Townsquare Media Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2023

There are 12 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Redland Pharmaceuticals Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Connolly, Investor Relations and Corporate Communications.

Operator

Please go ahead.

Speaker 1

Thank you, Victor. I'm Dave Connolly here at Irvin Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the Investors section on the Investors page of our website at ir.rhythm tx.com. This morning, we issued our press release that provides our Q3 2023 financial results and a business update, which is available on our website. As listed on slide 2, here with me today in Boston are David Meeker, Chair, Chief Executive Officer and President of Irvin Pharmaceuticals Jennifer Chen, Executive Vice President, Head of North America Hunter Smith, our Chief Financial Officer and Jan Mazarou, Executive Vice President, Head of International is joining us On slide 3, I'll remind you that this call contains remarks concerning future expectations, plans and prospects, which constitute forward looking statements.

Speaker 1

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in our most recent annual or quarterly reports on file with the SEC. In addition, any forward looking statements represent our views only as of today and With that, I'll turn the call over to David Meeker, who will begin on Slide 5.

Speaker 2

Thank you, Dave, and good morning, everyone. Thank you for joining the call. So we're pleased to report out another very strong quarter with continued execution across all parts of our business. The 2 near term drivers of Ribbon value, Building the BBS commercial opportunity globally and enrollment into our Phase 3 HO trial remain on track. I'm incredibly impressed by We are approved to treat ARM, as we have discussed multiple times, highly meaningful rare disease opportunities.

Speaker 2

But they do fall in the The sheer volume of noise around the management of obesity as a disease and the use of GLP-one specifically has both aided the cause. Health providers are looking more closely at patients who present with obesity and doing the appropriate workups and hinder the cause where the availability of powerful therapies such as GLP-one medication Has led many to believe that all obesity is the same and GLP-1s represent universal solutions. As we know, that is not correct. Obesity is not one disease, but many diseases and as with most forms of medical therapy, the more targeted and specific the solution, the better. The medical community continues to learn more about the factors which control hunger, the role of the different pathways and the effect of different drugs play in modulating those pathways.

Speaker 2

Our story remains relatively simple. We're replacing we're supplementing a hormonal signal, which is deficient. So if you're managing a patient, why wouldn't you start there? Revenues in the quarter came in at $22,500,000 showing exactly the steady growth we had hoped to see. We're pleased with the script volume in the U.

Speaker 2

S. Where the team is doing a great job educating on the MC4 pathway and the value of precision therapy. And we are incredibly excited to cross the 100 patient threshold in Europe, where in addition to the usual challenges facing rare disease communities, Market access across the different healthcare systems can be particularly challenging. We have experienced teams in all geographies who are remarkably skilled at navigating these challenges. My experience working in rare diseases with many similarities to our current world has taught me, it never gets easier.

Speaker 2

The revenue trajectory does not inflect, But these opportunities continue to grow over time. HO Phase 3 enrollment continues on track with 2 thirds of the patient screen, That's our proxy for enrollment as almost none of these patients screen fail. The majority of patients needed to complete enrollment have their screening visits already scheduled We still have sites we're just opening or scheduled to open and who are eager to get their patients enrolled. We did get early access approval for HO in the Q3 in France based on the 18 patient Phase 2 data alone. This is an incredible recognition about the unmet medical need in this population and the potential significant impact treatment may have.

Speaker 2

The first patients, as Jan will outline, should be treated before year end. Finally, we look forward to providing additional updates at our R and D Day, particularly with regard to our next generation weekly formulation, the DAYBREAK trial and our pediatric results. So moving to Slide 6, we recently had a separate analyst call following a very meeting in Dallas with multiple presentations, which are outlined here. What's particularly gratifying about these meetings, it's the opportunity to meet with the community in person And feel literally the growing interest in learning more about the different forms of obesity including MC4R pathway diseases. On Slide 7, I want to take you through all of the 12 month HO data that we reviewed on the last call.

Speaker 2

14 patients entered the long Across the 12 patients who had 12 months of data and I remind you that this is a blend, this trial is a blend of ages with 11 of 12 of the patients, pediatric patients and the pediatric patients are growing where you would expect the BMI to actually increase with that growth. The two panels on the right are the 2 patients who are off treatment for some period of time. A short message here is, if you take the therapy, most patients respond and when you stop treatment, I. E. You stop this hormone replacement therapy, your BMI weight increases.

