Q2 2025 Kiniksa Pharmaceuticals International PLC Earnings Call
Operator: Now I'd like to introduce your host for today's program, Jonathan Kirshenbaum, Investor Relations. Please go ahead, sir.
After the speaker's presentation, there will be a question and answer session to ask a question. During this session newly depressed star one on your telephone. If your question has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded.
Now I'd like to introduce your host for today's program, Jonathan cushion bump Investor Relations. Please go ahead Sir.
Thank you operator, good morning, everyone and thank you for joining this call to discuss our second quarter 2025 financial results and recent portfolio execution.
Jonathan Kirshenbaum: Thank you, operator. Good morning, everyone, and thank you for joining Kiniksa's call to discuss our Q2 2025 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. As to the agenda for today's call, our Chief Executive Officer, Sanj K. Patel, will start with an introduction and overview of our business. Ross Moat, Kiniksa's Chief Commercial Officer, will provide an update on ARCALYST commercial execution. Mark Ragosa, our Chief Financial Officer, will review our Q2 2025 financial results. Finally, Sanj will share closing remarks and kick off the Q&A session, for which John F. Paolini, our Chief Medical Officer, and Eben Tessari, our Chief Operating Officer, will also be on the line.
A press release highlighting these results can be found on our website under the investors section.
As the agenda for today's call are Chief Executive Officer, <unk> Patel will start with an introduction and overview of our business Ross moat connectors, Chief commercial officer, who will provide an update on <unk> commercial execution, then Mark <unk>, Our Chief Financial Officer will review, our second quarter two.
195 financial results.
Finally, <unk> share closing remarks, and kick off the Q&A session for which John <unk>, Our Chief Medical Officer, and Evan Sorry, Our Chief operating Officer will also be on the line.
Before getting started please note that we will be making forward looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements.
Jonathan Kirshenbaum: Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide, as well as under the caption "Risk Factors" contained in our SEC filings. These statements speak only as the date of this presentation, and we undertake no obligation to update such statements except as required by law. With that, I will turn it over to Sanj.
A review of such statements and risk factors can be found on this slide as well as under the caption risk factors contained in our SEC filings. These statements speak only as the date of this presentation and we undertake no obligation to update such statements except as required by law.
With that I will turn it over to Stan.
Thanks, Jonathan Good morning, everyone I'm happy to review <unk> second quarter financial results and the highlights across our portfolio.
Sanj K. Patel: Thanks, Jonathan. Good morning, everyone. I'm happy to review Kiniksa's Q2 financial results and the highlights across our portfolio. Kiniksa continues to build upon the strength across our business, which is driven by both our commercial execution with ARCALYST and our pipeline development programs, including KPL-387. ARCALYST continues to generate strong revenue growth. Our continued execution across key commercial drivers and increased penetration across the recurrent pericarditis population led to a net revenue of $156.8 million in Q2. This represents a growth of $19 million over Q1. In just over 4 years since the launch of ARCALYST as the first and only FDA-approved therapy for recurrent pericarditis, Kiniksa has generated over $1 billion in cumulative net sales.
<unk> continues to build upon the strength across our business, which is driven by both our commercial execution monopolies.
Our pipeline development programs, including <unk> 387.
<unk> continues to generate strong revenue growth.
Our continued execution across key commercial drivers and increased penetration across the recurrent pericarditis population led to a net revenue of $156 8 million in the second quarter.
This represents a growth of $19 million over the first quarter.
In just over four years since the launch of Barclays as the first and only FDA approved therapy for recurrent pericarditis.
<unk> has generated over $1 billion.
In cumulative net sales.
Surpassing this milestone is a result of our effective commercial strategy and our team who work relentlessly to bring a highly efficacious therapy to thousands of patients suffering from this debilitating disease.
Sanj K. Patel: Surpassing this milestone is a result of our effective commercial strategy and our team, who work relentlessly to bring this highly efficacious therapy to thousands of patients suffering from this debilitating disease. Kiniksa is well-positioned to continue maximizing the potential of ARCALYST. For full year 2025, we're raising our ARCALYST net sales guidance to between $625 million and $640 million from $590 million to $605 million. Importantly, growing ARCALYST revenue continues to support our robust balance sheet, providing capacity for continued investment in value-creating opportunities across the business without the need to access the capital markets. Turning to our pipeline, we've now initiated and have begun recruiting in the phase II/phase III clinical trial of KPL-387 in recurrent pericarditis. This next slide highlights the design of the phase II/phase III clinical trial.
Yeah.
<unk> is well positioned to continue maximizing the potential of archivist.
For full year 2025, we're raising our <unk> net sales guidance to between 625 and $614 million from $590 million to $605 million.
Importantly, growing <unk> revenue continues to support our robust balance sheet, providing capacity for continued investment in value, creating opportunities across the business without the need to access the capital markets.
Turning to our pipeline, we've now initiated and have begun recruiting in the phase II slash phase III clinical trial of <unk>, seven and recurrent pericarditis.
This next slide highlights the design of the phase II phase III clinical trial.
In designing this study.
Sanj K. Patel: In designing this study, we've leveraged our experience with RHAPSODY, which was the successful phase III pivotal trial supporting FDA approval of ARCALYST in recurrent pericarditis. This study consists of three overlapping parts which have been combined into a single protocol. The phase II dose-focusing portion, the phase III double-blind, placebo-controlled pivotal portion, and the long-term extensions. We're now recruiting patients in the dose-focusing portion of the study and expect data in H2 2024. From there, we'll continue to move as fast as possible, and our goal is to deliver this treatment option to patients in the 2028, 2029 timeframe. Thanks to the excellent work of our teams, Kiniksa is the leader in recurrent pericarditis. Importantly, we are committed to driving additional innovation for these patients and maintaining our leadership position.
