg Davis: Furthermore, in October we were pleased to announce receipt of FDA approval and orphan drug exclusivity for <unk> in treating cataplexy or excessive daytime sleepiness in pediatric patients seven years and older with narcolepsy.

Greg Davis: With most switches coming from the mixed salt Oxidate product.

Greg Davis: A trend that has continued since the beginning of launch.

Greg Davis: Second patients who are new to OXXO Bates represent the fastest growing segment of <unk> patient starts.

Greg Davis: As with adult patients Lumens is determined to be clinically superior to the twice nightly product in the pediatric patient population based on its major contribution to patient care.

Which is coming from both existing Akshay prescribers as well as prescribers, who have never written on oxalate prior to loom rises availability.

Greg Davis: Specifically FDA stated <unk> dosing provides an opportunity to minimize sleep fragmentation and disruption of sleep architecture in a way that is not possible for a patient on a twice daily dosing regimen of an Austin.

Greg Davis: And lastly, we believe these data points are important leading indicators of the potential emerging signs of expansion in the overall market.

Greg Davis: Which despite not being a core focus of our initial launch is happening even earlier than we had previously anticipated.

Speaker Change: FTE went on to say this is medically relevant because the goal for treating patients with sleep disorders is to restore our normal pattern and a healthier sleep physiology.

Greg Davis: With this emerging expansion of new to oscillate patient demand. It's important to note that based on historical twice nightly oxidate trends and our early <unk> launch data, we can expect to see lower persistency rates and this new <unk> patient population.

Speaker Change: We've always recognized based on direct feedback from providers patients and their families. The burden and limitations that first generation Akshay tab on children with narcolepsy and their caregivers.

Greg Davis: Richard will provide more detail on this and the actions we are taking in this regard as we are making additional investments to support all patients transitioning onto lumens.

Speaker Change: We're proud to be able to offer <unk> to all eligible people with narcolepsy and in this regard <unk> is commercially available and is currently being prescribed to and used by children with narcolepsy.

Speaker Change: Yeah.

Speaker Change: Lastly, turning to our indication and portfolio expansion efforts enrollment is ongoing in our phase III <unk> study, where we are evaluating <unk> potential clinical benefit.

Greg Davis: As with adult patients Lula is determined to be clinically superior to the twice nightly product in the pediatric patient population based on its major contribution to patient care.

Speaker Change: Adults with idiopathic hypersomnia or IH.

Speaker Change: We also hear from clinicians and IH patients have difficulty physically waking up for their second dose given the deep sleep inertia associated with IH, so potentially having new lines available for IH patients is not only important but also very much needed.

Speaker Change: In addition to our IH phase III study, we continue the preclinical development of our no or low sodium once at bedtime octavate formulations seeking a target product profile that is bio equivalent to learn and meets all SBA required standards.

Speaker Change: FTE went on to say this is medically relevant because the goal for treating patients with sleep disorders is to restore a normal sleep pattern and a healthier sleep physiology.

Speaker Change: We've always recognized based on direct feedback from providers patients and their families. The burden and limitations that first generation oxalate tab on children with narcolepsy and their caregivers.

Speaker Change: This program remains in early preclinical formulation development stages, we will plan to provide future updates as and when these programs advanced.

Speaker Change: We're proud to be able to offer offer Lou <unk> to all eligible people with narcolepsy and in this regard <unk> is commercially available and is currently being prescribed to and used by children with narcolepsy.

Speaker Change: Beyond our commercial and clinical progress, we recently announced the district of Columbia courts favorable ruling affirming the fda's approval in clinical superiority of decision for <unk> based on its unique once nightly dosing profile.

Speaker Change: Lastly, turning to our indication and portfolio expansion efforts enrollment is ongoing in our phase III <unk> study, where we are evaluating <unk> potential clinical benefit.

Speaker Change: We're pleased with this ruling for a number of reasons as we continue executing our launch while mitigating an important legal and business risks for the company.

Speaker Change: In summary, the third quarter represented another consistent quarter of numerous launch execution bolstered by additional key developments the pediatric approval along with the second orphan drug exclusivity award granted by FDA for Luna Brian.

Speaker Change: Adult with idiopathic hypersomnia or IH.

Speaker Change: We also hear from clinicians that IH patients had difficulties physically waking up for their second dose given the deep sleep inertia associated with IH, so potentially having <unk> available for IH patients is not only important but also very much needed.

Speaker Change: The initiation of our IH phase III trial, and the affirmative court decision and the district of Columbia HCA litigation.

Speaker Change: As we look towards 2025 with a clear vision for growth.

In addition to our IH phase III study, we continue the preclinical development of our no or low sodium once at bedtime auction bait formulations seeking a target product profile that is bio equivalent to revise and meets all SBA required standards.

Speaker Change: We remain focused on executing the near term value drivers, including the continued launch of <unk> and our lifecycle management efforts.

Speaker Change: All in our pursuit of realizing the full potential of <unk> for all stakeholders.

Speaker Change: This program remains in early preclinical formulation development stages, we will plan to provide future updates as and when these programs advanced.

Speaker Change: Now I'll turn the call over to Richard for details on our launch fronts Richard.

Richard Kim: Thank you and good morning, everyone echoing Greg's earlier sentiments. It continues to amaze us how much of an impact memorizes made across narcolepsy community and I am excited to be here. This morning to discuss our commercial launch in more detail.

Speaker Change: Beyond our commercial and clinical progress, we recently announced the district of Columbia courts favorable ruling affirming the fda's approval in clinical superiority decision for Lou rise based on its unique once nightly dosing profile.

Richard Kim: At the end of the third quarter, we had 2300 patients on therapy. We also saw solid pace of new patient starts with 700 patients who initiated therapy in the third quarter showing that demand has been consistent.

Speaker Change: We are pleased that this ruling for a number of reasons as we continue executing our launch while mitigating an important legal and business risks for the company.

Richard Kim: Turning to the patient segments, we have always believed that growth for ox debates in narcolepsy won't be driven by <unk> growing and you'd Oxford patients.

Richard Kim: And now we are seeing the nude octavate segment emerge at the fastest growing segment for patient initiations.

Speaker Change: The initiation of our IH phase III trial, and the affirmative court decision and the district of Columbia HCA litigation.

Richard Kim: For patient switching from first generation of <unk> launch to date, they are our largest group of initiations and patients on therapy.

Speaker Change: As we look towards 2025 with a clear vision for growth we remain focused on executing the near term value drivers, including the continued launch of <unk> and our lifecycle management efforts all in our pursuit of realizing the full potential of Bloom rice for all stakeholders.

Richard Kim: We will continue to be a key patient segment as the competitive value proposition for once at bedtime dosing is extremely compelling for these patients.

Richard Kim: We've also seen consistent trends quarter over quarter with patients who have tried and previously discontinued ox debates.

Speaker Change: I'll now turn the call over to Richard for details on our launch progress Richard.

Richard Kim: With the growth and the need to occupy patient segment. This does have an impact in terms of the overall persistency for patients on the rise.

