Endeavour Silver Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 8, 2023

There are 15 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Bluebird Bio Second Quarter Results and Commercial Launch Progress Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ms.

Operator

Courtney O'Leary, Investor Relations. Please go ahead.

Speaker 1

Good morning, everyone, and thank you for joining today's call. I am Courtney O'Leary, Investor Relations at Bluebird Bio. Before we begin, let me review our Safe Harbor statement. Today's discussion contains statements that are forward looking under the Private Securities Litigation Reform Act of C95, including expectations regarding our future financial results and financial position in addition to statements about the company's plans, expectations or intentions regarding our business, regulatory progress and commercialization plans. Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results differ materially from projected results.

Speaker 1

A description of these risks is contained in our most recent Form 10 Q and our other filings with the SEC, which are available on the Investor Relations section of our website, www.bluebirdbio.com. With me on the call is Andrew Obenshane, our CEO, who is going to provide some opening remarks on Bluebird's strategic position in Visum and then review our Q2 results. Then Tom Plimach, Chief Commercial and Operating Officer, will dive deeper into the positive momentum in our commercial launches and highlight the Lova They will then be joined by Chris Krawchuk, Chief Financial Officer and Rich Colvin, Chief Medical Officer for Q and A. With that, I will turn the call over to Andrew.

Speaker 2

Thanks, Courtney, and good morning, everyone. I want to ground our call this morning on why we're here. A few weeks ago, we heard from a young adult with sickle cell disease who was treated in our HGV-two zero six study. This was a real privilege. Reflecting on life Gene therapy, she shared, it's amazing.

Speaker 2

My mind is open to the world of possibilities. So much is in front of me that I want to accomplish. There's so much more for me than one of my previous medical teams had envisioned for me themselves and I'm excited about it. And this is why we're here and what We mean we talk about bringing patients and families more Bluebird Days. Over the past decade, Bluebird has established Ourselves as a gene therapy leader, proving our clinical, regulatory and commercial capabilities.

Speaker 2

Clinically, we have the longest And most robust gene therapy program in the field with over 180 patients treated across 8 clinical trials with up to 9 years of follow-up and over a decade of gene therapy research. We have an established regulatory track record with 2 FDA gene There are be on market in the 3rd BLA currently under priority review. And now we are making strides commercially, Actively launching, achieving reimbursement and treating patients with 2 therapies today. We occupy a unique strategic position in the gene and cell therapy industry. There are only a small handful of companies, all large cap They currently have the commercial and cell and gene capabilities that we do.

Speaker 2

On the opposite side of the spectrum, there are more than 250 companies Studying gene therapies preclinically or clinically who lack a gene therapy infrastructure with new companies being formed every month. We believe that with our unique capabilities, Blue Bird is in an attractive strategic position as one of the only standalone commercial gene and cell therapy companies. Our extensive platform of gene therapy expertise includes manufacturing experience, particularly with viral production and cell processing, more than a decade of R and D experience and an established commercial infrastructure. Our strategic vision for the future is clear, to evolve into an industry leading gene therapy company with opportunity for expansion and growth for years to come. We have put in place the pieces that we need to be a successful biotechnology company.

Speaker 2

We are on a path to profitability in the near term and anticipate additional growth and scale in the next 5 years. We conservatively estimate a combined multibillion dollar revenue opportunity in the U. S. We have a focused commercial footprint with the ability to cover U. S.

Speaker 2

Transplant centers with a relatively modest with effective field presence. At scale, we estimate a gross margin of at least 70% as we invest in manufacturing quality capacity. And my comments pertain only to the U. S. There's also significant upside potential with wholly owned global rights for all three therapies, particularly for ZINTEGLO and LOVASOL.

Speaker 2

I will move now to how our business is performing today and the updates from the Q2. I will summarize the highlights and additional details can be found in our Q2 released this morning and in our 10 Q. First, it's incredibly exciting to be here, almost a year after the FDA approvals since Integlo and Skysona. Initial traction we are seeing in these launches is a testament to the robust commercial viability of our platform. For ZYNTEGLO and SKYSONA, We have 16 patient starts to date.

Speaker 2

And assuming all of these collections results in infusions, this translates to a potential $45,000,000 Gross revenue over time. We see that continue to accelerate quarter over quarter. Our therapies are being covered by insurance There have been no ultimate denials from commercial or government payers for either therapy. And we've activated 15 QTCs, qualified treatment centers, which is sufficient for the Skisonin and Integla launches, but we anticipate an aggressive ramp up to 40 to 50 QTCs by year end to support the potential launch of LovaCel next year. Looking ahead to LovaCel for sickle cell disease, we have the opportunity to make a tremendous difference In June, our BLA was accepted and granted prior review by the FDA for the treatments of patients 12 and over with a history of vaso occlusive events or BOEs.