We've leveraged our experience with Rhapsody, which was the successful phase III pivotal trial supporting FDA approval of <unk>.
Barclays and recurrent pericarditis.
This study consists of three overlapping parts, which have been combined into a single protocol.
The phase II dose focusing portion.
The phase III double blind placebo controlled pivotal portion.
In the long term extensions.
We're now recruiting patients in the dose focusing portion of the study and expect data in the second half of next year.
From that we will continue to move as fast as possible.
Our goal is to deliver this treatment option to patients in the 'twenty eight 'twenty nine timeframe.
Thanks to the excellent work of our teams <unk> is the leader in recurrent pericarditis.
Importantly, we are committed to driving additional innovation for these patients and maintaining our leadership position.
Our physician and patient market research shows an IL, one alpha and beta inhibitor with the target profile of <unk> seven could be a meaningful treatment option for patients with recurrent pericarditis.
Sanj K. Patel: Our physician and patient market research shows an IL-1 alpha and beta inhibitor with the target profile of KPL-387 could be a meaningful treatment option for patients with recurrent pericarditis. Specifically, the potential for a once-monthly dosing of a liquid formulation in an auto-injector could drive further adoption as well as potentially enhance both duration and compliance. We continue to make solid progress in the Q2, both commercially and clinically, and we continue to crack on across the portfolio. With that, I'll turn it over to Ross.
Specifically the potential for a once monthly dosing of the liquid formulation in an auto injector could drive further adoption as well as potentially enhance both duration and compliance.
We continue to make solid progress in the second quarter, both commercially and clinically and we continue to crack on across the portfolio.
With that I'll turn it over to us.
Thank you Scott.
Strong execution in Q2 led to significant revenue growth to $156 8 million.
Ross Moat: Thank you, Sanj. Strong execution in Q2 led to significant revenue growth to $156.8 million, representing a 52% year-over-year increase compared to Q2 of last year. This performance was driven by expansion in both the breadth and depth of the prescriber base, which led to the highest number of quarterly new patient enrollments since launch and resulted in a substantial increase to our active commercial patients. We've seen good persistence from the Medicare Part D patients who transitioned to commercial therapy at the start of the year due to the affordability changes associated with the Inflation Reduction Act. We are seeing this patient cohort follow similar metrics to other groups of patients on ARCALYST. While the one-time bolus of patients observed in Q1 will not repeat, we have seen an increase in new Medicare Part D patients initiating commercial therapy versus the previous years.
It represented a 52% year over year increase compared to Q2 of last year.
This performance was driven by expansion in both the breadth and depth of the prescriber base, which led to the highest number of quarterly new patient enrollments since launch.
And resulted in a substantial increase to our active commercial patients.
Additionally, we've seen good persistence from the Medicare part D patients, who transitioned to commercial therapy at the start of the year due to the affordability changes associated with the inflation reduction.
We are seeing this patient cohort follow similar metrics to other groups of patients on our class a while the onetime bolus of patients observed in Q1 will not repeat we have seen an increase in new Medicare part D patients initiated commercial therapy versus the previous years.
As a result of the increase in active patients our penetration into the multiple recurrent population increased from approximately 13% at the end of last year to approximately 15% at the end of Q2.
Ross Moat: As a result of the increase in active patients, our penetration into the multiple recurrence population increased from approximately 13% at the end of last year to approximately 15% at the end of Q2. Ultimately, this growth reflects that patients and healthcare professionals continue to report high degrees of satisfaction with ARCALYST, and we've built a robust foundation of commercial fundamentals. For example, in Q2, our payer approval rates remained greater than 90%. Total duration of therapy was approximately 30 months on average. Patient compliance with therapy remained strong at over 85%, and we continue to see ARCALYST used earlier in the course of the disease. Importantly, our strong Q2 performance highlights the progress we've made, but more importantly, we continue to be even more excited about the significant opportunity ahead with ARCALYST.
Ultimately this growth reflects the patients and health care professionals continue to report high degrees of satisfaction with August and we've built a robust foundation of commercial fundamentals for example in Q2, our payer approval rates remained greater than 90% total duration of <unk>.
<unk> was approximately 30 months on average patient compliance with therapy remains strong at over 85% and we continue to see our finished used earlier in the course of the disease.
Importantly, our strong Q2 performance highlights the progress we've made but more importantly, we continue to be even more excited about the significant opportunity ahead with oculus.
On this slide I'm going to highlight how our places continue to shift the treatment paradigm to become the standard of care for recurrent pericarditis.
Ross Moat: On this slide, I'm going to highlight how ARCALYST has continued to shift the treatment paradigm to become the standard of care for recurrent pericarditis. Our promotional efforts have been focused on educating patients and healthcare professionals to recognize recurrent pericarditis as an interleukin-1 alpha and beta-mediated disease best managed with targeted immunomodulation. Since launch, we've seen continuous, robust increases in both the new and repeat prescribers every single quarter. This growth not only speaks to the effectiveness of our educational efforts, but it also illustrates how receptive physicians have been to this evolved paradigm that utilizes a targeted, highly efficacious, and well-tolerated treatment. In Q2, more than 325 additional healthcare professionals wrote their first ARCALYST prescription, representing one of the highest quarter-on-quarter increases to date and bringing the total number of prescribers to more than 3,475.
Our promotional efforts have been focused on educating patients and health care professionals to recognize recurrent pericarditis as an interleukin one alpha and beta mediated disease best managed with targeted immuno modulation.
Since launch we've seen continuous robust increases in both the new and repeat prescribers every single quarter.
