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spk02: Welcome to Ameren Corporation's conference call to discuss its full year and fourth quarter 2021 financial results and operational updates. This conference call is being recorded today, March 1st, 2022. I would like to turn the conference call over to Lisa DeFrancesco, Senior Vice President, Investor Relations and Corporate Affairs at Ameren.
spk10: Good morning, everyone, and thank you for joining us. Please be aware that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. We may not achieve our goals, carry out our plans or intentions, or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially, so you should not place under reliance on these statements. We assume no obligation to update these statements as circumstances change. Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into, such as mergers, acquisitions, dispositions, joint ventures, or any material agreements that we may enter into, amend, or terminate. For additional information concerning the risk factors that could cause actual results to differ materially, please see the risk factor section of our annual report on Form 10-K for the year ended December 31st, 2021, which has been filed with the SEC and is available through the investor relations section of our website at www.amroncorp.com. We encourage everyone to read these documents. This call is intended for investors in Amron and is not intended to promote the use of a SEPA. An archive of this call will be posted on Amron's website in the investor relations section. Karim Mikal, Amron's President and Chief Executive Officer, will lead our discussion and Mike Cobb, Amron's Chief Financial Officer, will provide a more detailed overview of our financial results. After prepared remarks, we will open the call to your questions. I remind you that multiple audiences typically listen to the calls of this nature, including existing investors, potential new investors, employees, current and potential collaborators, and current and potential competitors. As always in this call, we will attempt to provide constructive information without compromising our competitive and strategic positioning. I will now turn the call over to Karim Mikhael for review of the business. Karim?
spk05: Good morning and thank you all for joining us this morning. 2021 was an evolutionary year for Ameren, marked by our transformation to a truly global commercial company. Last August, we outlined our vision for our three-dimensional growth strategy, breadth or geographic expansion, height representing diversification, and depth or core operational evolution. Our achievements throughout 2021 have laid the groundwork for us to successfully execute the strategy and bring us closer to our goal of bringing the SEPA, the SCEPA, and its cardiovascular risk reduction benefits to at-risk patients around the world. First, with our European approval, we became a truly global company with an international footprint. We moved quickly to focus on this greater than a billion dollar long-term revenue opportunity with the goal of making the SCEPA cardiovascular benefits available for as many patients as possible in Europe. Second, we took actions to adapt to the evolving environment in the U.S. with the introduction of our new go-to-market strategy, which included restructuring the commercial organization and introducing a breadth of new digital capabilities. The result is an optimized organization where we are reaching and doing more with less, and we are already beginning to see some early results of these initiatives. Next, we introduced an international strategy and began executing on filings in order to gain approval and launch the SIPA through partners in approximately 20 additional key territories, which we believe represent an additional $1 billion long-term revenue opportunity. And lastly, but importantly, we introduced our intention to diversify, including the development of a fixed-dose combination portfolio. I'm pleased with the progress we've made, and now let me share some more details. Let me begin with a brief review of our results for the year. As you saw in our press release this morning, we reported net total revenue for the full year of 2021 of $583.2 million and $144.5 million for the last quarter of 2021. The bulk of this revenue continues to be from U.S. product sales of ASEPA. Importantly, we increased profitability in our U.S. Vesipa franchise, and along with our strong balance sheet, this will continue to support our European launch plans. Turning now to Ameren Progress in the U.S., where in October 2021, we introduced our go-to-market strategy, which I just mentioned. Included the restructure of the commercial organization and the introduction of a series of new digital capabilities. Our go-to-market strategy features a three-pronged approach that we believe will drive awareness, adoption, and demand of the U.S. business while providing flexibility to react to new headwinds as we face them. As I noted earlier, we are pleased to already be seeing preliminary results from these efforts. First, we are focused on expanding provider engagement. Our new digital omnichannel approach has allowed us to expand our reach and optimize our organization to do more with less. We have expanded reach to over 150,000 staff and prescribers through high-frequency, customized, and impactful messaging regarding the significant benefits of the SEPA for CV risk reduction. We are engaging with prescribers in the ways they want by utilizing virtual detailing, email campaigns, websites, and medical portals, digital webinars, social media, and more. While still early days, we are seeing some encouraging signs including close to 2,000 new prescribers activated nationwide. It's important to acknowledge that although there are some encouraging signs, we are not at pre-pandemic levels of engagement with healthcare practitioners. Further, given the significant market disruption, we're not sure that we'll ever go back to those levels of face-to-face engagement. Next, managed care access remains a focus. We have intensified our efforts to remove remaining barriers to the SEPA prescription so that we can improve access to patients with real medical need. We are working towards stabilizing our volume and demand, by focusing on enhancing payers' access. Currently, Ameren has approximately 40% of total commercial and Medicare Part E lives on a weighted average basis, with the