Q1 2025 Akebia Therapeutics Inc Earnings Call
Joining by welcome to the Kbr's first quarter 'twenty 25 financial results Conference call. At this time, all participants are in a listen only mode.
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Speaker Change: I would now like to hand, the conference over to your first speaker for today, Mrs. Mercedes Carrasco Senior director of Investor Relations. Please go ahead.
Speaker Change: Thank you and welcome to the UBS first quarter 2025 financial results and business update conference call. Please note that our press release was issued earlier today Thursday may eight detailing our first quarter of 2025 financial results and that release is available on the investors set.
Speaker Change: <unk> of our website for your convenience a replay of today's call will also be available on our website. After we conclude.
Speaker Change: Joining me for today's call, we have John Butler, Chief Executive Officer, Nicholas Grun, Chief Commercial Officer, and Eric <unk>, Chief financial and Chief Business Officer.
Speaker Change: I'd like to remind everyone that this call include forward looking statements. Each forward looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements additional information describing these risks.
Speaker Change: Inc. Are included in the financial results press release that we issued on May 8th as well as in the risk factors and management discussion and analysis section of our most annual report and quarterly reports filed with the SEC with that I'd like to introduce our CEO John Butler.
John Butler: Thanks, Mercedes and thanks to everyone for joining us this morning.
John Butler: Well during our last call. We shared initial progress on our Vas you Gotta do start U S product launch and I'm extremely pleased to report we continued our strong performance.
John Butler: We delivered U S net product revenues of $12 million versus our guidance of $10 million to $11 million in the first quarter.
John Butler: I believe our strong early performance is a reflection of nephrologist desire for a new treatment option to treat anemia in <unk> patients on dialysis.
John Butler: So I continued to express caution that we're in the early stages of product introduction. It is one of the strongest launches I've ever seen in the dialysis market.
John Butler: I want to acknowledge the excellent job, our commercial and medical affairs teams are doing educating dialysis providers prescribers anemia managers and other members of the patient care team about vaxjo.
John Butler: The complexity of selling our product in the dialysis market should never be underestimated, but our strategy to build prescriber demand and quickly transition patients onto the FCO is playing out as planned.
John Butler: Importantly, we're also encouraged to see that patients are staying on therapy as evidenced by the growing number of refills being written and as expected. We're also seeing the utilization of higher doses as patients doses are titrated to achieve and maintain appropriate hemoglobin levels.
John Butler: As we've said in the past we have commercial contracts in place with dialysis organizations, covering nearly 100% of dialysis patients.
John Butler: The top five dialysis organizations have now ordered Vaxjo. However, nearly all of the revenues still coming from the small to mid sized dialysis organizations, who treat approximately 150000 patients collectively.
John Butler: One of the large dialysis providers is planning a large pilot to operationalize its protocol.
John Butler: We expect that pilot to begin in the third quarter.
John Butler: The other large provider is earlier in their process, but I am encouraged that theyre, making the product available on an exception basis for patients.
John Butler: Given that each <unk> treats over 200000 patients, bringing one on board with a broad protocol will more than double the number of patients with access to <unk>.
John Butler: Now shifting gears the voice study in collaboration with U S. Renal care continues to March towards full enrollment and now has about 75% of patients enrolled.
John Butler: As you recall the target enrollment is approximately 2200 subjects.
John Butler: In just five months of enrollment this is tremendous progress.
John Butler: We believe voice could generate data on the benefits associated with vascular treatment, including potential improvements in hospitalization, which is critical information for prescribers and dialysis organizations.
John Butler: We also continue to pursue an approval of <unk> in the non dialysis patient population and remain on track with our goal to initiate our phase III Valor trial in MDT in the second half of 2025.
John Butler: We're planning to meet with the FDA to further discuss the valor trial, which will study the use of <unk> in treating anemia in <unk> patients who are not on dialysis. We will continue to update you on our progress as appropriate.
John Butler: While the vascular launch and initiating valor remain our top priorities will also update you throughout 2025 about our plans to advance our pipeline of <unk> inhibitors and other assets.
John Butler: We are working towards having multiple product candidates enter the clinic this year.