Speaker 2

At this time, the FDA has not requested an advisory committee meeting. Keep in mind, this is the 3rd LVV gene therapy they've reviewed from Blue Bird, which gives us great confidence. And we look forward to a decision from the FDA by the end of this year for the PDUFA date of December 20 and anticipated commercial launch in early 2024. Additionally, the value of our therapy and need for rapid Equitable access for patients is already being recognized. Just a few weeks ago, ISA reported that LovaCel is cost effective up to a price of $2,260,000 In fact, ICER rated Lobocell's clinical effectiveness more favorably than direct competitors compared to current standard of care.

Speaker 2

And financially, we are confident in our lean and efficient business model. We are focused on one mission For the quarter, we reported $6,800,000 combined product revenue for Syntego and Skysona. As of June 30, we had $291,000,000 in cash, Cash equivalents, marketable securities and restricted cash. We remain on track with our full year 2023 Cash burn guidance in the range of $270,000,000 to $300,000,000 and continue to prudently deploy capital to make investments to maximize Stakeholder value as we launch ZINTEGLO and SKYSONA and prepare for the launch of LOVASEL. We continue to estimate that we have a cash runway for the Q4 of 24, including the restricted cash.

Speaker 2

As previously disclosed, this estimate of cash runway includes approximately $45,000,000 restricted cash, which is currently unavailable for use. Without the release of our restricted cash, our runway is through the Q2 of 2024. Now, I would like to turn the call over to Tom to dive deeper into our commercial launch progress and momentum in greater detail.

Speaker 3

Thanks, Andrew, and good morning, everyone. Almost a year ago, we discussed our first commercial launch plans following the ZYNTAGLO approval. It's exciting to be here this morning to dive deeper into the progress we have made since then to bring our one time treatments to patients. We are forging the commercial model for ex vivo gene therapy in the U. S.

Speaker 3

And this quarter we continue to make great progress across the key pillars of our launch, including patient demand, qualified treatment center or QGC onboarding and access and reimbursement. We want to give some additional insight into the launch dynamic for ZINTEGLO and how the foundation we have built has laid the groundwork for commercial growth that is projected to accelerate quarter over quarter. In August 2022, We said we would launch ZINTEGLO with 5 Wave 1 QTCs, which we accomplished by the end of September. Today, every one of those QTCs have started a patient and in fact most of these centers are treating their second, 3rd or even their 4th patient. Our Wave 2 QTCs or Next V were activated by the end of last year And we are excited to report that 40% of our Wave 2 QTCs have started a patient with the rest on track to start a patient in the coming months.

Speaker 3

We are currently activating our Wave 3 QTCs. These centers have more recently been onboarded and are in the process of patient identification, enrollment and scheduling. We are building trust with our QTC network and they are gaining incredibly valuable experience. They are understanding our process better. They are identifying interested patients and have become more familiar with the reimbursement process.

Speaker 3

This all lends to an acceleration of our QTC activation, which is expected to bring the time to activation down for months for ZINTEGLO to weeks for Lovicel and we remain on track to scale the Bluebird QTC network to between 4050 by the end of this year and will likely continue to expand into 2024 to ultimately reach more patients. The ZYNTAGUA launch is progressing exactly how we would expect an ex vivo gene therapy commercial launch would, with trajectory gradual and linear and momentum continuing to build over time. Now if we flash forward to early next year, these centers will be able to leverage their experience from administering ZINTEGLO and are anticipated to be ready to treat individuals with sickle cell disease soon after the low cell potential approval, further capitalizing on our 18 month head start on the competition. Delivering a consistent and reliable manufacturing process is a key part of delivering gene therapy and is essential for physicians, providers and for patients and their families. And as a reminder, a key element of ex vivo gene therapy is that the transplant center is an integral part of the supply chain.

Speaker 3

We have built a strong reputation with these sensors through our commitment to transparency and partnership throughout the entire process from QTC onboarding all the way through patient infusion. For ZINTEGLO post cell collection, it takes on average 70 to 90 days to manufacture, test, Release and then deliver the therapy back to the hospital. The infusion of ZINTEGLO is driven primarily by patients, physicians and their schedules. And at this phase of our launch, we continue to focus on patient starts as the lead indicator with the expectation, as Andrew noted earlier, that starts translate to revenue as the treatment process and infusions are completed. And currently, Bluebird recognizes revenue upon infusion.

Speaker 3

This process will largely be the same for LovaCel and for other ex vivo gene therapies in this space and is yet another example of where Bluebird is leading the way. Transitioning to Lovacell for sickle cell disease. Before I talk about our launch preparations and the commercial opportunity, I want to remind everyone of the transformative impact of the therapy seen in clinical trials. Our clinical data reflects the most robust Data available with the longest follow-up across any gene therapy program for sickle cell disease. More specifically, Our BLA package includes efficacy data from 36 patients with a median of 32 months of follow-up and safety data from 50 patients treated across the entire LoboCell program.