Speaker 2

Finally, there's growing interest in the quality of the weight loss, Meaning losing fat mass is good, but losing large amounts of lean mass is not good. Our early results suggest we do pretty well in that category as shown on the DEXIScan results which we presented on the poster. And one other graphic on the poster shows the shift in obesity class experienced by the patients with 3 of the pediatric patients actually getting back into the normal BMI range for their age. Slide 8, this is just to remind you of the trial design where we are targeting 120 patients and as noted 2 thirds of the patients have been screened and the majority of the balance of patients needed to complete the trial have already scheduled their screening visits. And importantly, I mean, I think this is it's kind of still early here, but quite noteworthy.

Speaker 2

Of the patients treated, We've had almost no trial discontinuations. So finally on Slide 9, this slide is to remind you that we are working on meaningful opportunities. You could build a very profitable company around BBS and the palm c and lep bar monogenic opportunities we are approved for today. However, we are investing significantly in R and D because those opportunities that we are pursuing are even greater. And as you know, for example, the HO opportunity itself represents a large well identified patient population with no approved therapies.

Speaker 2

And with that, I'll turn the call over to Jennifer.

Speaker 3

Thank you, David. We are pleased with the continued progress we are seeing with our BBS commercial launch. Hundreds of patients with BBS in the U. S. Are now realizing the benefits of ensivary therapy.

Speaker 3

We continue to hear the positive life changing impact we are making to the lives of patients and families. Recently, we heard from one mother whose son is on IMCIVRI therapy And Savory has had a profound effect on his weight and his hyperphagia. He is full for the first time, Leaves the dinner table before everyone else in the family and for the very first time he told his mother he does not like certain foods like lima beans, Tomatoes and Pickles. In the mother's words, we are experiencing him as a kid, not a hungry kid. Incybri is the only therapy approved specifically to treat obesity due to VBS and we are thrilled to hear these stories from patients and families to now have access to therapy.

Speaker 3

Beginning on Slide 11, we are pleased with the growth and consistent strong demand for Obsivory over the first 5 quarters. Throughout the launch from June 16, 2022 through the end of Q3 of 2023, We now have received more than 545 new BBS prescriptions coming from more than 300 prescribers. Of these prescriptions, we have greater than 330 approvals for reimbursement from payers. On the next slide, I will cover results within the Q3. We received greater than 120 prescriptions with 80 approvals within the Q3.

Speaker 3

Several of these approvals were from prescriptions received within the quarter, while others were written in prior quarters. We continue to identify more BBS patients and work to speed diagnosis. Our active engagement with physicians remain focused on disease awareness, diagnosis and the benefits of Oncivri. And our Rhythm and Tune team continues to deliver support to provide both to patients and families and healthcare providers every step of the way. Next slide.

Speaker 3

Here is a snapshot of the patients with VBS behind these prescriptions. We continue to see an upward trend in terms of prescriptions received from adult patients. As we've touched on before, this trend diverges from the age distribution in the CRBS registry, A global registry has a data on VBS patients where approximately 80% of registry participants are 18 or younger. We believe this trend is representative of adult patients who simply aged out of participating in this annual survey or who are lost to follow-up. Once SYMCEVRI was approved through our education efforts, many of these patients where we engage with their physicians.

Speaker 3

This is not uncommon in rare disease where the first approved therapy for disease Causes not only increased awareness of the disease, but also allows for increased reengagement of the broader diagnosed patient population. Next slide. Onto prescribers. Endocrinology, both adult and pediatric, remains consistent over the last few quarters as our top specialty accounting for 45% of prescribers. We are seeing an increase in the portion of new to Rhythm prescribers or physicians our territory managers had not previously called on directly prior to prescription, which now accounts for 28% of our prescriber base.

Speaker 3

This reinforces the We have in our non personal promotion efforts. Lastly, we are seeing an increase in the depth of prescribers as 28% of them have written more than one prescription launch to date, which is up from 25% as reported on the last quarterly call. We remain focused on a greater breadth of prescribers over time as well as more and more physicians to identify additional Next slide. Access and reimbursement remain consistent with regard to overall coverage by state Medicaid and the overall payer mix. If we look at Medicaid coverage through covered lives, launched to date approximately 80% of Medicaid covered lives are in states with either a positive MCIVI policy in place or in a state where we have been able to gain positive coverage in at least one instance in the absence of an emcifery policy.