John Butler: <unk> is an incredibly strong position. The team has worked very hard to get us here.
John Butler: Now first Nick is going to give you a detailed view of our launch progress and then Eric will talk to you about our strong first quarter results and enhanced financial position.
John Butler: Now, let me turn it over to Nick to give you more color on the <unk> launch.
Nick: Thanks, John Good morning folks I'm also pleased with the strength of the <unk> launch and the sales achieved through the first quarter as.
Nick: As we have discussed previously during the launch we are focusing on breadth the number of physicians prescribing and depth. The amount of physicians are prescribing on those efforts, we see multiple indicators of strong demand from the field.
Nick: First we ended the quarter with more than 640, prescribers, which represented nearly 25% increase compared to the end of February when we last updated you.
Nick: We are adding to the breadth of prescribers from various dialysis organizations.
Still most are ordering for patients at USC.
Nick: While prescribers at other dialysis organizations are writing USR see makes up the vast majority of prescriptions.
Nick: Order to continue to increase breath, we will not only need to continue to grow within our current customers, but we must also continue to expand into new small to mid sized dialysis organizations, many of which have protocols in place or have recently operationalized the protocols.
Nick: John noted that we have now generated sales from a top five dialysis organizations, who treat approximately 85% of patients the orders from the top to dialysis organizations were to address patients with medical exceptions.
Nick: We continue to work with large dialysis organizations and expect one of them to operationalize vaxjo in the third quarter of this year.
Nick: This will allow us to continue to grow our breadth of prescribers substantially.
Nick: Second depth of prescribing is tracked by looking at prescriptions per provider prescriptions per provider have grown to approximately 12 at the end of March from nearly eight at the end of February the.
Nick: The increase speaks to our focus on depth that I described during our last call. Our team has worked diligently to help prescribers identify appropriate patients and work through the ordering process.
Nick: Though there is a broad range of utilization within the prescribers, we believe for some physician. It reflects a shift from initial trial to sustained use across a broader number of patients.
Nick: Once a patient starts therapy. It is important for them to maintain on therapy. We measure this through the refill rate refills are coming in as expected about one third of all prescriptions written in quarter one were refills.
Nick: Notably the refill data demonstrate an increase in dose as prescribers titrate towards levels, we observed in our clinical trials.
Nick: Lastly, we are closely monitoring purchasing patterns at the end of the quarter, we have seen channel stocking in about four weeks of inventory, which is about one week higher than earlier in the quarter as we move further through the launch we should expect inventory fluctuations as we bring on more customers and we believe inventory will settle between two to four weeks on hand.
Nick: For clarity, we estimate Vasco Q1 sales were composed of about two thirds demand and one third inventory.
Nick: Anecdotally many of our key account managers have commented on the positive reception among prescribers.
Nick: Just a small sample size, we are hearing that physicians and in EMEA managers are commenting on hemoglobin stability ease of dose and titration minimal dose adjustments and efficacy in Esa Hypo responders. We are hopeful that this is an early sign that dialysis clinic staff will be able to maintain a patient's hemoglobin within the target range and.
Nick: Be able to focus on other aspects of a patient's care.
Nick: We have also heard the disappointment and importantly willingness to advocate from physicians affiliated with dialysis organizations that have yet to make <unk> available for prescribing through a broad protocol.
Nick: Physician advocacy is important as we continue to work closely with dialysis organizations to operationalize protocols.
Nick: Reimbursement trends remain encouraging as we previously discussed we have been initially focused on the access for Medicare fee for service patients within that stood out for reimbursement system.
Nick: We also indicated that we expected Medicare advantage coverage, where dialysis organizations had contracted with Medicare advantage plans for each at Apple like our innovation payment.
Nick: We continue to see reimbursement outside of Medicare fee for service. We believe that this is a signal that even early in the launch prescribers want to use <unk> for patients regardless of the health plan the patient is on.
Nick: And at some Medicare advantage plans are also ready to cover vascular.
Nick: The launch is proceeding as we planned demand continues to grow and we are establishing a strong foundation for perhaps you.
Nick: Our team is highly focused on continuing to increase breadth and depth of prescribing of current customers unlocking new customers and supporting the largest dialysis organizations and protocol activation.