Speaker 3

From our August 2022 data cut, we showed 97% complete resolution of severe vaso occlusive events through 24 months and the majority of adverse events attributed to underlying sickle cell disease or conditioning with busulfan. We continue to work with the FDA through their view of our package and we look forward to our PDUFA on December 20 this year. Preparations are well underway for the commercial launch in early 2024 if approved. The unmet need for these patients is great. Sickle cell is a devastating disease that has historically been ignored and its severity underappreciated.

Speaker 3

We have performed more than 7 years of market research with sickle cell treaters, transplanters and with patients, which has consistently demonstrated that Lobocell is a meaningful treatment option for patients, giving us great confidence in the significant opportunity ahead. Starting on the left hand side of the slide, we have consistently seen strong patient excitement for gene therapy and we have found that more than 70% of patients would consider gene therapy if recommended by their doctor. Demand and eagerness for gene therapy is clearly there and continues to grow. Moving to the middle, one of the greatest misperceptions is that patients and providers are partial to one modality over another. The research simply does not show it.

Speaker 3

In fact, market research shows that more than 70% of patients We'll make the treatment decision based on efficacy and based on long term follow-up, but not based on modality. This is a key differentiating point for Lovacel, which has the longest and most robust clinical and safety profile of any gene therapy for sickle cell disease. And finally, to our market research over the years, we have seen Lobocell capture between a 50% to a 65% market share against a direct competitor. This was established after respondents reviewed both product profiles And then we're asked which one they would prefer if both were available on the market. All of this market research is coupled with a decade long partnership between Bluebird And I talked earlier about our key pillars of our ZYNTEGLO launch, including patient demand, Our QTC network and access and reimbursement, and I'm pleased that we're already making great progress on these pillars and finalizing the launch readiness for Lovacel.

Speaker 3

We are excited about the clear patient and physician demand as evidenced by the research I just discussed and we will continue to partner with the patient To broaden education around gene therapy, our QTC network is growing and continues to become more efficient, gaining experience and momentum. And finally, access to gene therapy is critical for patients. Bluebird continues to lead the way on value demonstration And in working with government and private payers on our innovative payment models and we're excited about continued positive feedback from target payers on clinical value for unmet medical need and on our outcomes based approach. We are confident in our therapies. We are confident in our strategy and we are confident in our team and we are making a difference in the lives of patients today and laying the foundation for many more to come.

Speaker 3

Now back to Andrew.

Speaker 2

Thanks, Tom. Before closing out the call, I want to spend a few minutes on SkySona. As I mentioned earlier, we've completed 5 patient starts, activated 4 QTCs and received no ultimate denials from government Commercial payers to date for SKISANA. It's critical to remember that cerebral adrenoleukodystrophy is a very different disease than our other disease areas. While the financial impact of SKYSONA is not material to Blue Bird, the impact it can have on the lives of patients and families affected by SkySona was approved based on a 24 month improvement in major functional disability free survival.

Speaker 2

These measures include the ability to communicate, the ability to see, requirement for tube feeding, total incontinence, wheelchair dependence and the loss of voluntary movement. You can imagine the profound impact the loss of these functions has on patients and their families. The label for SKYSOTA includes a boxed warning for hematological malignancy as 3 boys treated in our clinical trials develop myelosplastic syndrome, MDS, which is believed to be caused by insertion of Valenti D vector. In July, we reported 2 additional cases of MBS in patients who are treated in our clinical studies, bringing the total number to 5 cases. And given the known risk, we do anticipate additional cases may occur.

Speaker 2

Nevertheless, we continue to believe that SKISANA remains an And given the difference in the vectors, we do not believe this is any read through into our broader LVV platform, including ZINTEGLO or LOVACEL. The rest of 2023 and the beginning of 2024 are shaping up to be an exciting time for LUBAR. For ZENTAGMO and LOVACEL, we continue to aim to scale 40 to 50 QTCs by the end of 2023. And for SKISONA, we continue to anticipate 5 to 10 patient

Speaker 3

We also look forward to

Speaker 2

the LOVASELL PDUFA date on December 20, 2023. And as Tom touched on, we are Actively preparing for the commercial launch expected in early 2024 is approved. Before moving to Q and A, I want to summarize some key points. First, Bluebird occupies a unique strategic position as a leading gene therapy company that's going to enable growth and expansion for years

Speaker 4

to come.

Speaker 2

2nd, we have a strong competitive advantage preparing to maximize our 18 month head start against our next competitor with patient starts accelerating, QCC onboarding becoming more efficient and projected Lova cell market share of 50% or more. And finally, with commercial momentum, Including 16 patient starts to date and the LOVEST LBLA under priority review, we are on a path to profitability in the near term, anticipate additional growth and scale over the next 5 years. Thank you for your continued support from Blue Bird and for the patients and families we aim to serve. With that, I'd like to open it up for questions

Operator

Your first question comes from the line of Dane Leone from RJS. Your line is now open.