Thank you and good morning, everyone echoing Greg's earlier sentiments. It continues to amaze us how much of an impact <unk> made across narcolepsy community and I'm excited to be here. This morning to discuss our commercial launch in more detail.

Richard Kim: First and importantly, based on the data we have we see that in your mind has overall improved persistency compared to twice 80 acre base.

Speaker Change: At the end of the third quarter, we had 2300 patients on therapy.

Richard Kim: This is for both the switch and the new ion <unk> patients.

Speaker Change: We also saw a solid pace of new patient starts with 700 patients who initiated therapy in the third quarter showing that demand has been consistent.

Richard Kim: However, not surprisingly, we are seeing lower persistency rates and new to occupy patients versus switch patients.

Speaker Change: Turning to the patient segments, we have always believed that growth for ox debates in narcolepsy won't be driven by <unk> growing and you to Oxford patients.

Richard Kim: When patients do not have prior experience with ox debates and are not clear that it can take some time to find the optimal dose.

Richard Kim: While balancing tolerability this can lead to earlier and higher rates of discontinuation.

Speaker Change: And now we are seeing the need Octavate segment emerged as the fastest growing segment for patient initiations.

Richard Kim: These patients need more frequent engagement, especially during the first several weeks of therapy.

Speaker Change: For patients switching from first generation <unk> launch to date, they are our largest group of initiations and patients on therapy.

Richard Kim: We started to make key investments to address persistency.

Richard Kim: These efforts include doubling the number of nurse care navigators that rise up.

Speaker Change: <unk> will continue to D C patient segment as the comparative value proposition for once at Bedtime dosing is extremely compelling for these patients.

Richard Kim: And increasing their overall education efforts regarding tolerability and efficacy.

Speaker Change: We've also seen consistent trends quarter over quarter with patients who have tried and previously discontinued ox debates.

Richard Kim: In addition, we have increased the cadence for patient engagement nominally from rice up but also from the specialty pharmacies.

Speaker Change: With the growth and the need to occupy patient segment.

Richard Kim: We are also doubling our field team that supports both offices and patients and initiating and refilling them rice.

Speaker Change: <unk> had an impact in terms of the overall persistency for patients on the rise.

Speaker Change: First and importantly.

From an HCP perspective, we continue to increase <unk> writers in the highest volume <unk> prescribers.

Speaker Change: Based on the data we have we see that with your mice has overall improved persistency compared to twice 80 acre base.

Richard Kim: There are about 500, Acp's now make up 50% of the market volume and.

This is for both the switch and the new <unk> patients.

Richard Kim: And we are pleased that at September 30 that 90 percentage of Britain propylene price.

Speaker Change: However, not surprisingly, we are seeing lower persistency rates and new to akshay patients versus switch patients.

Richard Kim: We also continue to see more lower volume oxalate prescribers begin to write balloon rise and treat more eligible patients in part a loom rises availability.

Speaker Change: When patients do not have prior experience with <unk> and are not clear that it can take some time to find the optimal dose while balancing tolerability. This can lead to earlier and higher rates of discontinuation.

Richard Kim: Additionally, we have seen a continued expansion of health care practitioners, who had never written for <unk> fire <unk>.

Speaker Change: These patients need more frequent engagement, especially during the first several weeks of therapy.

Richard Kim: This group now represents about 150 providers, which is up from more than over 100 last quarter.

Speaker Change: We started to make key investments to address persistency. These.

Richard Kim: For these reasons, we have made the decision to expand our sales team to increase our coverage and frequency with moderate and lower volume Octavate prescribers.

Speaker Change: These efforts include doubling the number of nurse navigators that rise up.

Speaker Change: And increasing their overall education efforts regarding tolerability and efficacy.

Richard Kim: As well as targeted prescribers, who have previously not used oxy base.

Speaker Change: In addition, we have increased the cadence for patient engagement not only from rice up but also from the specialty pharmacies.

Richard Kim: While at the same time, maintaining our continued focus on the highest volume prescribers.

Speaker Change: We are also doubling our field team that supports both offices and patients and initiating and refilling them rice.

Richard Kim: We believe these moderate low and new prescriber groups represent an additional wave of growth and opportunity for continued market expansion based on what we have seen thus far in the launch.

Speaker Change: From an HCP perspective, we continue to increase <unk> writers in the highest volume <unk> prescribers.

Richard Kim: Further we are also excited for and have already been executing against the recent approval for <unk> in pediatric narcolepsy patients seven years of age and older.

Speaker Change: There are about 500, Hcp's now make up 50% of the market volume.

Speaker Change: And we are pleased that at September 30th that 90% hybrid propylene price.

Richard Kim: To close we had another consistent quarter of increases in patient starts and we have built a solid foundation for our launch going forward.

Speaker Change: We also continue to see more lower volume oxalate prescribers begin to write for the rise and treat more eligible patients and prior to loop prices availability.

Speaker Change: Additionally, we have seen a continued expansion of health care practitioners, who had never written for an Octavate fire now right further in mice.

Richard Kim: Now successful launches are all about listening learning and adapting and we are now in a new phase of the launch that comes with new challenges and new opportunities.

Speaker Change: This group now represents about 150 providers, which is up from more than over 100 last quarter.

Richard Kim: There are dynamics in a launch with the source of patient initiations being driven more by new to Oxford patients and what comes with these patients is lower persistency rates, which can potentially impact the rate of quarter over quarter growth in net patient adds.

Speaker Change: For these reasons, we have made the decision to expand our sales team to increase our coverage and frequent suite with moderate and lower volume oxalate prescribers.

Speaker Change: As well as targeted prescribers, who have previously not used ox debates.

Richard Kim: We are making additional investments that we believe will drive demand.

Speaker Change: While at the same time, maintaining our continued focus on the highest volume prescribers.

Product fulfillment and improve persistence rates over the long run.

We believe these moderate low and new prescriber groups represent an additional wave of growth and opportunity for continued market expansion based on what we have seen thus far in the launch.

Richard Kim: The additional investments are with a clear goal to maximize the amazing opportunity we have from <unk> to become the preferred octavate among people with narcolepsy and providers.

Speaker Change: Further we are also excited for and have already been executing against the recent approval for <unk> in pediatric narcolepsy patients seven years of age and older.

Richard Kim: Now I will turn the call over to Tom for an update on our financial results.

Richard Kim: Tom.

Tom McHugh: Thank you Richard.

Speaker Change: Before I begin. Please note that full financial results are available in the press release issued this morning and the 10-Q.

Speaker Change: To close we had another consistent quarter of increases in patient starts and we have built a solid foundation for our launch going forward.

I will also be reviewing non-GAAP financial results, which can be found on our investor Relations website at investors Dot Avenue Dot com.

Speaker Change: Now successful launches are all about listening learning and adapting and we are now in a new phase of the launch that comes with new challenges and new opportunities.

Speaker Change: I'll start with our topline results in.

Speaker Change: In the quarter ended September 30, we reported net revenue of $50 million and gross profit of $43 9 million and we estimate the number of weeks of inventory in the channel and at September 30 was approximately the same as June 30.