Eric: Now I'll turn it over to Eric.
Eric: Thanks, Nick as mentioned, we're very pleased with the initial quarter of vascular sales, which along with solid Q1 Auryxia sales performance drove strong Q1 results I will now provide an overview of those results.
Eric: Total revenues, which are comprised primarily of net product revenues and also include licensing collaboration revenue increased $57 $3 million in Q1 of this year as compared to $32 $6 million in Q1 of last year.
Eric: Of these amounts net product revenues increased to $55 8 million in Q1 of this year as compared to $31 million.
Eric: In Q1 of last year, driven by the introduction of that view of this quarter, which generated $12 million of net revenues as well as by an increase in <unk> net product revenues, which were $43 $8 million in Q1 of this year as compared to $31 million in Q1 of last year. As a reminder, auryxia lost IP exclusivity in March and an authorized generic.
Eric: Eric for Auryxia has now entered the market. There are no. Other generics have been approved nor entered the market. At this time. We are pleased with this quarter's strong Auryxia result, though caution future auryxia sales levels are challenging to predict due to the uncertainty around the timing of potential additional generic competition.
Eric: Cost of goods sold of $7 $6 million in Q1 of this year is lower as compared to $11 6 million in Q1 of last year, even with higher sales levels in this year's quarter a driver of this lower level of causes that we were that we are no longer recording a $9 million quarterly noncash amortization charge related to the acquired developed product right.
Eric: <unk>, which was fully amortized as at the end of last year.
Eric: Note that <unk> sales were derived from prelaunch inventory, which does not include the full cost of manufacturing as a portion of those inventory related costs were previously expense prior to that to your FDA approval also.
Eric: Also during Q1 of last year, we realized $3 $7 million benefit due to our ability to sell inventory previously written down as excess inventory.
Eric: On the topic of inventory as it relates to tariffs I want to highlight that we have at least 12 months as <unk> inventory on hand in the U S and do not expect any meaningful tariff related impact on <unk> or auryxia. At this time, we will continue to monitor developments in this area and work to be ready to react to potential scenarios that could.
Eric: Play out.
Eric: R&D expenses of $9 8 million and SG&A expenses of $25 7 million in Q1 of this year were essentially flat as compared to Q1 of last year.
Eric: Turning to the bottom line, we generated net income of $6 $1 million in Q1 of this year as compared to a net loss of $18 million in Q1 of last year. This.
Eric: This quarter's net income was driven by an increase in net product revenues, which was partially offset by $5 4 million interest expense related to the settlement royalty liability in connection with the July 2024, equal or termination and settlement agreement.
Eric: We ended Q1 with $113 $4 million in cash and cash equivalents during the quarter and bolstered our cash position via an underwritten public offering completed in March which raised over $46 million of net proceeds and accordingly also serve to expand institutional investor support.
Eric: We believe we are financed to achieve profitability based on our current operating plan, which includes pursuing label expansion for <unk>.
Eric: And advancing our other programs.
Eric: In closing, we exited Q1 with strong initial that their launch solid financial position and an overall positive business momentum.
Eric: That said our work is not done and we will continue to diligently work to execute on our business plan.
Eric: That we welcome.
Eric: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby will be compiled.
Andy Roster: Andy roster.
Eric: Okay.
Speaker Change: Your first question comes from the line of <unk> from Leerink Partners. Your line is now open.
Speaker Change: Hey, good morning, everyone.
Speaker Change: So a couple from me for Vaxjo could you update us about your expected timeline for adding it to protocols and implementing them at the large dialysis organizations.
Speaker Change: Since it sounds like most of that growth has been driven by mid and small sized ones right now.
Speaker Change: And when the Ldls do order and use <unk>, how do you expect that to increase the prescribing rates or other launch metrics over time.
Speaker Change: Great. Thanks, so much for the question so the timelines for the <unk>.
Speaker Change: And I'm going to ask Nick to give more more detail but.
Speaker Change: And the first as I mentioned, they're starting in.
Speaker Change: Large.
Speaker Change: Highlight to operationalize their protocols their protocols written.