This growth not only speaks to the effectiveness of our educational efforts, but it also illustrates how receptive physicians have been to this evolved paradigm that utilizes a targeted highly efficacious and well tolerated treatments.
In Q2 more than 325 additional health care professionals votes that first of all <unk> prescriptions representing.
Representing one of the highest quarter over quarter increases to date and bringing the total number of prescribers to more than 3475.
Additionally, repeat prescriber and also continue to increase with more than 120, <unk> prescribers, writing for the second patients.
Ross Moat: Repeat prescribing also continued to increase, with more than 120 ARCALYST prescribers writing for their second patients. We've also seen an increase in prescribing earlier in the disease. Of all the patients on ARCALYST, around 20% were prescribed ARCALYST while on their first recurrence, and roughly 80% when they had two or more recurrences. This highlights the growing physician appreciation for the value ARCALYST provides in preventing their patients from suffering future flares. In addition to more patients receiving ARCALYST at every stage of the disease, there has been a marked increase in the number of dedicated pericardial disease centers where patients are able to access expert care for healthcare providers well-versed in their disease. We have sponsored the AHA's Addressing Recurrent Pericarditis initiative as part of our ongoing efforts to shorten the treatment journey for patients by providing expert care close to home.
Finally, we've also seen an increase in prescribing earlier in the disease.
Of all the patients on our list around 20% will prescribed artless, while on that first recurrence of roughly 80% when they had two or more occurrences.
This highlights the growing physician appreciation for the value <unk> provides and prevention that patients from suffering feature for us.
In.
<unk> to more patients receive an off list at every stage of the disease that has been a marked increase in the number of dedicated pericardial disease centers, where patients are able to access export cat for health care providers, well versed in that disease.
We have sponsored the iha's addressing recurrent pericarditis initiative as part of our ongoing efforts to shorten the treatment journey for patients by providing extra cash flows.
There are also several more dedicated pericardial clinics outside of this initiative and our aim is to continue supporting this growth to help patients gain and earlier diagnosis and appropriate treatment of that disease.
Ross Moat: There are also several more dedicated pericardial clinics outside of this initiative, and our aim is to continue supporting this growth to help patients gain an earlier diagnosis and appropriate treatment of their disease. As the treatment approach continues to change across the country, there is a growing body of published literature recommending IL-1 pathway inhibitors such as ARCALYST to be used ahead of corticosteroids, which is well-aligned with our commercial positioning of ARCALYST. Furthermore, looking at data from RESONANCE, our real-world evidence disease registry, which is driven by expert pericardial centers across the country, ARCALYST has increasingly become the second-line treatment choice after NSAIDs and colchicine. In Q2, we delivered $156.8 million in net revenue, as well as increased the franchise profitability.
As the treatment approach continues to change across the country. There is a growing body of published literature recommended IL <unk> pathway inhibitors, such as office to be used ahead of corticosteroids, which is well aligned with our commercial positioning of August.
Furthermore, looking at data from residents our real world evidence disease registry, which is driven by expert pericardial centers across the country. All finished has increasingly become the second line treatment choice after end sips and coaches.
In Q2, we delivered $156.8 million in net revenue as well as increase the franchise profitability.
As a result, we are pleased to increase our 2025 net revenue guidance by $35 million between the mid points of the prior range and of the new range. This takes us from expecting between $590 to $605 million.
Ross Moat: As a result, we are pleased to increase our 2025 net revenue guidance by $35 million between the midpoints of the prior range and of the new range. This takes us from expecting between $590 to $605 million to now expecting between $625 and $640 million. This guidance indicates year-on-year net revenue growth of $215 million at the midpoint compared to full year 2024. This would be the highest annual increase in net revenue to date. As you can hear, we're excited about the future of ARCALYST as well as the progress of our pipeline. We are determined to bring future launches of novel therapies to patients who are suffering from debilitating diseases. With that, I'll turn the call over to Mark to discuss our financial results. Mark?
So now expecting between 625 and $640 million.
This guidance indicates year on year net revenue growth of $215 million at the midpoint compared to full year 2024.
This would be the highest annual increase in net revenue to date.
As you can hear we are excited about the future of <unk> as well as the progress of our pipeline.
We are determined to bring future launches of novel therapies to patients who are suffering from debilitating diseases.
With that I'll turn the call over to Mark to discuss our financial results.
Bob.
Thanks, Ross This morning, I will cover our second quarter 2025 financial performance.
Mark Ragosa: Thanks, Ross. This morning, I will cover our Q2 2025 financial performance. You can find our detailed financial information in today's press release. There are a few items I'd like to call your attention to. First, starting with our income statement on the left-hand side of the slide. ARCALYST revenue grew 52% year-over-year in Q2 to $156.8 million, driven primarily by strong growth in new patient enrollments, prescribers, and active commercial patients. Operating expenses grew 26% year-over-year in Q2, driven primarily by cost of goods sold and collaboration expenses from continued ARCALYST revenue growth, and SG&A in support of ARCALYST commercialization. Lastly, due to strong revenue growth coupled with more moderate expense growth, net income was $17.8 million in Q2 compared to a net loss of $3.9 million a year ago.
Can find our detailed financial information in today's press release.
There are few items I'd like to call your attention to.
First starting with our income statement on the left hand side of the slide <unk> revenue grew 52% year over year in the second quarter to $156 8 million.
Driven primarily by strong growth in new patient enrollments prescribers and active commercial patients.
Operating expenses grew 26% year over year in the second quarter, driven primarily by cost of goods sold and collaboration expenses from continued <unk> revenue growth and SG&A in support of <unk> commercialization.
Lastly, due to strong revenue growth coupled with more moderate expense growth net income was $17 8 million in the second quarter compared to a net loss of $3 9 million a year ago.