Speaker 3

The remaining 20% of Medicaid lives represent states where we either have not yet had a prescription for emcefri that would trigger a coverage decision or We are still working to secure access for a prescription or finally where we have not been successful in gaining access through the appeals process. The payer mix for BBS remains consistent as almost 90% of prescriptions since launch fall under commercial or Medicaid plan. The average timeframe for approval is approximately 1 to 3 months with some tails extending out several months, consistent with our previous report. Overall, we are pleased with achievements to date in securing approval. Next slide.

Speaker 3

Now more than 1 year into launch, we are seeing a very strong rate of reauthorization for continued MCEV recovery with approximately 75 positive reauthorization decisions. The vast majority of these reauthorizations are approved initially and we have seen roughly a half dozen positive reoff decisions come upon appeal. Most of these positive appeals had required additional clinical documentation to allow for a reauthorization approval. We have had a few denials to date and we are in the process of appealing. To provide some color on these, we have patients who have experienced overall clinical benefit, but have not achieved 5% body weight loss.

Speaker 3

For example, one had a reauthorization within 4 months of its GPRA initiation, while our label outlines a 12 month efficacy touch point. Another patient saw other clinical benefits and was just shy of the 5 In both cases, we are working with the advocating physician and patient through the appeals process. Next slide and final slide for me. We were very pleased to announce that a new ICD-ten diagnosis code was established for BBS. This is a long term positive for the BBS community and for Rhythm as this improves understanding of the diagnostic and to find already diagnosed patients while expediting the identification of individuals with VBS who do not yet have a diagnosis.

Speaker 3

We are excited about our progress and the opportunities in front of us. With that, I'll hand it over to Jan.

Speaker 4

Thank you, Jennifer, and good morning. Slide 19. Today, we are very pleased to announce We have achieved a significant international milestone with more than 100 patients from 11 countries outside of North America on reimbursed therapy as of the end of October. Our first patients on reimbursed drugs started with the AP2 program in France for pump CNPAR deficiencies in March of 2022 and it has been a gradual and steady build since then as new countries came online for POMCY and EPAR And that continues as new countries come online for BBS, beginning with reimbursed early access in France and now fully launched in Germany. Regarding the French AP1 pre EME approval reimbursed early access program for hypothalamic obesity, We are now working through the process to get it started.

Speaker 4

This program often starts slow because of the administrative requirements. We have not Europe is a key market for rare diseases for Rhythm. European countries typically are better organized and more centralized in their approach to rare diseases compared to the United States. Even though these diseases are quite rare, the opportunity is meaningful. As a reminder, in the EU focused UK, We estimate the prevalence for Bardebital syndromes to be 4000 to 5000 patients, which is a prevalence similar to the U.

Speaker 4

S. And we have already more than 1500 patients identified in these countries. We are pleased with progress to date in achieving market access for Insivri in a large number of international markets. Next slide. Our launch in Germany is off to a solid start Following the unanimous decision of the German Federal Joint Committee, or GBA, to exclude ancillary from Germany's lifestyle exemption list and thereby make it eligible for full reimbursement for BBS.

Speaker 4

Our team is focused on engaging with physicians caring for patients with BBS and with many centers where they are treated. Building off our initial launch in Pomp Sionn Lipa, we have very well established relationships in place as a handful of Key experts already had positive experience within theory. In addition, we benefited from a full commitment from key treatment centers and in parallel, Our German team continued engaging with additional large academic centers in Germany's decentralized healthcare system. We are seeing strong adherence to therapy, thanks to our Rhythm at Home patient support program. Similar to the U.

Speaker 4

S. Rhythm Intune program, We provide support tailored specifically for each patient and their caregivers. For some, our support may come via phone call, others may receive at home visits and Ingecion, Singapore. Based on what we know about typical rare diseases drug launches in Germany, We expected a steady and methodical start. With a strong foundation in place based on our Ponsilipa experience, continuously increasing numbers of VB's Next slide.