Speaker Change: There are dynamics in the launch with the source of patient initiations being driven more by new to Oxford patients and what comes with these patients is lower persistency rates, which can potentially impact the rate of quarter over quarter growth in net patient adds.

Speaker Change: With respect to gross profit I will further note that cost of goods sold includes a one time adjustment for an estimated potential royalty on sales of <unk> for the period February 2024 through June 2024.

Speaker Change: We are making additional investments that we believe will drive demand product fulfillment and improved persistence rates over the long run.

Speaker Change: Related to the ongoing patent litigation with jazz, which impacted gross margin by approximately three 5%.

Speaker Change: The additional investments are with a clear goal to maximize the amazing opportunity we have from them rise to become the preferred oxidate among people with narcolepsy and providers.

The adjustment was recorded as a noncash true up in the quarter ended September 30.

While we await a final disposition of that matter and any related appeals. This potential royalty has no near term impact on cash.

Tom McHugh: Now I will turn the call over to Tom for an update on our financial results Tom. Thank.

Speaker Change: And we expect that gross margin going forward will be greater than 90%, including an estimate of what potential ongoing royalty.

Tom McHugh: Thank you Richard.

Before I begin. Please note that full financial results are available in the press release issued this morning and the 10-Q.

Speaker Change: Turning to operating expenses, we reported $44 2 million of GAAP operating expenses for the third quarter.

Tom McHugh: I will also be reviewing non-GAAP financial results, which can be found on our investor relations website at investors Dot <unk> Dot com.

Speaker Change: Which includes $6 4 million of noncash charges comprised of stock based compensation of $5 4 million and depreciation and amortization of $1 million.

Tom McHugh: I'll start with our top line results in.

Tom McHugh: For the quarter ended September 30, we reported net revenue of $50 million and gross profit of $43 9 million and.

Speaker Change: After adjusting for these items cash operating expenses were $37 8 million.

Tom McHugh: And we estimate the number of weeks of inventory in the channel and at September 30 was approximately the same as June 30.

Speaker Change: And we expect that recurring quarterly cash operating expenses for the fourth quarter. We will begin the range of $40 million to $45 million, which includes the additional patient and provider support investments Richard noted earlier and.

Tom McHugh: With respect to gross profit.

Tom McHugh: A further note that cost of goods sold includes a onetime adjustment for an estimated potential royalty on sales of loom rise for the period February 2024 through June 2024.

Speaker Change: In noncash operating expenses will be in the range of $67 million.

Tom McHugh: Related to the ongoing patent litigation with jazz, which impacted gross margin by approximately three 5%.

Speaker Change: With respect to the balance sheet, we had approximately $66 million of cash cash equivalence and marketable securities as of September 30.

Tom McHugh: The adjustment was recorded as a noncash true up in the quarter ended September 30.

Speaker Change: Third to $71 million as of June 30.

Speaker Change: The net use of cash during the quarter included $2 million for the payment of a commitment fee due to not exercising the option to draw the second royalty tranche under the world royalty financing agreement, we entered into at the beginning of 2023.

Tom McHugh: While we await a final disposition of that matter and any related appeals. This potential royalty has no near term impact on cash and.

Tom McHugh: And we expect the gross margin going forward will be greater than 90%, including an estimate of the potential ongoing royalty.

Speaker Change: With respect to achieving operating breakeven we were just shy on a GAAP basis with an operating loss of $327000.

Tom McHugh: Turning to operating expenses, we reported $44 2 million of GAAP operating expenses for the third quarter.

Speaker Change: After adjusting for noncash operating expenses adjusted EBITDA calculated as gross profit of $43 9 million minus cash operating expenses of $37 8 million was a positive $6 1 million.

Tom McHugh: Which includes $6 4 million of noncash charges comprised of stock based compensation of $5 4 million and depreciation and amortization of $1 million.

Tom McHugh: After adjusting for these items cash operating expenses were $37 8 million.

Speaker Change: And as we look ahead to Q4 and entering the holiday season, we expect potential seasonal impacts which include the patients may not this as their provider during the typical cadence and fewer shipping days.

Tom McHugh: And we expect that recurring quarterly cash operating expenses for the fourth quarter. We will begin the range of $40 million to $45 million, which includes the additional patient and provider support investments Richard noted earlier.

Speaker Change: Furthermore, we expect higher gross to net deductions, which will primarily impact the inventory in the channel at December 31 <unk>.

Tom McHugh: And noncash operating expenses will be in the range of $67 million.

Tom McHugh: With respect to the balance sheet, we had approximately $66 million of cash cash equivalents in marketable securities as of September 30th.

Speaker Change: Given the insurance plans reset deductibles and increased co pay assistance in the new year.

Speaker Change: Finally.

Tom McHugh: Fair to $71 million as of June 30.

Speaker Change: Based on our current plans and assumptions, we expect that cash flow will be positive during the fourth quarter.

Tom McHugh: The net use of cash during the quarter included $2 million for the payment of a commitment fee due to not exercising the option to draw the second royalty tranche under the world royalty financing agreement, we entered into at the beginning of 2023.

Speaker Change: Our expectations regarding financial results for the fourth quarter are based on a number of factors, including the number of reimbursed patients on numerous net pricing well numerous cash operating expenses and the seasonality factors I mentioned, a few months ago.

With respect to achieving operating breakeven we were just shy on a GAAP basis with an operating loss of $327000.

Speaker Change: And with that I'll turn the call back to Gregg for closing remarks.

Gregg: Thank you Tom Q3, if the quarter marked by a number of achievements and consistent progress across a number of key areas.

After adjusting for noncash operating expenses adjusted EBITDA calculated as gross profit of $43 9 million minus cash operating expenses of $37 8 million was a positive $6 1 million.

Speaker Change: As we've continued to execute on our launch and build our patient base expanded the eligible target treatment population.

Speaker Change: <unk> pediatric approval, we've initiated our phase III IH trial, and we secured a favorable and strategically important court decision from the DC Court.

Tom McHugh: And as we look ahead to Q4 and entering the holiday season, we expect potential seasonal impacts which include that patients may not this as their provider during the typical cadence and fewer shipping days.

Speaker Change: With this substantial progress behind us and our transition into the next phase of Hulu might launch. We believe we have built the foundation required to be on our way to transforming patient care for narcolepsy patients and fulfilling the promise of Blue Mountain for all stakeholders as always we thank you for your support and we look forward to providing future updates on our progress with that we will open the <unk>.

Tom McHugh: Furthermore, we expect higher gross to net deductions, which will primarily impact inventory in the channel at December 31.

Tom McHugh: Given the insurance plans reset deductibles and increased co pay assistance in the new year.

Finally.

Speaker Change: For questions and I'll turn it back to the operator.

Tom McHugh: Based on our current plans and assumptions, we expect that cash flow will be positive during the fourth quarter.

Speaker Change: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad, you may remove yourself from the queue at any time by pressing star team.

Tom McHugh: Our expectations regarding financial results for the fourth quarter are based on a number of factors, including the number of reimbursed patients on numerous net pricing with numerous cash operating expenses and the seasonality factors I mentioned, a few months ago.