SEPA as the exclusive IP product. Overall, we were able to improve access for the SEPA for 25% of all commercial lives. And moving forward, there are several important decisions we are awaiting that could significantly and positively impact our coverage this year. Finally, we are optimizing fulfillment of the CEPA prescription for CV risk reduction. We continue to face increased generic competition, where there are now three generics available on the market beginning in January of this year. We remain focused on driving the CEPA prescriptions for cardiovascular risk reduction and we are continuing our efforts to educate the market at every level and particularly at the pharmacy level. One example of our effort here is our recently launched the CIPA campaign focused on prior myocardial infarction and stroke patients at a heightened risk of a subsequent event to generate immediate growth acceleration. As communicated earlier, we partnered with BlinkRx in November 2021 to support the fulfillment of our prescriptions. We are already seeing an impact where we are experiencing accelerated physician uptake and patient prescription fills. The vast majority of patients that fill an IPE prescription in Blink elect to receive branded Vasepa due to its lower copay cost compared to generic alternatives. Most patients also elect to auto refill to aid continuity of treatment with branded receipts. Partnerships such as BlinkRx, where compensation to our partner is based on actual results, are a priority and a key focus of our marketing effort. We're also examining all of our resources and ensuring that our investments are profitable and aligned with our strategy. And as a result, around 50% of our U.S. marketing investment is now volume driven. While we expect market conditions will vary dynamically depending on a number of factors, our focus is on our ability to maintain a positive contribution margin. As you all know, the U.S. strategy remains critical to Ameren overall growth strategy as U.S. business profits are helping to support our European expansion, international growth, and investment in our pipeline. Before we move to Europe, I want to provide a brief update with regards to the district court decision on the Ameren versus HCMA and Health Net case. We are pleased that the court found that there exists sufficient basis and factual questions concerning inducement of infringement for the litigation to proceed against Health Net. Ameren will continue to vigorously pursue its case against Health Net. While we are disappointed in the ruling on HCMA's motion to dismiss, we recognize that this is an evolving area of the law. Ameren intends to appeal of the district's court decision. Ameren believes that its patents are being infringed upon and will continue to fight to protect the company's intellectual property. Turning now to our progress in Europe, which we believe is a greater than a billion dollar long-term revenue opportunity for Ameren. As I mentioned earlier, Following European regulatory approval, we made significant progress developing and executing a market access strategy with the goal of launching VASCEPA in Europe in a strategic, sequenced manner, aiming at optimizing both price and patient population. We started with an ambitious plan to submit reimbursement dossiers in 10 countries, and we achieved that goal ahead of schedule as we announced in our third quarter report. Moving forward, there will be a lot of information as we file in additional countries and enter reimbursement negotiation in key markets where we have already submitted dossiers. As a result, I think it's important to take this opportunity to review the process for commercializing a product in most markets in Europe. Although its market has its own differences, there are five major steps. Step one, is of course the regulatory approvals in the EU and UK. It's important to achieve a broad label language that represents the full patient population potential as this is the key for the next negotiating steps. We accomplished this in 2021 and with a patient population that is fully reflective of the REDUCE-IT study. Step two involves the development and filing of market access reimbursement dossiers which are submitted on a country-by-country basis. These dossiers include the summary of the scientific evidence, supporting the benefits of the product, and datasets defining the patient population that can benefit from Vaskepa in the specific country. Step three, this begins with a scientific evidence assessment or clinical review which involves reviewing study results, expert opinions in each market, assessing treatment benefits, and determining the eligible patient population for reimbursement. Once these reviews are complete, they render an opinion and move on to the next step. Step four is price negotiations. At this stage, you introduce pharmacoeconomic data and assessments. Other factors and variables are also considered, involve the overall budget impact and macroeconomic environment to arrive at a price for reimbursement. Finally, step five, you conclude the process with official price publication and launch. The one exception to this process I just described is Germany, where we launched in mid-September 2021. In order to provide patients with access to new medicine in Germany, new pharmaceuticals are given one year on the market with reimbursement as the market access process is underway. During this first declared pricing year, it's important to maximize the market opportunity, but also ensure that investments are flexible and adaptable to changing market conditions that can occur as part of the ongoing negotiation process. Every market also has its own nuances that play a role in the ultimate outcome. These include environmental factors and local market conditions that impact a company's ability to attain reimbursement, receive optimal pricing, maintain timelines, obtain target patient inclusion, and achieve adoption in a given market. That is why it's important to balance the level of investment with the right timing and probability of success. Investing too early is wasteful, while investing too late can adversely impact the outcome. our team has taken great care to thoughtfully build and assess each market prior to making decision on when and where to invest. It can take many months to work through the reimbursement and price negotiation processes. This is confounded by the fact that certain parts or opinions are