Speaker Change: But they need to ensure that because they are so large that they can operationalize it across the across the system without issues and patients can continue to get drug remember theyre going to be shipping drug to patients homes. So it's a different mechanism for treating anemia.
Speaker Change: So it looks like Nick talk more about that pilot because it really really excited that that's.
Speaker Change: Moving forward, yes, so this pilot.
Speaker Change: A large operational pilot and again to reiterate this is not seeking efficacy data is to make sure patients can get their initial fill the systems work to make sure they're getting formulary access they can get refilled data and typically these pilots can be between 50 and 200 sites you're talking about a pilot of 200 sites.
Speaker Change: Then most dialysis organizations.
Speaker Change: We have a number of physicians that have raised their hands to be on that pilot.
Speaker Change: And we've heard back that many of our cameras. So we interact with have already heard that that will be part of that pilot. So this thing is the train is enrolling on this thing and typically how these pilot work as they roll it out through training their staff and so they'll probably spend a month or so training their staff on what to expect as John mentioned, it's a little bit different way of treating anemia and so.
Speaker Change: We want to make sure the staff as well trained.
Speaker Change: Then they will enroll the sites they'll spend one to three months probably in the pilot more like probably two to three months then one because they want to make patients make sure patients get a refill and once they check the box that all the systems are working and everything is connected theyre going to roll it out more broadly.
Speaker Change: So when we think about that pilot in the third quarter broader rollout in the fourth quarter.
Speaker Change: Alright.
Speaker Change: Sure.
Speaker Change: And as we said I mean that really.
Speaker Change: Kind of doubles, the number of patients who can access the product once that one.
Speaker Change: <unk> goes and Tim.
Speaker Change: When you think about how physicians will prescribe the folks at at U S. Renal the physicians who are writing now what was the number next up something over 50%.
Speaker Change: <unk>, 50% also have patients at one of our large providers so you've already got.
Speaker Change: Physicians, who are used to writing the product and want to ride the product right the product.
Speaker Change: So we think and frankly a lot of those are the ones who are raising their hands to be a part of the pilot.
Speaker Change: They will start increasing their prescribing.
Speaker Change: Quickly.
Speaker Change: Now the second the second LTI was earlier in their process.
Speaker Change: We are working with them to share data et cetera, as I said in my remarks.
Speaker Change: I'm very encouraged that they've ordered product and they are allowing physicians on an exception basis to get the product right. That's why we wanted to make sure we have that contract in place with them.
Speaker Change: But we clearly see that theyre going to take longer before you get broad use from them, but of course, we're doing all that we can.
Speaker Change: To move that as quickly as we can.
Speaker Change: But the idea that as you think about Q2 Q2 will clearly still be driven by the small and medium providers.
Speaker Change: 150000 patients at the small and medium providers lots of room.
Speaker Change: To grow when you think about the number of patients we have on today.
Speaker Change: At the end of the third quarter, sorry, the end of the first quarter something just over 5000 patients.
Speaker Change: I think that in the context of 150000 available patients there's lots of room to grow at the small and medium providers, but we're incredibly excited to get the large provider the first large provider up and running.
Speaker Change: Because I think that's that.
Speaker Change: The step function that comes into into growth.
Speaker Change: Got it that's really helpful and quick follow up for me. It sounds also like the average prescriptions for <unk> is increasing at a nice rate.
Speaker Change: How do you expect that to keep going or ramping into Q2 based on some of the metrics you saw exiting first quarter.
Speaker Change: So clearly some of the increase in breakfast <unk>.
Speaker Change: Patients are staying on and Thats a really good thing.
Nick: I'll, let Nick comment.
Nick: Yes, I talked in my comments about we're seeing some physicians moving towards we'll call. It standard utilization, where they are using in a broad set of patients that being said the range of utilization is still really really broad we have a number of prescribers that are still only in the.
Nick: The early trial stage with one or two prescriptions for patients and so certainly there is a ton of growth still within the prescribing base as those physicians become comfortable with vaxjo and rollout to broader patients.