Speaker Change: Once again that is star one to ask a question, we will pause for a moment to allow questions to queue.

Speaker Change: With that I'll turn the call back to Gregg for closing remarks.

Gregg: Thank you Tom Q3, a third quarter marked by a number of achievements and consistent progress across a number of key areas as we continue to execute on our launch and build our patient base expanded the eligible target treatment population.

Speaker Change: And we will take our first question from Andrew Tsai with Jefferies. Your line is open.

Andrew Tsai: Hey, good morning, Thanks for taking my questions I appreciate the update.

Can you talk about the patient trends youre seeing so far including the month of October and the parts of November and your confidence around a strong Q4 growth trajectory. Despite I think in your prepared remarks some potential.

Gregg: <unk> pediatric approval, we've initiated our phase III <unk> trial, and we secured a favorable and strategically important court decision from the DC Court.

Gregg: With this substantial progress behind us and our transition into the next phase of alumina launch. We believe we have built the foundation required to be on our way to transforming patient care for narcolepsy patients and fulfilling the promise of blue minds for all stakeholders as always we thank you for your support and we look forward to providing future updates on our progress with that we will open the call for.

Speaker Change: His analogy and higher gross to net deductions.

Speaker Change: And are you still confident you will continue gaining share from former Octavate users as long as the existing switches.

Yes.

Speaker Change: <unk> <unk> group.

Speaker Change: Questions and I'll turn it back to the operator.

Speaker Change: Thanks, Andrew Richard.

Speaker Change: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star team. Once again that is star one to ask a question, we will pause for a moment to allow quest.

Speaker Change: Yes, Hey, good morning, Andrew Thanks for the question, yes, thus far I mean, we continue to see strong demand for <unk> in this quarter as well.

Speaker Change: I think what Tom I'd comment on is just its a shorter quarter as far as selling days in office visits and things like that but interest and demand for iridium rights remains very strong so and as far as the sourcing business from switch patients absolutely. We continue to sort of see that as a core part of the business going forward. We have just seen some of our new dynamic with the trends for where we are.

Speaker Change: <unk>.

Speaker Change: And we will take our first question from Andrew Tsai with Jefferies. Your line is open.

Speaker Change: Right now in the launch but to switch patients from the <unk> off the base will continue to remain a very important part of our business going forward because the value proposition is very compelling.

Andrew Tsai: Hey, good morning, Thanks for taking my questions I appreciate the update.

Andrew Tsai: Can you talk about the patient trends youre seeing so far including the month of October and the parts of November and your confidence around a strong Q4 growth trajectory. Despite I think in your prepared remarks, some potential seasonality and higher gross to net deductions.

Speaker Change: Great. Thanks.

Speaker Change: Thank you.

Speaker Change: Our next question preference Laura Boys with Oppenheimer. Your line is open.

Laura Boys: Hey, Thanks for the questions just the first one in terms of the new OXXO base.

Andrew Tsai: And are you still confident you will continue gaining share from former Oxidate users as well as existing switches not just the naive aka Bank group.

Speaker Change: Can you just help us understand with Ges and going forward, how does that works in terms of insurance is there a step throughs.

Speaker Change: Okay. Thanks, Andrew Richard Yeah, Hey, good morning, Andrew Thanks for the question, Yes, thus far I mean, we continue to see strong demand for <unk> in this quarter as well.

Laura Boys: Okay.

Laura Boys: To kind of deal with this in this new stage of the launch can you just help us understand how much youre going to grow the sales force or just maybe a hierarchy of what puts the most important thing to work on here to adapt to this new reality.

Speaker Change: I think what Tom I'd comment on is just its a shorter quarter as far as selling days in office visits and things like that but interest and demand for <unk> remains very strong still and as far as the sourcing business from switch patients absolutely. We continue to sort of see that as a core part of the business going forward. We have just seen some of our new dynamic with the trends for where we are right now.

Okay. Thanks, Frank I think your first question is centered around the role of <unk> relative to <unk> and then how are we going to expand and continue to invest in our launch as it continues to progress so Richard.

Speaker Change: The launch but to switch patients from the twice the ox debates will continue to remain a very important part of our business going forward because the value proposition there is very compelling.

Laura Boys: As far as the new dock based on any <unk> or step for us Frank.

Richard Kim: Our plan right from the beginning as far as the payers, we're concerned with to get parity assets with the best of the OXXO base. We have the team has done a really excellent job with that with 85% commercial coverage. So it's very rare that an AG is a step or right for us right. Now so we see that care pathway to need oxygen patients says.

Great. Thanks.

Speaker Change: Thank you we'll take our next question for Fred Fabre Boys with Oppenheimer. Your line is open.

Speaker Change: Hey, Thanks for the question. So just the first one in terms of the new OXXO base can.

Laura Boys: <unk> robust for us and.

Laura Boys: And as far as the sales force is concerned maybe I'll step back and sort of say when we first launched our goal is clearly to get uptake with the highest volume ox debate prescribers and with 90% who have written through the third quarter. We feel like we've done a really good job with that it's time now to continue to add to grow Mark was moderate and low oxalate users. So we're adding a little over 10.

Speaker Change: Can you just help us understand with <unk>.

Speaker Change: And going forward, how does that works in terms of insurance is there a step throughs.

Speaker Change: To kind of deal with this new stage of the launch can you just help us understand how much youre going to grow the sales force or just maybe a hierarchy of what what's the most important things to work on here to adapt to this new reality.

Laura Boys: Percent of our field force into that mix right now to increase our reach and frequency to those providers and also as we stated in our prepared remarks, we're getting people who had never written oxalate before who are BRCA program writes about 150 of those now launch date. So we also will be targeting a select group of those to increase our mix of new writers for <unk> as well and I think the only comment I would add.

Speaker Change: Yeah. Thanks, Frank I think your first question is centered around the role of Ags <unk> relative to new to OXXO Bates and then how are we going to expand and continue to invest in our launch as it continues to progress so Richard.

Laura Boys: Is that across these moderate to low prescribers without compromising our focus and efforts on the highest value targets. There are also switch patients that exist in those practices as well. So I think the source of patient is is doesn't change for us in terms of new to oxo baked.

Richard Kim: Yes, as far as the new docs based on any <unk> or step throughs Frank.

Our plan right from the beginning as far as the payers were concerned with the gang parity access with the best of the oxo base. We have the team has done a really excellent job with that with 85% commercial coverage. So it's very rare that an AG is a step or the rise for US right. Now so we see that care pathway to new docs vacation says.

Laura Boys: Previously treated in discontinued or switch patient in.

Laura Boys: In particular and current <unk> prescribers, right, I think where we're where we're adding some people to provide some additional coverage is and those physicians and physicians that look a lot like those physicians, who have made the decision to write and treat with <unk>, who had never before used in occupation predominantly based upon the dosing issues that they didn't want to have to do.

Richard Kim: Robust for us and.

And as far as the sales force is concerned maybe I'll step back and sort of say when we first launched our goal is clearly to get uptake with the highest volume box abate prescribers and with 90% who had written through the third quarter. We feel like we've done a really good job with that it's really the time now to continue to add to grow Mark was moderate and low oxalate users. So we're adding a little over 10.