Speaker 4

More broadly, we are making tremendous progress in engaging physicians throughout Europe. We had a very strong presence at the European Society For Pediatric Endocrinology in September with 4 oral presentations. Two presentations showcase data that demonstrate septalantide's potential to reduce risk of metabolic syndrome, cardiovascular disease and type 2 diabetes in pediatric patients with PONC or Lipar Deficiency or Bardebel syndrome. We also presented data from our raw genetic testing program through which we have collected more than 2,000 sequencing samples from individuals with severe obesity and hyperfiture. In addition, we hosted a symposium titled Hyperphagia and Early Onsets Severe Mobility, The Role of Precision Medicine In the treatment of FT4aMAD pathway disease, as you can see on this slide, it was very well attended with in fact 400 physicians in the room.

Speaker 4

We look forward to continuing this momentum at our 2nd international meeting on pathway related obesity, the IMPROVE conference in December in Paris. We are looking forward to a series of presentations, discussions and engagements focusing on rare MC4 R pathway diseases, Monogenic 1, syndromic like BBS and hypothalamic obesity with more than 150 leading physicians and scientists coming from more than 10 countries. With that, I will turn the call over to Hunter in Boston.

Speaker 5

Thank you, Jan. Rhythm remains tightly focused on global execution of commercial strategy across both our North America and international regions and continued development of the potential of Incybri and our pipeline, all while staying committed to financial discipline and delivering shareholder value. Let's start with a snapshot of the Q3 P and L on Slide 23. We recorded $22,500,000 in net product revenue in the 3rd quarter versus $4,300,000 during the same quarter last year, an increase of $18,200,000 Q3 last year was our 1st full quarter of BBS commercial sales in the United States, which followed FDA approval on June 16, 2022. Quarter over quarter, we saw an increase of $3,300,000 or 17% in net Product revenue, driven by continued growth in the number of patients on Xivri therapy in both the U.

Speaker 5

S. And international regions. In last quarter's results, We highlighted that $1,600,000 of our revenue resulted from shipments to our specialty pharmacy in excess of amounts that it dispensed to patients, resulting in an increase in inventory days on hand at quarter end. This quarter, shipments to the SP and dispenses to patients were very closely matched, resulting in a de minimis Because of the larger number of patients on Amsivri therapy at the end of the Q3, inventory days on hand at the SP decreased, but remained within a normal range. Gross to net for U.

Speaker 5

S. Sales quarter over quarter decreased to 83% from 85% in in the Q2, primarily due to a Medicaid rebate adjustment in that quarter. Our practice is to accrue for Medicaid rebates Based upon expected payer mix and when actual Medicaid invoices are received, this may result in differences versus accrued amounts. Cost of sales during the Q3 was $2,400,000 or approximately 10.7 percent of net product revenue, representing a slight percentage decrease quarter over quarter. Cost of sales consisted primarily of product costs, our 5% royalty to Ipsen under our original licensing agreement for setmelanotide as well as amortization of previously capitalized sales based milestone payments.

Speaker 5

R and D expenses were $33,600,000 The Q3 of 'twenty three compared to $21,100,000 during Q3 'twenty two and essentially flat compared to Q2 2023 R and D expenses of $33,500,000 SG and A expenses were $30,500,000 for the Q3 of this year versus $21,900,000 for the Q3 of 2022 and also essentially flat quarter over quarter versus $30,000,000 in the Q2 of 2023. In the Q3, weighted average common shares outstanding were 57,900,000, an increase of approximately 1,000,000 shares over last quarter, resulting primarily from our equity issuance under the ATM program during the quarter. Quarterly net loss per share was $0.76 Now on Slide 24. With the 3rd and final investment tranche of $25,000,000 from our capped royalty financing agreement with Healthcare Royalty Partners And gross proceeds of approximately $50,000,000 from our ATM program during the quarter, we are very well financed with $299,300,000 in cash on hand. This cash on hand is sufficient to fund all planned activities into 2026.

Speaker 5

On the net revenue for this quarter of 22,500,000 80% of these revenues were generated in the United States. The proportion of revenue generated by our international region increased from 14% to 20% quarter over quarter. Year to date net revenue was $53,200,000 and North America sales account for 83% of that total. International sales growth continues with much of the quarter over quarter increase due to sales in Germany following the BBS launch with this Q3 being the 1st full quarter of BBS sales in Germany, as well as an increase Total stock based compensation of $8,500,000 for the quarter, which represents $23,900,000 in OpEx year to date. Lastly, we have narrowed the range of our non GAAP operating expense guidance for 2023 to between $210,000,000 $220,000,000 Please note that this amount excludes stock based compensation.

Speaker 5

With that, I'll turn the call back over to David.