Nick: And then we have all of the physicians, who have yet to prescribe at some of the medium and smaller dialysis organizations that are poised to protocols are in place. They are operationalized those protocols and certainly we expect the prescriber base to continue to expand and thus adding to the number of prescriptions per provider yes.
Nick: As you know the interesting thing about dialysis as you normally think about a launch and you have your early adopters, who can start writing the drug and then you kind of March through and what you have to do in dialysis as you add that layer of AV access at the dialysis providers. So you've got folks who are early adopters at davita or Fresenius.
Nick: Who just can't access the product yet.
Nick: Those are the people that were using truly to advocate for that broadened access to accelerate that and I think thats paid off in.
Nick: The speed with which the first LDL is moving towards.
Nick: Towards their large scale pilot, but it does create that.
Nick: <unk> <unk>.
Nick: Level of complexity.
Nick: That you've got a you've got to go through that and as Nick said most of our prescriptions are coming from U S renal, but we've had orders from the other mid sized providers.
Nick: But theyre just at the early stages so.
Nick: We're really excited about what they can yield in Q2 and Q3 and beyond.
Nick: Got it thanks very much.
Nick: Thank you.
Speaker Change: Thank you and your next question comes from the line of Julian Harrison from BPI <unk>. Your line is now open.
Speaker Change: Hi, Congrats on all the progress this is ray on for Julien. Thanks for taking our question just one for us.
Speaker Change: Has there been any material shift from our ixia prescriptions to the currently authorized generic.
Speaker Change: Just curious how we should be thinking about generic penetration going forward.
Speaker Change: Thanks, so much for the question.
Speaker Change: So as you know.
Speaker Change: The authorized generic.
Speaker Change: Only entered the market post March 20th right. So in the quarter. It was it was very very little and we know exactly how much prada.
Speaker Change: Product went into the market and how much.
Speaker Change: The AG will receive over the course of the year. So we know certainly the first quarter, that's minimal and it won't be a large percentage of the business even in in Q2.
Speaker Change: The real question will be.
Speaker Change: The next the first file or getting approved and.
Speaker Change: We've always been as we've said in the past been very cautious.
Speaker Change: As you know the way the dynamic works you have the Agm's out the first filer has six months of exclusivity.
Speaker Change: Well and during that time, we think we can maintain a significant amount of Av.
Speaker Change: Revenue, we have the right to match prices within our contracts because having you would see in the bundle as James.
Speaker Change: But without a.
Speaker Change: And then the approval from the FDA.
Speaker Change: There's a great opportunity for us we just have no idea how long that's going to last but every day that it does where we are on on may 8th and.
Speaker Change: And again.
Speaker Change: March 20th was the first day that that our contracts suggested they.
Speaker Change: And then to file or a generic could enter the market and no. One has been approved yet so.
Speaker Change: We're enjoying.
Speaker Change: That that situation and we have the product and we'll be able to service the market for as long as that.
Speaker Change: Lasts.
Speaker Change: I just can't give you guidance on when a when a generic might be approved.
Speaker Change: We're hoping it takes a while.
Speaker Change: Okay got it thanks sure.
Speaker Change: Thank you. Please standby for your next question.
Speaker Change: And our next question is from the line of Roger song from Jefferies. Your line is open.
Speaker Change: Excellent.
Roger Song: Thanks for taking our question.
Speaker Change: For the update.
Speaker Change: A question related to that net price given right now.
Speaker Change: Focusing on the mid to small to mid Dallas provider and how this will change over time when you get.
Speaker Change: While patient launched.
Speaker Change: Thank you.
Speaker Change: Yeah no. Thanks, Roger for the question and good to have you on the call. So.
Speaker Change: As it comes to net price.
Speaker Change: This is a very competitive environment that we are selling vaxjo in.
Speaker Change: So we are obviously incredibly careful about what we what we talk about a couple of things just to remind you.
Speaker Change: The way the contracts are structured is it's an off invoice and then and then a rebate but of course, the net debt that Eric.
Speaker Change: Ascribed.
Speaker Change: <unk> that the discount for that rebate.
Speaker Change: Although it won't be paid until sometime in the future.
Speaker Change: But what we've also said is over time, we expect the net price per patient to decrease as volumes increase but what you really see as you think about the dynamic of.