Speaker 5

Hi, congratulations on all the progress and Momentum with the early launches of Skysona and Zenteglo. Could you maybe just expand a little bit in terms of what you're seeing at the top of the funnel With referrals into the current QTC base that you've built up for ZYNTEGLO and just What you're starting to find out now and more recent trends around that referral process then translating into patients that start to undergo the process for Cell collection and ultimately treatment. Thank you.

Speaker 2

Thanks, Dane. Good morning. I'm going to ask Tom to answer that question.

Speaker 3

Yes. Hi, Dane. Good morning. As we've talked about historically, all of our QTCs are a little bit different. In some cases, They have their own pent up demand of patients who are excited about Zintaglo and so they're actually working through their internal Patient load before they're starting to think about accepting referrals from outside the QTC.

Speaker 3

Other QTCs are both actively treating patients within their QTCs, But also taking referrals from outside the QTC. And as you can imagine, it's exciting for the QTCs to be offering first of gene therapy, but also exciting for patients. The process does take some time. It takes time to get through patient identification and then the medical workup And then to get enrolled into the program, but we're excited to see both QTCs burning through their initial patient loads, but also starting to think about referrals from outside their

Operator

Your next question is from the line of Dina Ramadain from Bank of America. Your line is open.

Speaker 5

Hey, guys. This is Jason. Can you talk about maybe the learning so far in the launch? What's been the biggest barriers as you go from collection to infusion? Like are you losing any patients?

Speaker 5

And if so, why? And then have you guys discussed with payers the value based model that you use with Cinteglo and LSL as it pertains to the

Speaker 2

Good morning, Jason. And Tom again, if you would take that question. Yes. Just to start with

Speaker 3

the funnel, Jason, good morning. We aren't really Seeing a lot of patients fall out of the funnel, so to speak, what we're seeing is that a lot of this will depend on both the physician schedule and Patient schedule because betathalassemia is not necessarily an acute disease that allows for some flexibility with scheduling. And so in most cases, when we see patients enter the funnel who are interested, they don't necessarily fall out. It just takes a little time And in some cases that happens relatively quickly. In other cases, patients will schedule around a major event like a wedding or A dance or something like that, that they want to get through before they start treatment.

Speaker 3

So again, it's a small end, so we're not ready to make huge predictions on Fall out percentages, but right now we're encouraged because we're not seeing a lot of patients fall out. They just take time to get through the treatment process. Moving on to the value based approach for sickle cell, We're extremely thrilled with how the process went for beta thalassemia with Integlo and we've received a lot of positive feedback from payers, both government Payers and private payers on our approach. However, the approach for ZINTEGLO will not be the same approach that we're taking for sickle cell disease. We've done a lot of work with the same payers to understand what might work in a population that's a much larger population with different Clinical expressions and different outcomes and we're excited to say that we finalized the details around what our outcomes based agreement is going to look like We, as you might understand, are not going to share those details at this time, but we'll show more details as we get closer to approval.

Speaker 3

But We believe that an outcomes based agreement that fits the purpose for payers and for patients with sickle cell disease is absolutely necessary.

Speaker 5

Got it. Can I squeeze in a follow-up? Sure. The comment on gross margin 70% or higher, I guess I would have assumed that the pricing that you guys have that maybe it might have been a little closer to 80%. Can you talk about the royalty stack on ZINTEGLO and Lobocell, I know there's like a number of different entities, low single digits.

Speaker 5

I wondered if you could sort of give us a sense of how much the royalty stacks are on those two products Thank you, Motive.

Speaker 2

Let me go to Pam to Tom, who will then comment then Chris.

Speaker 3

Yes. Just to remind you that with ZYNTAGO, we're focused on the well, SkyStone is pretty brief. With SkyStone, we are not discounting or offering any outcomes based agreement. There is a Medicaid discount of approximately 17% for pediatrics in Skysona. With Synteglo, we did offer an outcomes based agreement that was tied to transfusion independence.

Speaker 3

It was a very simple outcomes based agreement where if a patient Did not achieve transfusion independence or maintain transfusion independence, we would rebate up to 80% of the cost. Again, it was just a one time upfront payment and then a rebate if a outcome was not achieved or maintained. Keep in mind that our clinical trials approximately 90% of patients achieved transfusion independence and of those who achieved it 100% maintained it. So I'm giving you a little bit of background there because we don't expect there to be a huge impact on gross to net for ZINTEGLO and for SKYSONA. And before I turn it over to Chris, it's Too early to comment on sickle cell disease with Lobocell.

Speaker 3

Chris?

Speaker 6

Look, as it relates to your question on royalties and milestones, I don't think that that's going to be a material component from a go forward basis. There will be commensurate milestones that you saw Q3 of 22, we had milestones associated with approval. The royalty drag on these products are not going to be significant as it relates to your modeling.