Laura Boys: For their patients.

Speaker Change: Okay, Great and then maybe for Tom.

Speaker Change: You had talked about how you are tracking the south and I think on the last call I think for the year. It looks like $168 million was the sell side consensus on the revenues.

Richard Kim: Percent of our field force since they mixed right now to increase our reach and frequency to those providers and also as we stated in our prepared remarks, we're getting people who had never written oxalate before we'll break it <unk> about 150 of those now lots of days. So we also would be targeting a select group of those to increase our mix of new writers for the rise as well, yeah, and I think the only comment I would add.

I know youre, not giving guidance, but any comments in terms of revenues and the sell side and then I guess, maybe lastly, there's been a lot of developments on the litigation front I think maybe just an update on what's next what is still.

Richard Kim: And is that across these moderate to low prescribers without compromising our focus and efforts on the highest value targets. There are also switch patients that exist in those practices as well. So I think the source of patient is doesn't change for us in terms of new to OXXO baked.

Speaker Change: Up there in terms of litigation would be helpful. Thank you.

Speaker Change: Thanks, Frank I'm happy to handle legal promise you I am not sure no. Thanks for the question Patrick appreciate it.

Richard Kim: Previously treated in discontinued or switch patients in.

Speaker Change: I think with respect to our expectations in Q4, we're really pleased with the progress to date through the first five full quarters of launch.

Richard Kim: In particular and current <unk> prescribers, right, I think where we're where we're adding some people to provide some additional coverage is and those physicians and physicians that look a lot like those physicians, who have made the decision to write and treat with loom rice, who had never before used inoculate predominantly based upon the dosing issues that they didn't want to have to do.

Speaker Change: And we do expect to see continued and consistent patient demand for <unk>.

Speaker Change: Across all patient segments.

Speaker Change: That said, we have seen an increase in the <unk> ox abate patient segment, which which which does have an impact of persistency that we're in the process of assessing so as we're looking ahead to Q4.

Richard Kim: For their patients.

Speaker Change: Okay, Great and then maybe for Tom.

Speaker Change: And our expectations for Q4, we're evaluating the growth and do the Oxford segment, it looks like as well as seasonality factors I mentioned during the call.

Speaker Change: You had talked about how youre tracking the south.

On the last call I think for the year it looks like $168 million was the sell side consensus on the revenues.

Speaker Change: And and Frank as it relates to legal maybe I'll, just kind of tick through kind of where things are from a legal perspective.

Speaker Change: I know youre, not giving guidance, but any comments in terms of revenues and the sell side and then I guess, maybe lastly, there's been a lot of developments on the litigation front I think maybe just an update on what's next what is still.

Speaker Change: Obviously as we noted we're pleased with the DC Court decision, which aligns with what we have stated all along.

Speaker Change: That perspective on the other legal matters, which are really Delaware related.

Speaker Change: Up there in terms of litigation would be helpful. Thank you.

Speaker Change: Really there's three the first one is the ongoing patent trial.

For which the next steps in that case are anticipated to include.

Thanks, Frank I'm happy to handle legal Thomas you want me to start with yes sure no. Thanks for the question Cracker appreciate it.

Speaker Change: Post trial motions that whole process as well as a briefing and a hearing regarding the future ongoing royalty rate neither of those have been scheduled yet so that is pending right. There's the IH injunction, which is under appeal at the federal circuit and briefing for that matter is scheduled to be complete next week with oral <unk>.

Speaker Change: I think with respect to our expectations in Q4, we're really pleased with the progress to date through the first five full quarters of launch and we do expect to see continued and consistent patient demand for <unk>.

Speaker Change: Across all patient segments.

Speaker Change: That said, we have seen an increase in the nude oxidate patient segment, which which which does have an impact on persistency that we're in the process of assessing so as we're looking ahead to Q4.

Speaker Change: Arguments currently scheduled for February 2025, docket, but not yet set.

And then lastly, and equally as important as our antitrust action.

Speaker Change: And our expectations for Q4.

Speaker Change: Against jazz vast progressing.

Speaker Change: We're evaluating the growth and do the Oxford segment quite frankly swaps seasonality factors I mentioned during the call.

Speaker Change: <unk>.

Speaker Change: Crop in accordance to what needs to occur during this period of time.

And and Frank as it relates to legal maybe I'll, just kind of tick through kind of where things are from a legal perspective.

Speaker Change: And I'll, just remind everybody that.

Speaker Change: That is really about what we believe to be roughly delayed during the NDA review process based upon the <unk> lifted rems patents.

Speaker Change: Obviously as we noted we're pleased with the D. C Court decision, which aligns with what we have stated all along from that perspective on the other legal matters, which are really Delaware related.

And the impact that it had and that is currently scheduled with a jury trial beginning November <unk> of next year. So that's where we sit on the legal matters.

Speaker Change: Really there's three the first one is the ongoing patent trial.

Speaker Change: Thank you and sorry, if I could just jump in here.

Speaker Change: When.

Speaker Change: For which the next steps in that case are anticipated to include <unk>.

Speaker Change: With the district of Columbia.

Speaker Change: In terms of clinical superiority can that read through to the appeal that you guys have with IH or are we is it.

Speaker Change: Post trial motions that whole process as well as a briefing and hearing regarding the future ongoing royalty rate neither of those had been scheduled yet so that is pending right. There's the IH injunction, which is under appeal at the federal circuit and briefing for that matter is scheduled to be complete next week with oral.

Speaker Change: Not discussing that.

Speaker Change: Yes, I don't think its appropriate to comment on.

Speaker Change: On the specifics of that other than that.

Speaker Change: We're pleased that the FDA has now granted us an orphan exclusivity twice.

Speaker Change: And.

Arguments currently scheduled for February 2025, docket, but not yet set and then lastly, and equally as important as our antitrust action.

Speaker Change: The court the DC Court has affirmed that decision and what Javier FDA came to that decision.

Speaker Change: Alright, Thank you congrats on the quarter.

Speaker Change: Against jazz that's progressing.

Speaker Change: Thank you.

And.

Our next question from Oren <unk> with H C. Wainwright Your line is open.

Across in accordance to what needs to occur during this period of time.

And I'll, just remind everybody that.

Speaker Change: That is really about what we believe to be wrongfully delayed during the NDA review process based upon the wrongfully listed Rems patents.

Speaker Change: Thanks for taking my questions.

It seems your new patient starts are actually running ahead of our expectations, but obviously the discontinuation is something worth digging into more so.

Speaker Change: And the impact that has had and that is currently scheduled with a jury trial beginning November <unk> of next year. So that's where we sit on the legal matters.

Speaker Change: Just can you talk about why new patients are discontinuing more I mean, you talked about education about tolerability and dose titration.

Speaker Change: Thank you and sorry, if I could just jump in here.

Speaker Change: When.

Speaker Change: Is there actually any difference do you believe in the Tolerability for these patients.

Speaker Change: With the district court of Colombia.