Speaker Change: The.
Speaker Change: Mid sized providers coming in you just see lumpiness in the net price over over some period of time.
Speaker Change: I will say you have the net.
Speaker Change: Our net revenue you have.
Speaker Change: Our number of prescribers.
Speaker Change: Prescriptions per prescriber, I think you can get or you can get pretty close to our net price per prescription.
Speaker Change: In with the data that we've given you.
Speaker Change: Great that's helpful and then.
Speaker Change: I think you provided.
Speaker Change: The new scripts versus repeat scripts at the Windsor to service.
Speaker Change: And then how should we think about over time this will change, particularly when you have the.
Speaker Change: The launch.
Speaker Change: Basically you have the broader rollout for them for the prescription. Thank you.
Speaker Change: Great question, Nick do you want to take that one yes.
Nick: Early in the launch obviously most of our prescriptions are new patients as those are coming on and those patients over time, we'll continue to get refill rates I wish compliance in dialysis, where a little bit better, but youll have an average compliance rate through market research at about 65% ish range.
Nick: So you can expect those refills will grow as a percentage of total prescriptions, but again lumpiness will exist right. So that lumpiness as new providers come on in for example in <unk> in the second half all of those could be new prescribers for new patients.
Nick: And so when we think about that that Lumpiness will play out in the second half as well the important thing about the refill is to get the dose right alright, when we think about dose titration in our clinical trials. We saw that the starting dose was obviously 300 milligrams and that the average dose once folks are fully titrated was about 50% above that number.
Nick: So when you think about refills, it's really important to default pull in that dose increases and we're seeing that in those prescriptions that are refills.
Nick: Yes, that's a very very important point I mean that is going to be.
Nick: A little bit of a moving target as as patients come on but.
Nick: That ultimately.
Nick: Most prescriptions are going to be closer to I think the average was 430 milligrams and innovate but.
Nick: So that's probably where it.
Nick: Will land us somewhere.
Nick: In real life, it's usually a little bit lower than that but when you think about that from a from a revenue perspective, you do have to factor that in.
Nick: So we've talked about that $15500.
Nick: Yes.
Nick: Slack.
Nick: That's at 300 milligrams. So once you start adding that that increase in dose.
Nick: Thinking about that ratio between new and existing.
Nick: Youre going to see that that that WAC price at gross price increase.
Nick: To some extent and I think as physicians become more comfortable with where.
Nick: Patient is going to land and they understand the focused data for the three times weekly dosing in the modify data they may even be starting more patients at higher doses. So we'll keep updating you on that but that will that will take some time for it to develop.
Speaker Change: Great maybe just one last one quick one in terms of the Sdd trial, given all the changes happening on the background at the FDA side, how confident you are.
Speaker Change: And now given that the trial design you had been guiding all confident and you can now start the trial in second half with the design you proposed thank you James.
Speaker Change: It's a great question.
Speaker Change: There are clearly things happening at the FDA and remember we are.
Speaker Change: Sure.
Speaker Change: Regulated by Peter not seeber so.
Speaker Change: What we've had at.
Speaker Change: A change in the.
Speaker Change: The division director for non malignant hematology that happen some a few months ago.
Speaker Change: We know the division director, who is there now the interim.
Speaker Change: We think she is great.
Speaker Change: Great we've been through.
Speaker Change: We're active with her on a number of occasions and found a very pragmatic.
Speaker Change: We haven't seen any other changes at this point to our our review team. So we don't have any reason to believe.
Speaker Change: We can't do that and we are doing a lot of work to initiate this trial.
Speaker Change: I'll call it at risk.
Speaker Change: Because we want to be ready to start dosing patients before the end of the year again, a lot of the comments that were expecting in the discussion will be around the statistical analysis plan and how we're handling that versus.
Speaker Change: Some of the more operational aspects of the trial. So we think we can do that with very little risk. So we still feel we're on target if that changes obviously as appropriate we're going to we're going to update you but.
Speaker Change: We're still working towards that end of year timeline.
Speaker Change: Thanks for the comments thank you.
Roger Song: Thanks Roger.