Second the right hand side of this slide provides the calculation of <unk> collaboration profit, which grew 75% year over year in the second quarter to $104 8 million driven by sales volume and disciplined commercial investment.
Mark Ragosa: The right-hand side of this slide provides a calculation of ARCALYST's collaboration profit, which grew 75% year over year in Q2 to $104.8 million, driven by sales volume and disciplined commercial investment. At the bottom of this slide, our cash balance increased by approximately $40 million to $307.8 million in Q2, and we continue to expect our current operating plan to remain cash flow positive on an annual basis. As you've heard from Sanj and Ross, both commercial and clinical execution in Q2 added to Kiniksa's significant momentum across its business. Combined with financial discipline and a strong balance sheet, Kiniksa remains well-positioned to continue to help patients as well as to create additional value in both the near and long term. With that, I'll turn the call back to Sanj for closing remarks.
Third at the bottom of the slide our cash balance increased by approximately $40 million to $307 8 million in the second quarter and we continue to expect our current operating plan to remain cash flow positive on an annual basis.
As you've heard from <unk> and Ross, both commercial and clinical execution in the second quarter added to connect a significant momentum across its business.
Combined with financial discipline, and a strong balance sheet <unk> remains well positioned to continue to help patients as well as to create additional value in both the near and long term.
And with that I'll turn the call back to <unk> for closing remarks.
Thanks, Mark as you've heard <unk> continues to execute both clinically and commercially and is well positioned to build significant future value.
Sanj K. Patel: Thanks, Mark. As you've heard, Kiniksa continues to execute both clinically and commercially and is well-positioned to build significant future value. We are dedicated to helping as many patients as possible with ARCALYST and to advancing the development of our clinical portfolio, which includes KPL-387, the liquid formulation IL-1 receptor antagonist, which has a target profile of monthly dosing. Our ultimate goal is to bring additional treatment options and therapies to patients suffering from debilitating diseases with unmet need. I'll now turn the call back to the operator for questions. Thank you.
We are dedicated to helping as many patients as possible with oculus and to advancing the development of our clinical portfolio.
Which includes KPN, 387% the.
The liquid formulation IL one receptor antagonist.
Which has a target profile of monthly dosing.
Our ultimate goal is to bring additional treatment options and therapies to patients suffering from debilitating diseases with unmet need.
I'll now turn the call back to the operator for questions. Thank you.
Certainly and our first question for today comes from the line of NUKEM Rama from Jpmorgan. Your question. Please.
Operator: Certainly, our first question for today comes from the line of Anupam Rama from JPMorgan. Your question, please.
Hey, guys. Thanks, so much for taking my question and congrats on the quarter.
Anupam Rama: Hey, guys, thanks so much for taking the question, and congrats on the quarter. I know you highlighted 15% penetration into the multiple recurrence setting at the end of Q2. Wondering if you could provide some commentary on kind of the trends that you're seeing in the first recurrence setting? I think the slide said about 20% of total prescriptions are coming from this setting. Thanks so much.
You highlighted 15% penetration into the multiple multiple recurrent setting at the end of <unk> I'm wondering if you could provide some commentary on kind of the trends that youre seeing in the first for current setting I think I think the slide said about 20% of total prescriptions are coming from this setting. Thanks so much.
Yes, Thanks, sorry about China. Upon this this is Ross. Thank you for that question, so you're right that in the two plus.
Ross Moat: Yeah. Thanks very much, Anupam Rama. This is Ross Moat. Thank you for the question. You're right that in the 2-plus recurrence group, as a reminder, that's a 14,000 patient population in any given year. We've seen continuous increase since the launch into the penetration into that group. Most recently going to 15% versus last reported at the end of 2024, of 13%. Seeing some nice increase within that group, and that remains our key target base. That's the patient groups who are suffering the most, have the highest burden of the disease, also most closely aligned with the data in RHAPSODY as well. We've also seen, as the treatment paradigm has changed over time, significant growth in earlier on in the disease. Those patients are still very much within label, the broad label that we have just for recurrent pericarditis, agnostic to the number of flares.
<unk> as a reminder, that's the 14000 patient population in any given year, we have seen continuous increase since launching sort of the penetration into that group. Most recently go into 15% versus last reported at the end of 2024.
13%, so <unk> seen some nice increase with within that group and that remains a key target base as the patient groups, who are suffering the most had the highest spud and of the disease OCI most closely aligned with the data and Rhapsody as well.
But we've also seen is the treatment paradigm has changed over time significant growth and early on in their disease. So those patients is still very much within label with a broad label that we have just for recurrent pericarditis agnostic to the number of flash and as an additional group of 26000 patients in that first with Cowen group.
Ross Moat: There's an additional group of 26,000 patients in that first recurrence group, which is a significant opportunity for us. I think what we're seeing now with around 20% of all the ARCALYST patients that were prescribed the drug when they were on their first recurrence is greater confidence, familiarity, knowledge of how to prescribe, how to look after patients while they're on ARCALYST, and just greater comfort overall for healthcare professionals having greater experience with the drug and having seen the impact that it has on patients in the real-world setting to utilize this drug early on in the disease. I think as well as an increase in understanding that recurrent pericarditis is a disease which is mediated by interleukin-1 alpha and beta. In order to control that disease and prevent future flares, patients are having to needlessly suffer those future flares.
Which is a significant opportunity for us and I think what we're seeing now with around 20% of all the <unk> patients were prescribed the drug when they were on that first for Collins is greater confidence familiarity no knowledge of how to prescribe Hudson the cough the patients while dive on Oculus and just wait to come for overall.