made public at different times and through different formats depending on the market, making it difficult to know the specific outcome until the process is complete. This is part of the dynamic nature of European reimbursement and is anticipated. It's important during this process to reiterate that our filing and reimbursement process thus far is going largely according to plan. We have assembled a strong, talented team that is working through these various stages in parallel in several markets, and we feel confident of the favorable outcome. As you know, We completed market access dossier submissions in 10 countries, Germany, UK, Italy, France, Spain, Denmark, Sweden, Finland, Norway, and the Netherlands, and are now in the active pricing negotiation phase in a number of these markets. This process will take several months to complete. I am pleased overall with the way these negotiations are proceeding in line with our plan to launch in up to six countries in 2022, and I remain confident in our $1 billion plus opportunity in Europe. In Central and Eastern European countries, we are actively negotiating partnerships to bring Vaskepa to various countries via marketing and distribution agreements with partners who have established infrastructure in such markets. We look forward to reaching agreements later this year and to launch subsequently in these markets. Moving on to our progress advancing into other international markets, which we consider everything outside of Europe and the U.S. In the fourth quarter of 2021, we introduced our strategy to bring the cardioprotective benefits of the CEPA to 20 additional markets over the next three years. In 2022, our goal is to submit regulatory filings and obtain product approval in up to six countries. I am pleased to announce that we have filed and received confirmations that our filings have been accepted for regulatory reviews in Australia and Israel. After careful evaluation, we have made the decision to seek partners in all of these international markets, and that process is underway now. We believe this opportunity represents the potential of an additional $1 billion in revenue. Now, an update on the already partnered international territories, China, Middle East, North Africa, and Canada. In China, our partner Edding Farm continues to expect to receive approval of a SEPA in mainland China and Hong Kong by the end of 2022. China is a significant market opportunity and we continue to work hard with our partners to be ready to launch. In the Middle East, North Africa, we received regulatory approval and reimbursement are in the process of launching in several markets. We have previously shared the co-promotion agreement between HLS, our partner in Canada, with Pfizer that was initiated in the fall of 2021. This collaboration represents a further validation of the SEPA and the importance of the reduced data to cardiovascular medicines worldwide. We look forward to sharing more details on this partnership in 2022. Looking ahead to the international expansion, in 2023, we plan to seek approval in up to nine additional countries, and in 2024, we expect to complete regulatory approval filings in the remaining five countries we targeted. These filings will all be supported by the long-term cardiovascular outcome data from the landmark reduced study, along with the FDA and EMEA approvals of the SIPA-VASCEPA for the cardiovascular risk reduction indication. Finally, let me share some perspective on our thoughts around diversification, the high dimension of our global strategy, in addition to our geographic expansion, where you can see we are making great progress. We also announced our plans for lifecycle management of our vesipa-veskepa acid with the development of a fixed-dose combination portfolio. The medical rationale is key to drive the development of a fixed-dose combination in cardiovascular disease. Combining multiple prophylactic agents for cardiovascular disease into one pill was proposed by the WHO since 2002 to increase adherence and adequate dosing. In the lipid-specific context, the European Society of Cardiology Working Group on cardiovascular pharmacotherapy has recommended the use of fixed-dose lipid-lowering combination drugs to increase adherence. In patients at very high risk, such as those with a history of a cardiovascular event, the group recommends initiation of fixed-dose combination treatment immediately after the event. The rationale for this recommendation is that immediate combination therapy may avoid potential barriers related to the multiple visits needed for treatment intensification. For the patients, fixed-dose combination therapy can improve adherence as evidenced by studies performed in both Europe and the U.S. with improvements in adherence and lower number of healthcare provider visits a fixed-dose combination therapy has the potential to improve clinical outcomes, including evidence of improvement in biomarker levels in patients. This will also translate in enhanced therapy with reduced bill burden and significant convenience factor as many high-risk cardiovascular patients have other comorbidities and therefore multiple medications. Commercially, This allows us to maximize the investment made into the reduced study, where IPE was used on top of a statin by offering the benefits of vasepa-vaskepa in a broad portfolio of products. We look forward to sharing more on the development of our fixed-dose combination portfolio as we move further into the development process, potentially later this year. We also remain committed to evaluating opportunities outside of Ameren to leverage our capabilities and diversify our portfolio while ensuring we remain financially strong. This remains a core area of focus for our team. Finally, and before we turn to financial results, underlying our growth strategy and our objectives for this year is our commitment to operational excellence. We are continuing to update and strengthen our leadership team and the board. We are focused on making profitable investments in growth with a focus on flexible investments to ensure our ability to adapt to a dynamic environment and achieve our multi-billion dollar global expansion strategy. And we are committed to a strong balance sheet in order to continue to invest in our expansion strategy for the foreseeable future. With this overview of our business, Let me turn the call to Mike Calder, CFO, for a more detailed discussion of our finances. Mike?