In terms of clinical superiority can that read through to the appeal that you guys have with IH or are we just is it are we.

Speaker Change: Versus long time users of <unk>.

Speaker Change: Not discussing that.

Speaker Change: Yeah.

Speaker Change: Twice nightly or is it really just that every new patient is always more challenging and.

Speaker Change: Yes, I don't think its appropriate to comment on <unk>.

Speaker Change: Pacific to that other than that we're pleased that the FDA has now granted us an orphan exclusivity twice.

Speaker Change: I guess is the support services that you offer from rise up.

Speaker Change: And.

Speaker Change: More important on an ongoing basis sort of long term to hold their hand or is it really just about expectations setting upfront and doing a better job there and I think someone asked about reimbursement for new patients do you see any issues with reauthorization is being needed early on and that.

Speaker Change: The court the DC Court has affirmed that decision and what how the FDA came to that decision.

Speaker Change: Alright, Thank you and congrats on the quarter.

Speaker Change: Thank you will.

Speaker Change: We will take our next question from Oren <unk> with H C. Wainwright Your line is open.

Speaker Change: Is the source of new patient situations as well.

Speaker Change: Thanks for taking my questions. So.

Speaker Change: And I have a follow up thanks.

Speaker Change: So things are new patient starts are actually running ahead of our expectations, but obviously the discontinuation.

Speaker Change: Yes, yes, thanks, a lot there so maybe Richard can start yes, sorry, yes.

Speaker Change: Is something worth digging into more so.

Besides which celebrates our and so yes as far as the higher discontinuation rates I think the biggest way we would release sort of frame. This is a lot of these patients who are never been an occupation. They just don't know what to expect right.

Speaker Change: Just can you talk about why new patients are just continuing more I mean, you talked about education about tolerability and dose titration.

Speaker Change: Is there <unk>.

Speaker Change: Are they coming from taking forgive me, it's a wake promoting agents that can work very quickly and <unk> are off vacations, they need to find the optimal dose overall.

Speaker Change: Truly any difference do you believe in the Tolerability for these patients.

Versus long time.

Speaker Change: Users.

Speaker Change: A lot of physicians actually do set expectations, but we also apart from market research. Many do not and also there is a lot of information generally shared with patients. So the nurse for navigators that writes a player in it.

Speaker Change: Twice nightly or is it really just that every new patient is always more challenging and.

Speaker Change: I guess is the support services that you offer from rise up.

Speaker Change: Central role in really helping support patients really in managing expectations and helping them know what to expect knowing that it may take several weeks for your efficacy to really kick in and knowing that as you need change your dose she may extend for more experienced more tolerability issue. So.

Speaker Change: More importance on an ongoing basis sort of long term to hold their hand or is it really just about expectations setting upfront and doing a better job there and.

Speaker Change: Someone asked about reimbursement for new patients do you see any issues with reauthorization is being needed early on and that is the source of new patient different situations as well.

CV nurse care navigators is not only critical at the beginning but really in building those relationships with patients longer term as well.

Speaker Change: It's really why we've made the investments holistically across the board there and also when it comes to reimbursement for the patients.

Speaker Change: A follow up thanks.

Speaker Change: Yes, yes. Thanks.

Speaker Change: A lot there so maybe Richard can start yes, sorry, yes.

Speaker Change: Maybe not so much the re authorizations for some of these patients and they do.

Speaker Change: Hello, <unk>, so yes as far as the higher discontinuation rates I think the biggest way we would really sort of frame. This is a lot of these patients who are never been an occupation. They just don't know what to expect right consider they come from taking forgive me. It's a wake promoting agents that can work very quickly and new docs are awfully patient they need to find.

Speaker Change: Coming to the mix from time to time, but clearly for these patients and others therapy sessions, who may change their insurance from time to time that can have an impact so overall.

Speaker Change: The reimbursement and payer mix can have an impact, but I think for the near to Akshay patients its really about establishing expectations, providing a much more frequent support for them and being there and not only at the beginning but through the whole journey of treatment as well, yes, I think the only thing I would add on to Richard's comment is that as we've gone through the launch of our source of <unk>.

Speaker Change: Optimal dose overall.

A lot of physicians actually do set expectations, but we also apart from market research. Many do not and also there's a lot of information generally started patients so the nurse for navigators right.

Speaker Change: <unk> has changed we've had to get.

Speaker Change: A central role in really helping support patients really in managing expectations and helping them know what to expect knowing that it may take several weeks for your efficacy to really kick in and knowing that as you change your dose she may extend for more experienced more tolerability issue. So.

Speaker Change: And we've gotten smarter, we got much more kind of precise or surgical in how we engage different patient types right because what happens with the switch patients and how you are helping to manage persistency is is different early on in their experience with new management. It is with a view to occupy patients. So kind of a one size fits all doesn't really work.

Speaker Change: We see the nurse care navigators is not only critical at the beginning but really in building those relationships with patients longer term as well.

Speaker Change: Metallurgy, so we've gotten much more sophisticated in that regard and as a result of that we've expanded our nurses that allows them to.

Speaker Change: That's really why we've made the investments Apple the sector across the board there and also when it comes to reimbursement for the patients.

Speaker Change: Reduced their caseload and spend more time with patients as required to help them navigate through these periods of time so again.

Speaker Change: It's maybe not so much the reauthorization for some of these patients.

Speaker Change: We have we think the right insights taking the right actions and have the ability to impact that and I think all of our data to date has demonstrated that although we have better discontinuation rates relative to the historical twice nightly trends. It's just it's not it's not the right standard we want to do better than that because we work really hard to get a patient on therapy, and we want to help them statement.

Speaker Change: Coming to the mix from time to time.

Speaker Change: For these patients in either as their patients who may change their insurance from time to time that can have an impact so overall.

Speaker Change: The reimbursement and payer mix can have an impact, but I think for the near to Akshay patients its really about establishing expectations, providing a much more frequent support for them and being there and not only at the beginning but through the whole journey of treatment as well, yes, I think the only thing I would add one to Richard's comment is that as we've gone through the launch and we and our source of business.

Speaker Change: Okay.

Speaker Change: And regarding reimbursement in general.

Speaker Change: Have there been any material changes going or are there any material changes going into 2025 both.

Speaker Change: Has changed we've had to get.

Speaker Change: In terms of Standalone coverage and maybe relative.

Speaker Change: And we've gotten smarter, we've got much more kind of precise or surgical in how we engage different patient types right because what happens with the switch patients and how you are helping to manage persistency is is different early on in their experience with new management. It is with our new <unk> patients. So kind of a one size fits all doesn't really work.

Speaker Change: Emulated positioning versus competition and.

And how much of a tailwind should Medicare coverage in 2025 and beyond and just overall can you remind us where you stand on I guess on the annualized net.

Speaker Change: Value per patients now and going forward and does that already sort of baked in.

Speaker Change: <unk>. So we've asked we've gotten much more sophisticated in that regard and as a result of that we've expanded our nurses that allows them to.

Speaker Change: Bridging our free drug supply or is that just a separate line item.

Speaker Change: Reduce their caseload and spend more time with patients as required to help them navigate through these periods of time so again.