Speaker 2

Thanks, Hunter. So I think hopefully you've heard we're really happy with how the commercial Opportunity is beginning to develop here, obviously in the U. S. And now you've heard international is becoming an increasingly important part of this overall picture as it will And on the HO side, just to highlight a moment of thanks here. I think thanks to our investigators and the patient community who have been incredibly engaged here I'm in supportive of getting this trial going, not an easy trial, it's a double blind placebo controlled to the one, but you sign up with a chance you'll end up for a year On a placebo therapy.

Speaker 2

So again, I've been really pleased with the reaction from the community and their engagement here. And A final note, thanks to the Rhythm team and not an easy trial, it's a complicated trial with collecting a lot of information, important information will be one of the Perhaps our last chance to get this kind of robust information in a controlled trial setting. So they've done a great job Again, getting us to this position and putting us in place to be able to meet our end of the year enrollment targets. So with that, we'll open it up to questions.

Operator

Our first question comes from the line of Corrine Jenkins from Goldman Sachs. Your line is open.

Speaker 6

Good morning. Thanks for taking our question. I guess a couple from us. Maybe first, how should we think about the development for RM718 as compared to the way you developed in Savary? Will it Largely mirror or are there some kind of faster paths that you can take on that asset?

Speaker 6

And then as a follow-up, but kind of separate question, Where are the bulk of these 100 international patients, both with respect to region as well as BBS versus the PPL indication? And how does that kind of compare to where you were at the end of September?

Speaker 2

Yes. Thanks, Tran. So I'll take the first one and then Jan, I'll So on 718, there is a faster path. I mean, you remember the very first trials that were done were in Sivri, were done in POMC, Left and receptor biallelic patients, again, we were learning about dosing. There was a lot of just we had to learn about the mechanism.

Speaker 2

So we benefit from all of that prior learning. HO, we had no clue of at that point and HO as we have seen looks like a very sensitive model here. So again, A great place to start. So the strategy for 718 will be after we've done our normal volunteer SAD MAD, the single ascending dose and multiple ascending dose portions of that Volunteer study will have a cohort of HO patients, which hopefully will give us the insight that we need for dosing to then go to the additional indications. So it should go faster, will go faster.

Speaker 2

There's no question it will go faster. Jan, on

Speaker 4

the 100 patients? Yes. So first of all, in terms of geographic repartition, 2 third of the patients are in France and in Germany And the rest spread across 4, 5 countries, Turkey, Italy, Netherlands, UK. The split between POMC, Lipar and DBS, right now it's about fifty-fifty, which is the reason because we did launch POMC and Lipa first. But given the more important prevalence EBS, we will catch up Quickly and the EBS will outpace from CND part soon.

Speaker 3

Very good. That's helpful. Thank you.

Operator

And our next question comes from the line of Phil Nadeau from TD Cowen. Your line is open.

Speaker 7

Good morning. Congrats on the progress and thanks for taking our questions. 3 from us, 2 pipeline and 1 commercial. On the pipeline, In terms of the HO pivotal study, should we look at the 25.5% mean BMI reduction that was shown in the 12 month extension as a reasonable proxy for what could be seen on the primary endpoint in the HO pivotal? That's the first question.

Speaker 7

2nd, any update on the M and A enrollment? And then 3rd, in terms of commercial, curious to hear your most recent estimates of how penetrated the U. S. Diagnosed BBS market is. Any sense of the number of diagnosed patients that are out there today?

Speaker 7

Thanks.

Speaker 2

Sure. So let me take The first two, so is the 25% a good proxy? I mean, obviously, that's an incredibly robust result. We're very happy. I've said as Many times, it's a little bit less about the magnitude of the change because we have a heterogeneous group of patients.

Speaker 2

We have very young kids. We have Older adults, we're mixing them all together. So that confounds a little bit that number going to read through. But what is remarkable is the consistency of the response. I mean literally every patient in that trial, if they took the medication is having a So we're powered for 10% difference.

Speaker 2

I think there's little risk, knock on wood, that We wouldn't do better than that and the 25% speaks to that level of it. We're highly powered, 99% better powered to show the temp So a long way of saying, I don't think you can take the 25% necessary as a read through, but it's highly in this patient group. And then M and A, so we're making progress there. Again, we haven't highlighted it so much because we're still Still a work in progress, but I think we sorted out the issues which put us well behind here on that trial and that trial is now and running, enrolling strongly. A couple of the cohorts are enrolling ahead of 2 of the other cohorts, which is not unexpected.