Operator

Your next question is from the line of Eric Joseph from JPMorgan. Your line is open.

Speaker 7

Good morning. Thanks for taking the questions. I guess just clarifying the I guess the revenue breakdown for this quarter, can you just kind of articulate how many patients are reflected in the 6,800,000 And what if any latency there is between perhaps a patient being treated and revenue recognition this quarter? And then I guess just tracking sort of the cadence of new patients coming into queue, it seems like You've added 4 new patients this past month since your prior corporate update. I'm just wondering whether we should expect this Katie, do you have new patient adds to continue or accelerate perhaps going into second half?

Speaker 7

Thank you.

Speaker 2

Let me good morning. Let me take the second part of that question first just quickly, then I'll ask it to Chris to comment on the revenue. So we do expect to see a linear growth over time. We're not going to we're not forecasting out right now. We're not We do expect a linear growth as we had predicted for this launch and that's what we're seeing right now.

Speaker 2

Chris?

Speaker 6

Look, we're Encouraged by the revenue that's recognized. However, I want to remind folks that the KPI for the company is really patient starts and that's where we want to continue to focus your attention Given where we are in the progress of our launches. So we see continued growth as it relates to our patient starts Both Synteglo and Skysona, we're not going to report exact byproduct infusion numbers. And just as a reminder, certainly As Andrew and Tom has touched on, patient starts will ultimately then translate into revenue at some point in time. And that's why the KPI for the company that we're providing to the investor community is the patient starts.

Speaker 7

Okay, got it. A follow-up if I could. Just given the incremental color we've had on the LACell review cycle, I'm wondering if you've similarly been Notified about a potential adcom for Lobocell. I guess what's your expectation of an adcom throughout the current review cycle? Thank you.

Speaker 2

Yes. So at this time, the FDA has not requested an advisory committee meeting.

Speaker 7

Okay. I appreciate the taking the questions guys. Thanks very much. Thanks, Eric.

Operator

Your next question is from Gena Wang from Barclays. Please ask your question.

Speaker 8

Thank you. Maybe I'll just follow-up also regarding the Adacom question. When was the last time you discussed with the FDA? And also when will be the next time you will be talking to FDA? And then regarding I still wanted to understand the exact timing for the patient received the starts forms, and you see the drug product complete, usually how long does that take?

Speaker 8

You mentioned 70 to 90 days that's test from test to completion of the manufacturing. But if we counted it from the start form, How long does that roughly estimate that will be? And then the third question quickly is on Sysana. You did mention that there is a 5 patient has MDS events. Were the patient community well understood This is a Skysona specific risk and there is no label or anything comment on the potential risk with ZYNTAKLO or hopefully in the future in the label for LOVAZAL as well?

Speaker 2

Let me take break those down. On the first one, we're not going to comment on back and forth with the FDA. We just don't comment on When our cadence communication is there, all we can say is at this time the FDA has not requested an advisory committee meeting. Then I'll hand it to Tom to talk about the time from the patient start forms to the drug product manufacturer, Then I'll comment on SkySana. Go ahead, Tom.

Speaker 3

Yes. Hi, good morning, Gena. What we're seeing is that the most predictable part is clearly the time from cell collection to the time of Drug delivery back to the hospital, which is the 70 to 90 days on average. What we're seeing on the front end and on the back end is there is some variability and some flexibility. In some cases, we're seeing patients who are eager to be treated to move through that process very quickly.

Speaker 3

As part of that process, The qualified treatment center has to get a prior authorization from the insurance company to treat the patient. On average, that prior authorization or PA is taking about 2 weeks. So the other pieces really depend on the patient's schedule and the schedule at the qualified treatment center. And then The other part that's a little bit variable based on patients and physicians schedules is after we deliver the drug product, It's up to the patient and the physician when they actually infuse ZYNTABLO and SKYSONA. So there's a little bit of variability there.

Speaker 3

However, what we're seeing is that they're motivated to infuse as soon as they can for a lot of reasons. Number 1, they're usually scheduled the patients in advance. Number 2, they usually have A limited time where they get an approval from the insurance company. And then just I think everyone is motivated to get through the process. So Again, the most predictable part is cell collection to drug delivery.

Speaker 3

The other parts we will get more data as we mature through our launch, but right now it's a little bit variable.

Speaker 2

Thanks, Tom. And then going back to SKYSONA. SKYSONA uses a different vector than our other therapies. As a result, we don't believe there's any read through to our broader LVV platform, including ZYTEGLO or LOVACEL. Just to remind you there have been no cases of insertional Genesis and other programs, the 2 therapies are manufactured using totally different lentiviral vectors.

Speaker 2

Different vectors are designed specifically for expression in different cell types. They utilize different promoters. As a result, they have totally distinct

Operator

Thank you. And your next question is from Jack Allen from Baird. Please ask your

Speaker 4

question. Great. Thank you so much for taking the questions. Just two quick ones from our end. I was wondering if you could step back and think about the AdCom dynamics as it relates to FDA and provide some historical context.