The health care professionals, having greater experience with the drug and haven't seen the impacts that it has on patients in the real world setting to utilize this drug early on in the disease and I think as well as an increase in understanding the recurrent pericarditis is a disease, which is mediated by interleukin one.
One alpha and beta and in order to to control of that disease and prevent future flash patients having to needlessly suffer those future flash the.
Asian of an inhibitor of interleukin one alpha beta this very well tolerated with high efficacy.
Ross Moat: The utilization of an inhibitor of interleukin-1 alpha beta that's very well-tolerated, with high efficacy, is being very well received by both patients and healthcare professionals. We're pleased to see an increase across the really whole population, which is a total of 40,000 patients in totality when you include the first recurrence on top of the 2 plus recurrence groups.
<unk> is being very well received by both patients and health care professionals. So we are pleased to see an increase in our cost maybe the whole population wishes types of 40000 patients in totality. When you include the first with <unk> and so on top of the two Clos recovered scripts.
Thanks, so much for taking our question.
Anupam Rama: Thanks so much for taking our question.
Thank you and our next question comes from the line of Geoff Meacham from Citi. Your question. Please.
Operator: Thank you. Our next question comes from the line of Geoff Meacham from Citi. Your question, please.
Hey, guys. Thanks for the question.
Geoff Meacham: Hi, guys. Thanks for the question. I just want to, I guess, follow up on Anupam's question. I guess when you look at the patients who've dropped off, maybe over, say, the past year or so, was the dose and frequency a big driver? I guess I'm trying to get a sense for what the new start outlook could be for 387. I'm under the assumption that you'll have a pretty good switch rate as well, looking from ARCALYST. Thank you.
I guess follow up on on our pumps question I guess when you look at the patients who dropped off.
Maybe over say the past year or so was.
Was the dosing frequency a big driver I guess I'm trying to get a sense for what the new start outlook could be for 387.
Under the assumption that youll have a pretty good switch rate as well looking from from Arcola. Thank you.
Thanks, Jeff.
We're seeing.
Ross Moat: Thanks, Geoff. We're seeing the patients continuing to stay on therapy for quite some time. We're seeing an average of 30 months in total. Patients are also pretty compliant to therapy overall at 85% or more. Patients are reacting very well while on ARCALYST. We're pleased about that. We believe that there's a significant opportunity ahead for ARCALYST as we continue to switch on more and more physicians. When you take the penetration numbers of 15%, I think that shows that we've had good growth up until this moment in time, but the opportunity ahead is significant, and that's without taking into account the first recurrence patients. We're very focused on continuing the growth of ARCALYST. Maybe I'll pause there. Sanj, you want to comment on KPL-387?
The patients are continuing to stay on therapy for quite some time, we've seen an average of 30 months in total patients are also pretty compliance to therapy, overall say, 85% or more.
And patients.
Reacting very well on all finished.
So.
We are pleased about that.
And we believe that there's a significant opportunity ahead for office as we continue to switch on more physicians.
And when you take the penetration numbers of 15%, so I think that shows that.
Had good growth up until this moment in time, but the opportunity ahead is significant and that's without taking into account. The first with <unk> patients. So we're very focused on continuing the growth of Barclift, maybe post sanction wanted commence on PSM, yes, no. Thanks, Jeff I mean, obviously, we're very excited about 387, and we are definitely tracking on this.
Sanj K. Patel: Yeah, no, thanks, Geoff. Obviously, we're very excited about 387, and we are definitely tracking on as far as the phase II, phase III study is concerned. Obviously, that'll be data dependent, but clearly, we've shown we know how to commercialize in this space. We've developed an awful lot of great contacts and relationships with physicians, so that'll be key. Ultimately dependent on data, but we certainly know how to do it. As I said, we've leveraged a lot of the learnings we had from RHAPSODY and from ARCALYST earlier on, so we'll continue to keep working on it.
Phase II phase III study is concerned.
Obviously that will be data dependent but clearly we've shown we note a commercialized in this space. We've developed an awful lot of great contacts and relationships with physicians, so that'll be key but ultimately depend on data.
But we certainly know how to do it and as I said, we've leveraged a lot of the learnings we had from Rhapsody and from <unk>, We will continue to keep working on them.
Okay. Thanks, guys.
Yes.
Geoff Meacham: Okay. Thanks, guys.
Thank you and our next question comes from the line of Paul Choi from Goldman Sachs. Your question. Please.
Operator: Thank you. Our next question comes from the line of Paul Choi from Goldman Sachs. Your question, please.
Alright, thanks, everyone. Good morning, and congrats on the quarter.
Paul Choi: Hi. Thanks, everyone. Good morning, and congrats on the quarter. My first question is, just given the pace of growth here, how do you think about potentially further expansion of the sales force and/or some sort of larger form of marketing/DTC to continue to expand awareness and drive penetration? My second question is, with 387, how are you thinking about potential in-office utilization in the future as part of the paradigm? Do you envision this potentially being more administered in office and just how you're thinking about self-administration versus physician administration down the road here? Thank you very much.
My first question is just.
Just given the pace of growth here, how do you think about potentially.
Further expansion of the sales force <unk>.
Some sort of larger form of marketing flash DTC to continue to expand awareness and drive penetration.
And my second question is with three 7%.
How are you thinking about potential.
In office utilization in the future.
Part of that paradigm.
Vision, this potentially being more administrative office and just how youre thinking about.
Self administration versus physician administration down the road here. Thank you very much.
Thanks, Paul this is not been down into a few comments and pass over to Russell to add but yes.