Speaker 2

We didn't expect all 4. So I think what we'll do is, We'll be reading out in 2024 I'm sorry, we'll announce in 2024 that we fully enrolled as a year study once we're fully enrolled for when at least 2 of those cohorts have enrolled. And then on the commercial side in terms of penetration, Jennifer, I mean, again, make these epidemiologic estimates of 4000 to 5000 and there's uncertainty in those numbers, but how do you think penetrating against that?

Speaker 3

So we have not updated the number of patients that have been diagnosed. I will just say that and we've been Okay. Thanks, Laura. In terms of those who have had a prescription, but with that said, the teams are doing an amazing job just in terms of the education efforts And we continue to get more and more patients or find HCPs that have BBS patients or educating to Have them also diagnosed additional patients. I would say that in terms of opportunity that remains, there still remains A large opportunity in terms of not only the fines, but also the pull through in terms of Diagnosed patients to inemcivory prescription.

Speaker 3

So lots of opportunities that still remain ahead.

Operator

Our next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Speaker 8

Hey, good morning. Thanks for taking the questions and congrats on the progress here. So just 2 from us. So I guess of the physicians that have written more than one script for BBS, I guess how long between the first script do they write the second? And I guess do you find the driver being them going out and finding more patients or just getting more with the drug and they already have patients that they're treating and then they start treating those.

Speaker 8

So that's question 1. And then the second, I guess what is left to be done to get HO patients on IMCIVRI under the AP1 system in France? And I guess how do we think about the magnitude of the impact next year on therapy from that? Thanks.

Speaker 2

Yes. Jennifer, first.

Speaker 3

Yes. So, I would say that the timing is variable because And even prior to our launch, and that took that could take time just in terms of that patient coming back in To have a dialogue with the physician just in terms of interest to get on to therapy. And then there's also others that Through our education efforts, they diagnosed the first patient and similar to rare disease, once you find that first patient, it's No longer this unicorn that's not in your practice, but something that you need to pay attention to just in terms of Differential diagnosis of additional patients that have come to them in the past or will be coming to them In the future, to remember that understanding the different symptoms to get to a clinical diagnosis is important to bear in mind. So it's a bit of a mix of both of them and both of those also impact the timing in terms of the first to the next prescription.

Speaker 2

And Jan, maybe just a little bit more color on the process for the AP1 HO and then how should we think about 2024?

Speaker 4

Yes, sure. So first of all, of course, we are very pleased with this achievement. It's very rare and to get such a pre EMEA approval in France based on Phase II data. And to be more precise, there are just 2 rare disease therapies with such So as mentioned, we are now working through the process. And to answer to your questions, these programs Administrative requirements, so we get it rented and now we have to go through a few steps.

Speaker 4

One is Agreement in terms of data collections with the Centers of Reference and the French FDA. And the second is also The centers of reference are setting up multidisciplinary decision making meetings to review the patient cases. So that's The usuals and we have been through that with Ponsilipar and also with BBS. So we know how it works and it is the same for all the rare disease drugs. So Those tests are currently we are working on them.

Speaker 4

For your second question in terms of number of patients, it's a bit difficult to say Today, what we know because we have been it has been known and we have been reached out by a lot of And we are working also with experts. There are a lot of patients who are in need and we have a lot of physicians interested to treat these patients. So as soon as we will have these administrative requirements ready, we will have the first prescriptions and the first patients will be treated, still difficult to say how much in 2024.

Speaker 2

More to come on that, Derek. We're learning here.

Operator

Thank you. Thank you. One moment on our next question. And our next question comes from the line of Dae Gon Hala from Stifel. Your line is open.

Speaker 9

Hey, good morning guys. Thanks for taking the question and congrats on the progress. 2 from us, 1 on the commercial and one on, HO. So on the commercial front, I thought it was interesting you pointed out the divergence between your experience versus Cribs, since you do have a significant proportion of prescribers being ped endos, I was wondering what kind of strategy are you thinking in terms of And just to clarify on the nomenclature, is it Your going guidance is going to be on prescriptions because you've previously talked about start forms. I just want to make sure that's what we should be looking at next.