Speaker 4

At this point in the cycle, Did the FDA notify you of the ZINTEGLO income? Or I guess do you have any historical context surrounding that interaction? And then briefly, more of a logistical question. On the restricted cash, can you just make us aware of what the restrictions are on unlocking that cash and extending the runway? Thanks so much.

Speaker 2

Yes. Good morning, Jack. I'll take the first part of the question and then hand the second to Chris. On the adcom, we had heard at this Time point from Special Events Integlo about the advisory committee. We have not at this time the FDA has not requested advisory committee for Lovacell.

Speaker 2

They always could. So that there's no time bound requirement to the FDA for notification. Chris, do you want to comment? Sure.

Speaker 6

The restricted cash predominantly relates to letters of credit as it relates Some of our real estate that we occupy. The predominance of the restricted cash relates to an arrangement for A lease for 50 Binia property in Massachusetts. We leased that from Sanofi. That's approximately $41,000,000 We then subleased that To Meta, and in lieu of Meta going direct with Sanofi, which would release the restricted cash, We continue to collect sublease income on that sublease. That sublease income is recorded in other income in our financial statements.

Speaker 6

Of course, the operating lease is recorded above the line in our operations. The release of the restricted cash is really dependent upon going direct Having MediGo Direct with Sanofi or getting clearance from Sanofi to release that restricted cash, but it's actually tied up until the remainder of that lease Absent any agreement that we've got from those two companies, which we are actively trying to pursue.

Speaker 4

Great. Thanks so much for the color.

Operator

Your next question is from Salveen Richter from Goldman Sachs. Your line is now open.

Speaker 9

This is Anumeet on for Salveen. Thanks for taking our question. Could you help us understand the cadence of QTC activation? Last quarter, you have announced around 13 and then this quarter, it's 15. I guess is this pace in line with your expectations and what are the gating factors to getting to that 40 to 50 by year end?

Speaker 9

And then I just have a second question on just the overall characteristics of the patients that have undergone cell collection. Do they are they more younger patients or are there also adults being treated? Thank you.

Speaker 2

Thanks. Tom, go ahead and comment on the QTC activation and then the patient ages.

Speaker 3

Yes. Hi, good morning. It's a good So we our QTC network was designed our onboarding process was designed first to establish our network for the launch of ZINTEGLO Mostly and then a few centers for Skysona. And then as we moved into our Wave 3 and Wave 4 activations, obviously, we looked at Synteglo, but The focus is really becoming preparation for the Lobo cell launch in sickle cell disease. So we're very pleased to have gotten to 15 QTCs.

Speaker 3

If you look at the way we've structured the waves, we expect the bolus of QGC to come on in the coming quarter and we still feel confident that we'll get to between 40 50 By the end of this year, I do believe that since the BLA has been accepted by the FDA That QTCs are indeed more motivated and excited about the possibility of having a treatment for sickle cell disease. So we're seeing QTCs in general Start to move faster. And again, we're excited to see that at least most all of the Wave 1 and most a good proportion of the Wave 2 QTCs are already treating patients. So We feel good about the progress. It's going to plan and we look forward to scaling to between 4050 between now and the end of the year.

Speaker 3

And then cell collection characteristics. I think the most interesting thing, I'll just say it's too early to give Common characteristics, we see a wide range of interest from younger patients to older patients from Many different states throughout the United States from outside of the United States. So it's really difficult right now to say that there's 1 or 2 characteristics that we're seeing When we see the interest for in the future as we get bigger ends, we might be able to nail down more specifics. But Again, it's encouraging that we're seeing a wide range of interest from a wide range of patients.

Speaker 9

Thank you.

Operator

Your next question is from the line of Yaron Werber from TD Cowen. Your line is now open.

Speaker 10

Hi. This is Brendan on for Yaron. Thanks for taking the question. Just a quick one from us. And sorry if I missed this earlier, but kind of looking ahead to LOVAS So launch, to a little bit of launch.

Speaker 10

Really kind of just wanted to get your thoughts on maybe the initial stages of the launch itself. Are there Maybe certain patient subsets or centers or geographies that you think are particularly low hanging fruit specifically for gene therapy that could maybe kind of Crack the door open to broader uptake long term, really just kind of trying to get a sense of what your initial sales strategy is for once you hit

Speaker 2

the market there? Thanks.

Speaker 3

Yes. Good morning. Thank you for the question. We're excited about the Lova cel launch. We've been really looking at what the launch will look like as we study Kind of not only geographically where patients who have sickle cell disease live and where our treatment centers are going to be activated.