Sanj K. Patel: Thanks, Paul Choi. This is Sanj Patel. Maybe I'll make a few comments and pass over to Ross Moat if he has anything to add. Yes, very excited about the growth that we've had in ARCALYST, without a doubt. As far as the sales force is concerned, obviously, as we've always said, we do an awful lot of analytical work on what the right sizing is, looking at the territories, and we've done that, as you know, since launch just over 4 years ago. As you've heard in the past, we have increased that. At the moment, really, we've not made any comments as to exactly what we've done on the size of it. Last reported was around 85. We're certainly continuing to look at what's needed as far as growth is concerned, but I think they're being utilized incredibly well.
Very excited about the growth that we've had in arcalis without a doubt and as far as the sales force concerned obviously, we've always said, we do an awful lot of analytical.
Work on what the right sizing is looking at the territories and we've done that as you know since launch just over four years ago.
As you've heard in the past we have increased that so at the moment really we've not made any comments as to exactly what we've done on the size of at last report. It was around 85 with certainly continuing to look at what's needed as far as growth is concerned, but I think they're being utilized incredibly well and as far as the <unk>.
DTC and other things clearly our marketing groups had a great impact in the loan so far with sudden don't rest on our laurels. We're suddenly looking at in addition to what we've done as far as the sales force concerned in our existing materials and disease education physician education. We continue to look at other ways Im sure Russ can go into more detail, but with suddenly going to massive focus on digital mark.
Sanj K. Patel: As far as DTC and other things, clearly our marketing group's had a great impact in the launch so far. We certainly don't rest on our laurels. We're certainly looking at, in addition to what we've done as far as the sales force is concerned and our existing materials and disease education, physician education, we continue to look at other ways. I'm sure Ross can go into more detail, but we've certainly got a massive focus on digital marketing and looking at other ways we can really apply sort of not just the metrics, but also some of the new technologies that are out there to identify patients who are very much in need. It's a very exciting area for us. As you can see, it's still growing. There's an awful lot more we can do, and we certainly are tapping into that in the future.
<unk> and <unk>.
Looking at other ways, we can really apply sort of not just the metric, but also some of the new technologies that Rob that's identified patients. So it's very much in need so it's a very exciting area for us as you can see it's still growing there is and also what we can do with suddenly tapping into that.
Future, but maybe Rob you can comment on how we're looking at marketing and expanding on our success.
Sanj K. Patel: Maybe, Ross, you can comment on how we're looking at marketing and expanding on our success.
Yes, absolutely thanks, Simon and thank you Paul Yes, I think the key thing here.
Ross Moat: Yeah, absolutely. Thanks, Sanj, and thank you, Paul. Yeah, I think the key thing here on top of what Sanj said is just we're an organization that never rests on our laurels. We're quite happy with how the launch has gone to date. We have so much more to do as an organization. Yeah, we've got to be very innovative in our approach, constantly evolving and refreshing what we do and finding better ways of doing things. As we get more and more into this market and increase our understanding of the market, we find that we can get more effective over time as we just have greater understanding. The utilization of newer technologies is also important to us. We have looked at utilizing AI in our targeting strategy and in a variety of different digital marketing environments, and that's proven very successful for us.
Such that it's just the way way off.
An organization that never restaurant, our lowest we were quite happy with how the launch has gone to date, but we have so much more to do as an organization.
And yet with good <unk>.
<unk> approach constantly evolving and we especially in what we do in finding better ways of doing things that as we get more into this market and increase our understanding of the markets. We find that we can get more effective over time.
We just have great way to understand it the utilization of <unk>.
Technology is also important to us we have to.
Utilizing AI.
Our tuck in strategy and in a variety of different digital marketing.
Environments, that's proven very successful for us and we Havent Chad great detail on that but.
Ross Moat: We haven't shared great detail on that, but we're utilizing a lot of new technologies now, which is really paying dividends and helping us to get out there to physicians and to patients and making a difference in this marketplace. We constantly evolve and look at new ways of doing things to get better and better over time. To the second part of your question, Paul, regarding in-office versus outpatient use. The vast majority of ARCALYST is in outpatients under pharmacy benefits. With KPL-387, obviously, as Sanjay said, everything is data dependent, and we'll see as we progress further.
We utilize in a lot of new technology is now which is really paying dividends in helping us to gal that to physicians and patients and making a difference in this marketplace. So we constantly evolve and look at new ways.
Doing things to get better and better over time.
So the second part of your question Paul regarding an office versus outpatient use the vast majority of our policies and our patients.
The pharmacy benefits.
With <unk> seven obviously as Jon just said everything is data dependent and we'll see as we progress further but with the target profile of monthly.
Ross Moat: With a target profile of monthly and in a liquid formulation with the potential to go to an auto-injector, that also plays nicely into where the patients are, which is ultimately not wanting to be in hospital suffering from this disease, but being treated appropriately and kept at home and preventing flares and preventing them going into hospital for the future. Whether that precipitates a change in in-office versus outpatients and patient administered in their own home is to be seen. We don't see a substantial call for in-hospital utilization.
In our liquid formulation with the potential to go to an auto injector.
That also plays nicely into.
Into the where the patient saw which is ultimately not wanting to be in the hospital.
Suffering from this disease, but being treated appropriately and catch up higher than prevention Flash and prevention of go into the hospital for the future.
So whether that precipitates, a changing kind of in office versus <unk>.
Thus as outpatients.
Patient administered and that I.
I'd hive has yet to be seen but we don't see a substantial coal.
In hospital utilization.
Okay, great. Thank you for taking our questions.
Paul Choi: Okay, great. Thank you for taking our questions.
Yes.
Thank you and our next question comes from the line of <unk> from Wells Fargo. Your question. Please.
Operator: Thank you. Our next question comes from the line of Eva Fortea-Verdejo from Wells Fargo. Your question please.
Good morning, Congrats on the quarter and thanks for taking my questions two.