Speaker 9

And then on HHO, if you can maybe go into the screen failure commentary a little bit more, David. I guess what are the dynamics you're seeing with regards to enrollment and how are you balancing rapid enrollment to reach that 4Q completion date and ensuring you avoid any compromises along the way. Thanks so much.

Speaker 3

Jennifer? So, sorry for clarification. The metric is the stock forms that we are focused John, and they're new staff forms, they're not repeat scripts for the same patient. And regarding your question regarding the Krebs For sure, the pediatric endocrinologist that is a treater and prescriber For Mifrey remain a key specialty focus of our teams, and that's one that our Territory managers are calling on, but we also supplement their efforts Just with a lot of non personal promotion efforts, we knew upfront that when we took a look at that Cribs Distribution of 80% less than 18 years of age that these patients do not die at 18 years of age And so we knew that there were a lot more patients either that were diagnosed and lost in the system and oftentimes they may stop going To specific physicians, so there was quite a breadth in terms of different specialties that we wanted to educate to get to those adults, which I think has been helpful in addition to the on Ground field team efforts in terms of getting to the to a distribution of patients that feels a bit More right, just based off of the age distribution of BBS patients in general.

Speaker 2

Great. Thanks. And Dae Gon, on the HO, the screen failure rate, so just to put that number a little more specifically, I think we've had 4 screen failures with over 2 thirds of the patients screened or actively in screening. And even in that Small number of screen failures. We've had at least one patient who's been brought back in to rescreen.

Speaker 2

There was a minor issue and so they may ultimately turned out to be not a screen failure. And the reason it's so low is when we started this effort and we're looking picking the We probably had a total the sites themselves had their list of patients, which were Easily more than 2 times the number of patients we needed to enroll in this trial. So they were all starting with a list of patients. They weren't looking and then they we said, they knew the entry criteria. They don't want to disappoint patients.

Speaker 2

So they're bringing in patients who they feel based on their knowing the patient That they meet entry criteria and therefore the risk of screen failure is low. So in pushing to enroll this trial, I have no fear, if We're going to have a low quality patient enrollment, meaning people are working on the edges. I think we're going to have patients who very much meet entry criteria because there's Like I said, a good selection of patients who are eager to get out.

Speaker 9

Awesome. Thanks very much. Yes, that helps. Thank you so much.

Operator

Great. One moment for our next question. And our next question will come from the line of Jeff Hung from Morgan Stanley, your line is open.

Speaker 10

Thanks for taking my questions. You talked about a couple of patients that didn't meet the 5 Weight loss, we're going through the appeals process. Do you have a sense for the proportion of BBS patients that discontinue based on the 1 year recommendation? And then how does that compare to what you've seen for the other approved mutations? And then I have a follow-up.

Speaker 3

So the patients that I referred to just in terms of not meeting the re auth Requirements for the 5% weight loss is really at this point just a handful of patients. So not many that fall into that category, but even so, because of the belief From the physician as well as the desire for the patient to remain on therapy, we are helping them through the appeals process just in terms of trying to Maintain them in terms of authorization there. You were asking a separate question, I believe, on the Continuation on therapy overall, so we now do have a larger number of Patients who have been on therapy for a longer period of time since our launch, and the discount rate To date has crept up a bit from the 10% that we had outlined to 13% of Rx's. The reasons why have not really changed just in terms of why they are this Conning, it's, I would characterize it as, almost half of them for more personal reasons, and about half of them for adverse event reasons. It is still an opportunity though for our teams just in terms of follow-up because The hyperphagia for those who are responding does come back quickly and they may consider coming back on therapy in the future.

Speaker 10

Great. Thanks. And then you mentioned that, about half or upwards of half of discontinuations are for personal reasons. Do you have any data indicating the proportion of Those who discontinued who are coming back to be treated again. And then my follow-up question was that for the prescribers who have not written more than one prescription, Are the main reasons because they're relatively new to prescribing septmelanotide or they don't have additional BBS patients or maybe something else?

Speaker 10

Thanks so much.

Speaker 3

Yes. So I'll answer the last question first. So the reasons are variable. They may only have One patient, just in terms of a lot of our scripts also is patients who are been on therapy for a shorter period of time. So that may be the case just in terms of the reason for the one script And it may also be the case just in terms of a physician having 2 patients where that patient either has not come in or is not ready to initiate therapy.