Speaker Change: Yes, Richard take the first part.

Richard Kim: Yes, we're super pleased with the coverage that we have with the payers holistically we.

Speaker Change: We have we think the right insights taken the right actions and have the ability to impact that.

Richard Kim: We don't want to tip, our hand, and totally but we expect that continue to have very strong coverage has to go into 2025 across the board and in 2025, we should pick up some more Medicare lives overall.

Speaker Change: I think all of our data to date has demonstrated that although we have better discontinuation rates relative to the historical twice nightly trends. It's just it's not it's not the right standard we want to do better than that because we work really hard to get a patient on therapy, and we want to help them staying.

Richard Kim: So we believe and in 'twenty four 'twenty five we will be in a very strong position as far as our overall coverage is concerned.

Speaker Change: Okay.

Speaker Change: Okay and in terms of net value per patient.

Speaker Change: And regarding reimbursement in general.

Speaker Change: Have there been any material changes going or are there any material changes going into 2025 both.

Speaker Change: You can calculate the numbers, we report and which which in patient numbers. We report includes patients on free drug.

Speaker Change: In terms of Standalone coverage and maybe relative.

Speaker Change: But with that said R&D.

Speaker Change: Formulary positioning versus competition.

Speaker Change: Average net revenue per patient is right around $100000 or an annualized basis that.

Speaker Change: And how much of a tailwind should Medicare coverage in 2025 and beyond and just overall can you remind us where you stand on I guess on the annualized net.

It can fluctuate a little bit quarter to quarter, but generally speaking about $100000 per year per patient, including patients on free drug.

Speaker Change: Okay.

Speaker Change: Value per patients now and going forward and does that already sort of baked in.

Speaker Change: Perfect. Thanks, so much I don't want to be greedy ill hop back in the queue.

Speaker Change: Thank you we'll take our next question from Amy <unk> with Needham Your line is open.

Bridging our free drug supply or is that just a separate line item. Thanks.

Speaker Change: Okay, Richard take the first part second sure Yes, we're super pleased with the coverage that we have with the Payors holistic piece.

Speaker Change: Hi, good morning, Thanks for taking my question.

Speaker Change: Can you talk about what percent of mutation stocks current theme, you're seeing that are coming from new.

New patient, let the switch patients and.

Speaker Change: In terms of switch patients.

Speaker Change: Can you give us some color around the dynamics in terms of whether they're coming from the high Silicon Valley.

Richard Kim: So we believe any 24025, we will be in a very strong position as far as our overall coverage is concerned.

Speaker Change: Xylem.

Speaker Change: That ETE or does not fully marketing and.

Speaker Change: Okay and in terms of net value per patient.

Speaker Change: Do you think about investing.

Speaker Change: You can calculate the numbers, when we report and which which in patient numbers report includes patients on free drug.

Speaker Change: Behind more detailing alpha here can you just talk about how the growth.

Speaker Change: <unk> overall oxytonic market has evolved since the launch of <unk>. Thank.

But with that said R&D.

Speaker Change: Thank you.

Speaker Change: Average net revenue per patient is right around $100000 or an annualized basis.

Thanks.

Speaker Change: Maybe I'll make a couple comments and turn it over to Richard in terms of the mix of patients that we're seeing coming in I think our trends would tell us that we continue to see an increase in the new to Oxford patient.

Speaker Change: It can fluctuate a little bit quarter to quarter, but generally speaking about $100000 per year per patient, including patients on free drug.

Speaker Change: Perfect. Thanks, so much I don't want to be greedy ill hop back in the queue.

Speaker Change: Representing a larger portion.

Growing portion of our of our of.

Speaker Change: Thank you will.

Speaker Change: Take our next question from Amy <unk> with Needham Your line is open.

Speaker Change: Patients coming in at the top of the funnel through Q3.

Speaker Change: Again, the largest portion in Q3 of patient starts were off.

Speaker Change: Hi, good morning, Thanks for taking my question.

Speaker Change: Switch patients with the new to Akshay.

Speaker Change: Can you talk about what percent of mutation stocks currently you're seeing that are coming from.

Speaker Change: I would say closing the gap on the switch patient in terms of the percent mix.

Speaker Change: The new patients plus our switch station and in terms of switch patients.

Speaker Change: In terms of the dynamics of the switch I'll, maybe turn it over to Richard.

Can you give us some color around the dynamics in terms of whether they're coming from the high sodium <unk>.

Richard Kim: Yes, as far as the switch patients are concerned the majority are still coming from the mixed false patients overall care.

Speaker Change: Iron ore that AEG or does no sodium alchemy and.

Richard Kim: And we continue to expect that trend to continue and as far as the.

Speaker Change: As you think about investing.

Richard Kim: Market based as far as the growth of box debates.

Behind more detailing efforts here can you just talk about how the growth rate of the overall oxytonic market has evolved since it onto your lines. Thank you.

Richard Kim: Have visibility in some of the twice nightly sodium oxalate data at this point now, but we see clear indicators that the overall narcolepsy market is growing.

Richard Kim: First we have the new Oxford prescribers, who have never written for a twice on the ox debate around 150 of those now.

Speaker Change: Thanks.

Richard Kim: <unk> seen growth in that lower end moderate, Oxford users, including patients who had pre.

Richard Kim: Previous it wouldnt have been treated with the <unk> ox debate.

Speaker Change: Representing a larger portion.

Richard Kim: And we also have the segment of patients who were previously discontinued on twice in the Rx space coming in <unk> as well.

Richard Kim: Growing portion of our.

Richard Kim: Our.

Richard Kim: Patients coming in at the top of the funnel through Q3.

Richard Kim: Maybe the last proof point that we have for US is there is almost 20% of the ACP effects have written for them right that we either don't call on or have very minimal effort on that as part of our plan with increasing our efforts to reach more of those providers. So we definitely see opportunities to continue to build upon our foundation and continue to grow this market beyond.

Richard Kim: Again, the largest portion in Q3 of patient starts were.

Richard Kim: Switch patients with the new docs debate.

Richard Kim: I would say closing the gap on the switch patient in terms of the percent mix.

Speaker Change: In terms of the dynamics of the switch I'll, maybe turn it over to Richard.

Richard Kim: From that.

Speaker Change: <unk> has been with twice daily <unk>, Yes, I think the only comment I would add and maybe it's just putting a little bit of a different point on what Richard stated was there is no doubt since our launch we have added patients into the <unk> pool that previously were not right and thats coming from both prescribers, who have never written Octavate and.

Richard Kim: Yes, as far as the switch patients are concerned the majority are still coming from the mixed false patients overall here.

Richard Kim: And we continue to expect that trend to continue and as far as the.

Richard Kim: Market based as far as the growth of box a base.

Richard Kim: Have visibility in some of the twice nightly sodium oxalate data at this point now, but we see clear indicators that the overall narcolepsy market is growing.

Speaker Change: Fiber, who wrote very minimal ox debates and are writing more so by nature of that we believe <unk>, adding new patients into the octavate pool, but to Richard's point, we don't have great visibility on what's happened with kind of the AG and <unk> and <unk>.