Eva Fortea-Verdejo: Good morning. Congrats on the quarter, thanks for taking our questions. Two quick ones from us. On ARCALYST, from the 30-month average therapy duration, can you give us a sense in terms of numbers on how are you seeing a shorter treatment duration in the patients in 1st recurrence versus patients in 2nd and beyond? The 2nd question is on 387. Can you discuss how you're thinking about the balance between remaining cash flow positive on an annual basis and initiating studies and new indications beyond recurrent pericarditis? Thanks.
Two quick ones from us so on <unk> from the 30 month average therapy duration.
Can you give us a sense in terms of numbers on how.
Are you seeing a shorter treatment duration to patients in first recurrence versus patients in second and beyond.
And the second question is on <unk> can you discuss how you're thinking about the balance between the remaining cash flow positive on an annual basis and initiating studies in new indications beyond the current great Great day. Thanks.
Thanks, David Thank you very much for the question. So I'll, let me take the first part and then hand over to someone else they have to cover the second part.
Ross Moat: Thanks, Eva Fortea-Verdejo. Thank you very much for the question. I'll certainly take the first part and then hand over to someone else to cover the second part. We're not really seeing any meaningful differences in terms of duration from the different cohorts, including patients on a first recurrence versus second, third, fourth, fifth recurrence groups. Of course, the data is always evolving and building, and as more patients are starting to be initiated on ARCALYST earlier on in the disease, we just don't have some of that data yet. It will build, and we'll report as we see it later down the line. From what we see so far, no significant differences. The average is 30 months. The median of the initial duration of therapy is around 17 months, and the restart rate remains around 45%.
Yes.
Really seeing any meaningful differences in terms of duration from the different cohorts and included patients on a first recurrence verses second third fourth fifth recurrence groups.
But of course, you know the data is always evolving and build it in as more patients starting to be initiated on arcalis early on in the disease.
Don't have some of that data yet, but it will build and we will report as we see it later down the line, but from what we see so far.
Very significant differences the average is 30 months.
The median of the the initial duration of therapy is around 17 months and the reach saw rates remains around 45%.
I think importantly of all of those patients started all cliffs and our launch quarter backing Q2 of 2021 now around 10% of all of those patients that started way back then are still on therapy and main in their initial.
Ross Moat: I think importantly, of all those patients that started ARCALYST in our launch quarter back in Q2 of 2021 now, around 10% of all of those patients that started way back then are still on therapy, meaning their initial treatment of therapy and have just stayed on throughout, which I think is testament to the effect and how well-tolerated ARCALYST can be for many of these patients. No significant differences to date. Obviously, it's something that we will keep an eye on and report as we see.
Treatments of therapy and have just stayed on throughout which I think is testament to the effect of the how well tolerated arcalis debate.
So many of these patients so no significant differences today, it's obviously something that we will keep an eye on reports as we as we say.
As far as your second question regarding cash flow and further investment I think at this point in our life cycle. We are focused on continuing to create value and importantly, as we've talked about in the past, we do think that through commercial execution and continued financial discipline. We do have the capacity to continue.
Sanj K. Patel: As far as your second question regarding cash flow and further investment, I think at this point in our life cycle, we are focused on continuing to create value. Importantly, as we've talked about in the past, we do think that through commercial execution and continued financial discipline, we do have the capacity to continue to create value across our business, whether it's to further maximize the opportunity with ARCALYST, to further advance our pipeline, and/or to pursue strategic initiatives.
To create value across our business, whether it's to further maximize the opportunity with <unk> to further advance our pipeline in order to pursue strategic initiatives.
Yeah.
Got it thanks.
Eva Fortea-Verdejo: Got it. Thanks.
Thank you and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone. Our next question comes from the line of Roger song from Jefferies. Your question. Please.
Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Roger Song from Jefferies. Your question please.
Great Congrats for the quarter and thank you for taking my question, maybe two quick ones for the pipeline. The first one the PPL 387, so understanding youre doing the phase II portion to decide that dosing just curious about what what is the target efficacy safety profile, particularly in the <unk>.
Roger Song: Great. Congrats for the quarter. Thank you for taking our question. Maybe two quick ones for the pipeline. The first one, KPL-387. Understanding you are doing the phase II portion to decide the dosing. Just curious about what is the target efficacy safety profile, particularly in the context of comparison to ARCALYST, you can make a decision to decide a dose and how likely you will move multiple dose into the phase III portion, something like induction maintenance. A quick one for the KPL-1161, on the enabling right now, what's the current thinking about the potential indication for this quarterly IL-1? Thank you.
Contacts of comparison to Arcalis, you can make a decision to define the dose and how likely you will more multiple dose in GBM phase III portion something like an infection maintained since and then a quick one for the $11 61.
IND, enabling right now and then what's the current thinking about the potential indications for this correlate our one thank you.
Yeah, no. Thanks for that question.
We will actually both of those questions. So regarding the profile of <unk> <unk> seven.
John F. Paolini: Yeah. No, thanks for that question. Well, actually both those questions. Regarding the profile of KPL-387, what we're looking for in the dose focusing portion of the trial is to select the dose that we'll use in the pivotal portion of the trial. In that sense, the ability to treat the acute flare as it happens and then prevent the subsequent flare is really the profile that we established with ARCALYST, and that we're looking for similar profile, if you will, with regard to the KPL-387 efficacy. Once we've selected that dose, we then carry that forward into the randomized withdrawal portion pivotal section of the trial, which bears a remarkable similarity in terms of its design, in terms of the endpoints that we have structured. At that point, it'll be data-driven in terms of what the actual profile of KPL-387 is.