Speaker 3

Certainly within those treatment centers anecdotally there's a huge unmet need. In some cases they some of these QTCs are doing clinical trials and many patients they can't even if they have a backlog just for this clinical trial. So they're really excited about having another option available commercially As soon as something is FDA approved and we look forward to Lovacel's potential FDA approval. We look at a number of things including probably most importantly, we're high Patient population for sickle cell disease throughout the United States is present and then we look at QTCs who are willing and set up to treat sickle cell disease and they understand sickle cell disease, so they need at least a baseline Expertise, because sickle cell is different than some of the other transplants and other therapies that they've used historically. And then we look at their commercial viability.

Speaker 3

And in some cases, some of the QTCs want to remain clinical trial sites. In other cases, they're pretty savvy when it comes to commercial launch. And so we plan to have a broad network across the country. Our goal is to ultimately provide access Any patient in the United States who needs to be treated and the 40% to 50% gets us into a close proximity of about 95% of the patient population.

Speaker 10

All right, great. Thank you.

Operator

Your next question is from Luca Easi from RBC Capital. Please ask your question.

Speaker 11

Great. Thanks so much for taking my question. Just two quick ones here. Maybe on sickle cell disease, what are your expectations for the label? In particular, do you anticipate that the label will include patients between 12 18 years of age?

Speaker 11

The reason why I'm asking, I believe your competitor does not have patients In that subgroup, for the primary efficacy set, at least from the data at EHA. So wondering if it's plausible that you'll get a broader label than your competitor? And if So what are the implications for the launch? And then maybe for the runway, can you just remind me, if you do get approved for sickle cell disease, Will you receive the PRB? And if so, are you planning to monetize it?

Speaker 11

Thanks so much.

Speaker 2

Right. Thanks. So I'm going to share it for Rich for the first part and Chris for the second. Yes. Thanks, Andrew, and thanks, Luca, for that question.

Speaker 2

Yes, we submitted the BLA for the treatment of patients who are between 1218 and over. In that matter, we included patients between 1218 both in our study HGV-two zero six Group C as well as in Study 210. So for that reason, we have patients who are in that age range and have seen the results from those patients. And I'll turn it back over to Chris. Thanks.

Speaker 6

As it relates to the PRV and given Rich's comments, it's possible we could receive a PRV since slobasol BofA was accepted for priority review for patients 12 and over. However, as it relates to whether or not we'd monetize it, we of course would look at the market, Evaluate the opportunities in the market and then make a decision based upon what we see there. I don't want to comment today on whether or not we'd monetize it Or not until we know whether or not we'd get a fair price for it. And just as a reminder, the PRV is not factored any potential PRV is not factored into our cash runway.

Speaker 4

Got it. Thanks so much.

Operator

Your next question is from Jeff Hung from Morgan Stanley. Please ask your question.

Speaker 12

Hi, good morning. This is Catherine on for Jess. Thank you for taking our question. We just wanted to ask if there are any learnings from Syntyclo or SKYSONA or other gene therapy launches that you plan to apply to Lobocell launch either in terms of strategy or from an operation or commercial

Speaker 3

standpoint. Yes. Hi, good morning. We obviously, one of the big advantages that we feel that we have right now is we have Almost a year now was Entaglo, so we've certainly learned a lot over the last year. Many of those learnings we believe we can apply to make a more efficient operational process for Lobocell.

Speaker 3

I'm not going to get into all the details on this call today. But as I mentioned before, not only is Bluebird becoming more efficient and nimble, The QTCs that we're working with are becoming obviously value partners and more efficient and nimble. Looking at How we design the QTC network, obviously that was a strategic move on our part to design a QTC network that serve both Syntaglo and Lovicel synergistically. And probably one of the most important learnings is our how we had thought about our value based approach to setting the price For ZYNTAGLA, we'll follow that same value based approach when we think about the price of lowicel and translating that into access for patients. We learned a lot through the process as we got ready for Zentaglio about what an innovative payment model could look like.

Speaker 3

We've taken some of that momentum and applied some of those same partnerships to learn about what an outcomes based agreement for Lobocell and sickle cell could look like. So it won't be the same, but we did use a lot of the learnings from our first launch and feel that we've gained great momentum, Obviously, with the patient community, great momentum with our QTCs and then feel very confident in the way we're thinking about pricing and outcomes based agreements for LOVESO.

Operator

Your next question is from the line of Mani Foroohar from Leerink. Your line is now open.

Speaker 13

Hi, good morning. This is Lily on for Manny. Just maybe a follow-up question on the restricted cash linked to the property lease. Would you mind reminding us the reminder of I'm on the leaf and would you expect that to fall in the 2024 kind of guidance for Cheshire and Way? Thank you.

Speaker 4

Okay. So I'm going to

Speaker 6

ask you to repeat the second question. Let me answer the first because I couldn't exactly hear you on the second part of the question. As it relates to the first, it's a 10 year lease and the remainder is approximately 7 to 8 years. Can you repeat the second question? 2nd part of your question.

Speaker 13

That also answers the second part. Thank you.