Richard Kim: First we have the new Oxford prescribers, who have never written for a twice on the ox debate around 150 of those now.

Richard Kim: We're seeing growth in that lower end moderate, Oxford users, including patients who had previously.

Speaker Change: And.

Speaker Change: Xyrem in that regard in terms of their volumes, but we feel confident we will continue to expand those who are eligible.

Richard Kim: Previously wouldn't have been treated with the twice the <unk> debate.

Richard Kim: And we also have the segment of patients who were previously discontinued on twice in the AG space coming in from their minds as well.

Speaker Change: And want to go on movements.

Speaker Change: Thank you.

Richard Kim: Maybe the last proof point that we have for US is there is almost 20% of the ACP effects have written for the right that we either don't call on or have very minimal effort on that as part of our plan with increasing our efforts to reach more of those providers. So we definitely see opportunities to continue to build upon our foundation and continue to grow this market beyond.

Speaker Change: Thanks, Tom.

Speaker Change: Thank you we'll take our last question from David Anthem with Piper Sandler Your line is open.

Speaker Change: Thanks.

Couple for me first.

Speaker Change: I don't know if you mentioned this earlier, but can you go through the mix between <unk> and two <unk>.

Speaker Change: Where it has been with twice on the <unk>, Yes, I think the only comment I would add and maybe it's just putting a little bit of a different point on what Richard stated was there is no doubt since our launch we have added patients into the <unk> pool that previously were not right and thats coming from both prescribers, who have never written in oxalate and.

What youre seeing there and then secondly looking.

Speaker Change: Longer term.

Speaker Change: It looks like what we're seeing now is the oxalate.

Speaker Change: Market is expanding your competitor.

Speaker Change: Continues to grow our patients in the narcolepsy.

Speaker Change: Ibis, who wrote very minimal ox abates and are writing more so by nature of that we believe <unk>, adding new patients into the OXXO equal but to Richard's point, we don't have great visibility on what's happened with kind of the AG and and and and Xyrem in that regard in terms of their volumes, but we feel confident we will continue to.

Speaker Change: Setting as well so I guess the question is as you think about the Rx and longer term how are you thinking about to be oxidate footprint once.

Speaker Change: If in one.

Speaker Change: Takeda and others coming to the market.

Speaker Change: With their orexin agonist several years from now thanks.

Speaker Change: Span those who are eligible.

Richard Kim: Okay. Thanks Richard.

And want to go on numerous.

Speaker Change: Richard you want to take those yes.

Speaker Change: David as far as the mix of MTO and MTP, what we see from prevalence is about 30% in Q1, 70% 82, and what we see for occupant use which has been consistent with <unk> is about 70% Houston in Q1, and about 30% and NTT.

Speaker Change: Thank you.

Speaker Change: Thanks, Tom.

Thank you.

Speaker Change: Our last question from David <unk> with Piper Sandler Your line is open.

Speaker Change: Thanks, So a couple from me first.

Speaker Change: So we would agree with you as we get from the earlier question, we definitely see very solid science at the Oxford, Mark that narcolepsy is growing.

Speaker Change: I don't know if you mentioned this earlier, but can you go through the mix between empty one.

Speaker Change: <unk> and <unk>.

Speaker Change: And as far as <unk> are concerned clearly we have more to learn about.

Speaker Change: <unk>.

Speaker Change: What youre seeing there and then secondly looking.

Speaker Change: The overall profile.

Speaker Change: Longer term it looks like what we're seeing now is the oxalate.

Speaker Change: I think our view on it as we speak are thought leaders as they probably will have.

Speaker Change: An important impact on how wake promoting agents are used but our feedback received in general is a lot of the providers say a nice combination would really be an erection along with an ox debate and clearly they're having.

Speaker Change: Market is expanding your competitor.

Speaker Change: Continues to grow.

Speaker Change: <unk> in the narcolepsy setting as well so I guess the question is as you think about the <unk> longer term how are you thinking about the oxidate footprint once if and when.

Speaker Change: Taking away the need to sort of dosing middle market is important but to sort of be able to address those issues and potentially with those patients who may have challenges with their sleep.

Speaker Change: Takeda and others coming to the market.

Speaker Change: With their orexin agonist several years from now thanks.

Speaker Change: Protecting and pharma as well.

Speaker Change: That there is room for a growing marketplace and there's potentially room for <unk> to be used along with an observation in the future as well.

Speaker Change: Okay. Thanks, David Richard you want to take those.

Speaker Change: David as far as the mix of <unk> and NTT, what we see from prevalence is about 30% in Q1, 70% in Q2, and what we see for occupant used which has been consistent with <unk> is about 70% use in Q1 and about 30% and NTT.

Speaker Change: John anything you want to add to that.

John: Sorry about the technical difficulties. So a couple of comments to add to what Richard said and specifically on <unk>. We're really pleased that we are the only octavate that has published data demonstrating consistent efficacy in both subgroups. This is certainly important based upon what Richard has said where historically.

Richard Kim: So we would agree with you as we get from the earlier question, we definitely see very solid science at the oxalate Mark that narcolepsy is growing.

John: Octavate to Dan more reserved for narcolepsy type, one and yet narcolepsy <unk> is the larger type of narcolepsy in regard to the Orexin agonist, where certainly a company that is always been a recognized more options for patients are better.

Richard Kim: And as far as <unk> are concerned.

Richard Kim: We have more to learn about.

The overall profile.

Richard Kim: I think our view on it as we speak are thought leaders as they probably will have.

Richard Kim: An important impact on how wake promoting agents are used but our feedback received in general is a lot of the providers say a nice combination would really be an erection along with an oxybutynin clearly if we were having.

John: We continue to monitor the progress and of course, the focus with the Orexin agonist as far as what is out in front in Q1, only and the focus is also on the daytime symptoms. So we have published data looking at the.

Taking away the need to sort of dose during the middle of that is important but to sort of be able to address that there was a time issues and potentially with those patients who may have challenges with their sleep protesting.

Speaker Change: Impact of <unk> on the nighttime symptoms, specifically on disrupted nighttime sleep and so as Richard mentioned, we continue to see leading.

Richard Kim: Protecting insomnia as well that that there is room for a growing marketplace and there's potentially room for <unk> to be used along with an ox debated in the future as well.

Speaker Change: Kols you emphasize it it's a matter of using both in the future and specifically the rise to avoid the middle of the night dose.

Speaker Change: John anything you want to answer that sure happy to you one comment first.

Speaker Change: Thanks, Shannon, Thanks, David and again apologize for the for the disruption technically.

Richard Kim: Unique.

Speaker Change: Thank you the question and answer session is now concluded I will now turn the program back over to management for any additional or closing remarks.

Speaker Change: Thank you operator and again, thank you everyone for your time and joining us today for our third quarter 2024 earnings call have a great rest of your day and we look forward to catching up with with you throughout the course of the next few days. Thanks.

That concludes today's teleconference. Thank you for your participation you may now disconnect.

Q3 2024 Avadel Pharmaceuticals PLC Earnings Call

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