Speaker Change: Once again to ask a question you May press star one on your telephone keypad.
Speaker Change: Your next question is from the line of Allison <unk> from Piper Sandler Your line is now open.
Speaker Change: Hey, good morning, Thanks for taking the questions a couple from me first.
Speaker Change: Just bigger picture could you talk about what's driving demand so far for <unk> clinical profile versus.
Speaker Change: Economic incentives created by that.
Speaker Change: And then second just a question on <unk> reimbursement trends.
Speaker Change: Any detail on what Youre seeing in terms of coverage at Medicare advantage plans are.
Speaker Change: Are you seeing innovation payments or just what does that look like.
Speaker Change: Any color or detail there would be helpful. Thank you.
Speaker Change: I'm going to I'm going to let Nick answer most of it from a demand perspective, I think just a broad statement is we're seeing most of the sales today at U S renal and.
Speaker Change: And whether it's at U S renal or the other dialysis providers, it's fundamentally driven by a belief in the in the hip the opportunities that <unk> product can give to patients.
Speaker Change: The economic side is enabling it allows the access.
Speaker Change: Great when the business side of the dialysis provider is happy to see the product be used but it's being driven some like Geoff block who is the principal investigator on the voice trial.
Speaker Change: And.
Speaker Change: Senior personnel at U S renal on the medical side I mean, he is talking to.
Speaker Change: Everyone every physician because he is a believer and that kind of advocacy.
Speaker Change: We're seeing that at other dialysis providers the.
Speaker Change: The smaller providers as well.
Speaker Change: But I probably answered too much of it for an example, there.
Speaker Change: There, but it is if they don't believe in the clinical advantages the economic doesn't hold it might help you for a couple of years right, but we're in this to make the standard of care and they have to believe in the clinical benefit.
Speaker Change: And I can always talk more about that.
Speaker Change: Really I went through kind of the antidote anecdotal feedback we're hearing from physicians.
Speaker Change: At the end to summarize they are finding value in the product right and you can see that in a couple of different ways one.
Speaker Change: If they didn't find value of patients might be one and done right. They get a bad experience. They move them off of therapy wouldn't see a refill refills are tracking exactly as we thought they would and so that's one indication of the clinical profile to their continuing to broaden into other patients if they werent seeing value in their initial patients. They put on they wouldn't have expanded their prescribing.
Speaker Change: And so that initial value.
Speaker Change: Still early in the launch, but it gives us that confidence that folks are seeing in the clinical value and broaden their use.
Speaker Change: Of course <unk>.
Speaker Change: Nobody does anything if they lose money on it.
Speaker Change: And so there is an economic value there as well and so that's underpinning it but without the clinical foundation the economics doesn't matter if the product doesn't work.
Speaker Change: I mean, it would be for a short period of time, but it's not sustainable.
Speaker Change: That's not what we're seeing here exactly the second part of your question was reimbursement.
Speaker Change: We've seen a number of Medicare advantage plans, frankly, theres been broad trial across a number of health plans. So you see folks when they want to put a patient on that will do a trial balloon prescription to make sure. It gets covered and reimbursed and then they'll go broader there are a number of Medicare advantage plans that are seeing that broadened.
Speaker Change: King of prescribing in other words, they're covering it.
Speaker Change: The <unk> organization has seen that theyre, covering and they're expanding and so right now we're seeing roughly an 80 20 between fee for service and other plans.
Speaker Change: And so as that evolves.
Speaker Change: Over time, we expect it to expand obviously also the larger dialysis organizations have more negotiating leverage with the Medicare advantage plans. So as they begin their pilot in the second half of the year and then they fully operationalized in the fourth quarter that may shift favorably towards the end of year.
Speaker Change: And to be clear that 80 20 split is.
Speaker Change: Better than what we had planned or expected. So we're encouraged by that.
Speaker Change: Some of it is early.
Speaker Change: Trial balloon kind of prescriptions, but.
Speaker Change: We haven't heard of pushback, yet so thats encouraging.
Speaker Change: Ali.
Speaker Change: Please standby for your next question.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Your next question is from Les Sulewski from <unk> Securities. Your line is open.