Operator

Your next question is from the line of Yanan Zhu from Wells Fargo. Your line is now open.

Speaker 14

Hi, thanks for taking our questions. So Of the 11 patient starts for Zentaglo, how many of them are from the Wave 2 QTCs? And also wanted to ask about the linear trajectory comment. I think last quarter as of May 9, you had 7 patient starts for LENTEKALO. This quarter is 11.

Speaker 14

Could we infer from the linear trajectory comments next quarter it might be another 4 and so on? And then a question on the low volcel pricing. You made a comment about the ISR suggested price. I was just curious When you make the decision for pricing, is it more To be on par with Lanteglo or would you target a lower price to accommodate the larger patient population? Thank you.

Speaker 2

Yes. Thanks. I'll take the second part of the question first and then Tom, the first part. On low sulph pricing, we're just not going to comment yet. It's way too early.

Speaker 2

And that will be around launch when we discuss pricing. Go ahead, Tom.

Speaker 3

Yes. And maybe to add to that, obviously, we're going through the process right now. We're going to base our pricing decision on The profound benefits that we believe Lofisel has in sickle cell disease, obviously, it's a devastating disease and we're looking at the process. Similarly that we looked at the process for ZYNTAGO. So we're in a good place, but again we're not going to comment on the final price.

Speaker 3

As far as the launch, we've said all along that it will be kind of linear Gradual, the thing that I'll add to that is it's tied to QTC activations. And I'm not going to give the breakdown of the number of patients coming from wave 1 versus wave 2, but the way to think about it is that Wave 1 QTCs are now most of them on to their second, third, 4th patients, Whereas the Wave 2 QTCs are getting through their first patients, but we would expect that to be kind of a build over time, whereas new waves of QTCs come on. They're finding new patients while the QTCs that have been on for a while are getting through not only the patients that are in the QTC, but also starting to accept referrals from outside the QTC. So we're excited about the demand that we're seeing and we're excited about the momentum that is starting to build.

Speaker 14

Thanks for the color. If I may squeeze one question about payer mix. If we look at the $6,800,000 revenue, Could you comment on these patients are paid by government or commercial or a mix of both? Thanks.

Speaker 2

Go ahead, Chris.

Speaker 6

Look, the current payer mix, as we've seen it today really ties to the I would say the onboarding of the QTCs and the function of the patients that they were providing. So currently, we're seeing a little bit higher indexing towards Medicaid, but we continue to believe the stats and the characteristics on the payer mix that Tom had described earlier in his comments.

Speaker 3

And I will just add one thing to that. We've seen patients go through the process and receive and QTC is receiving reimbursement from both private payers and So we're encouraged to see progress, not only with private payers, but with Medicaid.

Speaker 14

Great. Thanks for all the answers.

Operator

Your next question is from the line of Sami Karen from William Blair, your line is now open.

Speaker 9

Hi, thanks for taking my question. This is Brooke Shuster on for Sami. So given that Lobocell and ZINTEGLO follow a slightly different manufacturing process, how do you see this affecting the Thank you. The launch of LOVOELL differently than the first two products.

Speaker 3

Yes. Hi, this is Tom. I'll start with kind of the last part of your And then work my way backwards. The biggest difference with the Lobocell launch will be how you think about Q2C activation. And again, starting from scratch or starting with the baseline, it takes months to onboard a QTC and a lot of that process includes a legal agreement between us and the QTC and a quality agreement between us and the QTC.

Speaker 3

So that takes time. What we've done strategically with ZINTEGLO is we've designed our agreements so that they apply to both ZINTEGLO and LoboCell. So the reason we're trying to get to between 40 50 QTCs this year is to both the opportunity for ZINTEGO, but to make it a smoother transition and set things up for success with Lobocell, meaning that the time to get a QTC activated for Lobocell will be weeks, whereas it was months for ZINTEGLO. So that's probably the first big difference in synergy that you'll see. Operationally, QTCs have learned a lot through the process by administering ZINTEGLO.

Speaker 3

Many of those learnings will apply directly to how they think about Lovacell, Everything from cell collection through infusion. And then finally, I will just say that we believe that the thing to bank thing time that you asked about at the time from cell collection to Drug delivery of between 70 90 days will roughly be the same for Lovicel and for any other ex vivo gene therapy in this space. That's a part that's going to be standard and hard to change for a little while.

Operator

There are no further questions at this time. I would now like to turn the conference back to our speakers for closing remarks.

Speaker 2

Thank you everyone for joining this morning. And just to reiterate, we have a we've made really good progress On our launch to date, we're looking forward to bringing LovaCel to patients as well. And Bluebird continues to build its position as really a unique Leading gene therapy company in the industry and look forward to giving you more updates as we progress. Thank you.

Operator

This concludes today's conference call. Thank you all for attending. You may now disconnect. Have a great day.

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Earnings Conference Call
Endeavour Silver Q2 2023
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