Speaker 3

In terms of the other question The

Speaker 2

personal patients in the personal reason group and have any of those

Speaker 3

I see. We don't have enough data right now in terms of that point just to outline Or I don't have it on me right now. I do know that there have been a couple of patients who Continued and wanted to restart therapy because of the hyperphagia, but it's only a handful at this point of time.

Speaker 2

The other thing, Jeff, just on the 5% in general in terms of how people experience some benefit. This is a group because of their underlying mechanism, Their inability to respond to some of the other therapy, certainly diet and exercise and some of the other medications isn't there. And so simply stopping the weight gain is a major advantage. And then as Jennifer said, the overwhelming story we've heard as we recounted on all these calls Just the quieting of their hyperphagia ability to leave the table, leave food on the table is a pretty significant change for them.

Speaker 10

Great. Thank you.

Operator

And our next question comes from the line of Whitney Eigen from Canaccord Genuity. Your line is open.

Speaker 11

Hey, morning guys. Going back to France and thinking particularly about BBS, I can you remind us, I guess, Where you are in the conversations for sort of regular way reimbursement, I know the logistics of the early access are slower than presumably it would be Once you can flip over to regular reimbursements, just curious where you are at the timing around that? Sure.

Speaker 4

Yes, Sure. So we have started the pricing negotiations with the pricing committee. It usually takes Between 9 months to 2, 3 years, we think that we will have an end mid next year or something like that. So we are in the 3rd round technically and so far it has been good from both an understanding of the unmet medical need and the Benefit from Mcl Roy and also the relationship and the openness and the transparency in the discussion. So we are at the beginning for something that should end mid next year.

Speaker 11

Perfect. Thanks. And then on 718, I guess, can you remind us, I know you've talked about it being more potent in terms of its activity at the receptor. Is the idea behind the TPP there better weight loss kind of efficacy picture or lower dosing safety profile or just how you're thinking about that? Thanks.

Speaker 2

Yes. It's actually not that including it. It's not more potent technically in terms of activity at the receptor, but it's more specific. So that's the major feature here, which is our current set melanotide. As you know, we hit both the MC4 and the MC1, Which is contributes to the hyper pigmentation and so we've removed that to it's very specific.

Speaker 2

So the probability we will have hyper pigmentation is low And we have animal data to support that. So that's the major advantage here. And then of course it's weekly, so we have convenience and of course we have an IP Protection that goes out to 2,041. And so, those are the major elements that make this a really critical program for us.

Speaker 11

Great. Thanks very much.

Operator

One moment for our next question. And our next question comes from the line of Joseph Springer from Needham. Your line is open.

Speaker 8

Hi, good morning. Thanks for taking our question. With regards to the upcoming Phase 3 readout in the 2 to 6 year old DBS patients, just curious Through all the patient identification work that you've done for BBS to date in the U. S, how many You estimate are in that 2 to 6 year old range and would you expect to see sort of the bolus or how do you think that would impact The launch, if and when the label is expanded to include those patients?

Speaker 2

Yes. So maybe I'll lead and Jennifer can add anything here. I think, a, it's not a large number of patients. What we see is a higher hit rate when a 2 to 6 year old group is screened That very early onset is obviously the history is very good there. They have true early onset obesity.

Speaker 2

And so, The screening hit rate is a little bit higher in that group. And so that's an important part of this number 1, but it's not a large number of patients. So there won't be a big impact to the overall patient population. But I think what's really important about this, A, it's a genetic disease, you want to treat all patients getting in early is hugely important. So Medically, I think this is very important and it also builds, I think, an increasing recognition about what differentiates these diseases and the need to manage And think about them differently.

Speaker 2

So it will help us in different ways, but the absolute number will not be large.

Speaker 8

Great. Thank you for taking our question.

Speaker 2

Sure.

Operator

Thank you. I'm not showing any I'd like to turn the conference back to David Meeker, Chairman, CEO and President for closing remarks.

Speaker 2

Thanks, Victor. So thanks again everybody for tuning in and excited about the progress we're making as you've heard and we very much look forward to seeing everybody or People will be able to either show up in person or call into our R and D Day on December 6, where we have Updates, we'll have a hypothalamic KOL from our hypothalamic obesity world. So that will be interesting in addition to The data updates on our 718 program, the DAYBREAK trial and we will provide the data on the pediatric trial at that time. So with that, we'll sign off. Have a good day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

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Townsquare Media Q3 2023
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