Speaker Change: Good morning, Thank you for taking my questions and congrats on the progress just first on the inventory stocking trends, perhaps maybe just comment on that I know you put out there.
Speaker Change: But potential weak out there but.
Speaker Change: As far as the ldls come on do you expect the bolus for the inventory stocking to increase.
Speaker Change: When they first.
Speaker Change: Onboard and then maybe just provided an hour.
Speaker Change: I'll highlight an overview of the market landscape for the label expansion opportunities. Thank you.
Speaker Change: Nick one in Italy.
Speaker Change: So when we think of inventory, we talked about kind of a week higher at the end of the quarter versus when we were talking to you guys back in February still four weeks of inventories within the normal range of two to four weeks.
Speaker Change: <unk> continues to grow with patient populations for four weeks on a forward looking where theres growth expected in that next quarter is an unusual for the product.
Speaker Change: We felt it was important to kind of highlighted as we did obviously beat.
Speaker Change: Beat the original guidance that we propose but we wanted to give you some flavor there still all within kind of a normal ranges.
Speaker Change: When we think about as futures come on what will happen and lets just use the LDL that's going to start their large pilot is they'll stock for the pilot and that pilot is in broad utilization, but as they see that demand and see how physicians want to utilize the product that will give them a good insight as to what that stock level needs to be when they brought in and out so.
Speaker Change: I don't expect it to be shy and stocking and then kind of waiting around to see if the demand comes I think they'll put some put some stock in to make sure. They have the appropriate level then they'll see some.
Speaker Change: Man and then they'll Gail to gauge so they can kind of a range accurately project the range between two and four weeks.
Speaker Change: Usage now that being said the distribution network for these ldls is efficient we.
Speaker Change: We spent a lot of time working on the distribution network in quarter four to allow for prescriber prescriptions to get to the patient's home.
Speaker Change: With some efficiency and we've seen that play out.
Speaker Change: Throughout the late part of Q1 that these these prescriptions should be able to reach the patients' homes quickly and we can restock them very quickly. So we don't anticipate even if they carry minimal inventory or under call the inventory to have any issues at all.
Speaker Change: I think focusing on that.
Speaker Change: The prescriptions in the prescriber demand.
Speaker Change: Gives you that underlying sense of that.
Speaker Change: The demand for the product and the excitement about the product inventory is just going to follow demand and a really tight.
Speaker Change: Highway it's not like we're shipping thousands of bottles to retail pharmacies and you don't know what happens to them exactly what's happening with all of these here.
Speaker Change: Thanks, Nik so less your other question was around label expansion in NPD and I appreciate the opportunity to reiterate that.
Speaker Change: Excitement about that market for us and our desire and such as our desire to get to that market I mean again.
Speaker Change: I say it every time I think every time I come out in the field meeting physicians.
Speaker Change: Virtually they will tell me that they want to use this product in their non dialysis patient population. So the demand is there.
Speaker Change: That's an important and a wonderful place to start and the market is there as well so the patient population or is just look at stage four and stage five non dialysis patients who are anemic.
Speaker Change: Roughly the same size as the dialysis market, it's about 550000.
Speaker Change: Patients.
Speaker Change: These are all patients who have.
Speaker Change: At 15500 would be the starting price for non dialysis as well and but the average dose there is a little lower than dialysis about 400 milligrams from our protect study, but that would be something around $20000 on a wack basis.
Speaker Change: Discount the kind of normal gross to net discounts.
Speaker Change: Discount for compliance you're still north of $10000 per patient per year, which is four X the price that you'd see in in dialysis. So.
Speaker Change: Half a million patient population times 10000 gives you the sense of how significant from a financial standpoint that non dialysis market is and again, we're the only oral product looking to bring a product into that space. So it.
Speaker Change: Very helpful. Thank you.
Speaker Change: I'm showing no further questions at this time I would now like to turn it back to Mr. John Butler for closing remarks. Thank you so much operator, and thanks, everyone for your questions and your time. This morning, hopefully, we effectively conveyed our enthusiasm about the progressive.
Speaker Change: In the coming months. Thank you very much have a great day.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect have a great day.
Speaker Change: Goodbye.