What we're looking for in the dose focusing portion of the trial is to select the dose that we'll use in the pivotal portion of the trial and so in that sense the ability to treat the acute player as it happens and then present. The subsequent flare is really the profile that we established with <unk> and that we're looking for.
Similar.
The profile, if you will with regard to the <unk> seven efficacy and so once we've selected that dose. We then carry that forward into the randomized withdrawal portion pivotal on a section of the trial, which bears a remarkable similarity in terms of its design in terms of the the endpoints that we have structured and so at that point it will be.
<unk> data driven in terms of the what the actual profile of <unk> hundred 87 is but we're very confident we are in the study design is being able to show the strength of <unk> 87, and its target profile of once monthly dosing.
John F. Paolini: We're very confident in the study design as being able to show the strength of KPL-387 and its target profile of once monthly dosing. Regarding the second question of KPL-1161, at this point, we've not announced any specific indication. We realize that there's broad potential of having an IL-1 alpha, IL-1 beta inhibitor pathway inhibition, if you will, that has a target profile of dosing every 3 months. That really opens the possibility of a range of chronic lifelong diseases that are auto-inflammatory. We'll continue to do that work. In the meantime, our focus is on the IND-enabling studies so that we can begin the first-in-human study as soon as possible. Thank you so much.
Regarding the second question of 11 61 at this point, we have not announced any specific indication we realize that there's broad potential of having an IL one alpha IL, one beta inhibitor pathway inhibition, if you will.
<unk> has a target profile of dosing every three months and so that really opens the possibility of a range of chronic lifelong diseases that are auto inflammatory. So we will continue to do that work, but in the meantime, our focus is on the IND, enabling studies. So that we can begin the first in humans.
As soon as possible. Thank you so much.
Okay.
Thank you.
Yes.
Thank you and our next question comes from the line of David <unk> from Wedbush Securities. Your question. Please.
Sanj K. Patel: Thank you.
Operator: Thank you. Our next question comes from the line of David Nierengarten from Wedbush Securities. Your question, please.
Hey, Thanks for taking my question I had.
David Nierengarten: Hey, thanks for taking the question. I had two. Maybe one is kind of a follow-up to the last one. Is there any specific kind of efficacy boundaries that you're looking for out of the KPL-387 study? Of course, ARCALYST showed a near 100% drop-off in recurrences. Is that the kind of efficacy bar we should be thinking about, or could it be a little bit lower because of the more convenient dosing? I had another question on just emerging competition. There's a potential oral competitor out there that's going to report out data this half. Is there any thinking on that or any thoughts on how we should think about the potential competition emerging? Thanks.
Two and maybe one.
It's kind of a follow up to the last one but is there any.
Specific kind of efficacy boundaries that youre looking for out of the 287 <unk> So of course.
<unk>.
Nearly 100% drop off in recurrences, I mean is that the kind of efficacy bar, we should be thinking about or could it be a little bit lower because of it.
More convenient dosing and then I had another question on <unk>.
This emerging competition.
A potential oral.
Competitor out there that's going to report out data.
That's half is there any.
Any thinking on that already.
Thoughts on how we should think about the year.
Potential competition emerging thanks.
Sure. Thanks, David I appreciate the questions. So regarding the efficacy profile in the phase III.
John F. Paolini: Sure. Thanks, David. Appreciate the questions. Regarding the efficacy profile in the phase II studies, the dose-focusing portion, we're really looking across a range of different dose levels in order to understand the performance characteristics of KPL-387. In that sense, we intend to use the totality of the data in order to define the dose level that we'll take forward. At this point, it's a little early to describe exactly what the expectation is precisely, but rather to say that I think this will be a very informative study based upon its design that'll help us optimize the performance of the drug.
Studies that does focusing portion we're really looking across a range of different dose levels in order to understand the performance characteristics of <unk>, 3% evidence. So in that sense, we intend to use the totality of the data in order to define the dose level that we will take forward. So at this point, it's a little early to describe exactly with the.
Expectation is precisely but rather to say that they think this will be a very informative study based upon its design that will help us optimize the performance of the drug.
Regarding our company.
John F. Paolini: Regarding competition that's on the horizon, we remain the leaders in the space of recurrent pericarditis for the reason that we have really done the deep work in understanding the mechanism of this disease, and we've identified the fact that IL-1 alpha and IL-1 beta inhibition is a critical element for maintaining control of the disease, and in point of fact, to be able to maintain control of the disease as monotherapy. We continue to look with interest to see other data as they emerge. Understanding those, shall we say, those mechanisms will have to define themselves in the context of the fact that, as I mentioned, we understand that complete control of the disease requires control of both cytokines. Thank you.
Competition, that's on the on the horizon.
We remain the leaders in this space of recurrent pericarditis for the reason that we have really done the deep work in understanding the mechanism of this disease and we've identified the fact that IL, one alpha and IL. One beta inhibition is a critical element for maintaining control of the disease, an important fact to be able to maintain control of the disease as mono therapy and so.
We continue to look with interest to see other data as they emerge but understanding those.
Shall we say those mechanisms will have to define themselves in the context of the fact that as I mentioned, we understand that complete control of the disease requires control of both cytokines. Thank you.
Thanks.
Yes.
David Nierengarten: Thanks.
Thank you.
And this does conclude the question and answer session of today's program I'd like to hand, the program back to such Patel for any further remarks.
Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Sanj Patel for any further remarks.
Thank you operator, and thanks, everybody for the questions and joining the call today, we look forward to the remainder of the year and to providing additional opportunities and updates in the future. So very excited and thank you very much.
Sanj K. Patel: Thank you, operator, and thanks, everybody, for the questions and joining the call today. We look forward to the remainder of the year and to providing additional opportunities and updates in the future. Very excited, and thank you very much.
Yes.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.