spk03: Thanks, Karim. During the fourth quarter of 2021, we reported net total revenue of $144.5 million, a decrease of 14% compared to the fourth quarter of 2020, and $583.2 million for the full year of 2021, a decrease of 5% over full year 2020. During the fourth quarter of 2021, we reported net product revenue of $143.7 million, a decrease of 13% compared to the fourth quarter of 2020, which was largely driven by a decrease of U.S. VSIPA sales as a result of the impact of generic products for VSIPA's initial indication and the ongoing impact of the COVID-19 pandemic. For the year ended December 31st, 2021, we achieved $580.3 million of net product revenue, a decrease of 4% over the same period in 2020, which was largely driven by a decrease in U.S. VSIPA sales of approximately $20.2 million, as well as a decrease in VSIPA sales to our partners outside of the U.S. of approximately $6.5 million. The patient need for VSIPA in the U.S. remains solid, and we are beginning to see encouraging signs that the U.S. go-to-market strategy will continue to result in market expansion. The U.S. business has continued to be profitable from a contribution margin perspective, meaning gross profit less sales and marketing related expenses in the fourth quarter and continues to provide support for the expansion into Europe and other geographies around the world. During the fourth quarter of 2021, we reported operating expenses of $97.7 million, a decrease of 22% compared to the fourth quarter of 2020, and $451.4 million for the 12 months of 2021, a decrease of 10% over the same period of 2020. The decrease is related to the implementation of our go-to-market strategy in the U.S., including optimizing our sales force and increasing our reach through digital platforms. As part of our go-to-market strategy, we have increased the variability of certain of our U.S. marketing expenses, which are tied to sales volume. This was partially offset by our investments in growth and expansion in Europe and other markets outside of the U.S. We also experienced a one-time charge of $13.7 million related to the implementation of our go-to-market strategy for the U.S. Under U.S. GAAP, Ameren reported net income of $7.7 million for 2021 or basic and diluted earnings per share of $0.02. Absent the reversal of certain non-cash charges, we were approximately breakeven for 2021. I think this is particularly noteworthy as we were able to achieve this with our continued disciplined expense management and as a result of the implementation of our go-to-market strategy, despite the decrease in our product revenue. However, due to the variability of spend related to these initiatives, our growth strategy in Europe and around the world, and our fixed-dose combination research, and develop initiatives, it is uncertain whether such results can be expected in 2022. We continue to monitor the ongoing global supply chain issues, which are resulting in inventory supply shortages for numerous companies and products. We believe we have and are maintaining adequate supply to meet the expected global demand, including our global expansion plans and pipeline advancements. As of December 31st, 2021, Ameren reported aggregate cash and investments of $489.1 million, consisting of cash and cash equivalents of $219.5 million, and liquid short-term and long-term investments of $234.7 million and $35 million, respectively. We believe our current available cash and resources, including U.S. profitability, are sufficient to continue to support the launch of the SCEPA successfully throughout Europe and in other international countries throughout the world. With that financial overview, I will now turn the call back to Karim for closing remarks. Karim?
spk05: Thanks, Mike, for that financial overview. 2022 is a year of execution for Ameren. We have set ambitious goals. We have transformed into a global commercial company. The foundational work we conducted throughout 2021 has us well positioned to execute on our growth strategy across all three key areas for growth in the US, Europe, and around the world. Our path forward is clear, and we are excited to be advancing those plans as they will bring us closer to realizing our bold vision to stop heart disease from being the leading cause of death worldwide. With that, operator, we're ready to open the call for questions.
spk02: Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is coming from Michael Yee. Please announce your affiliation, then pose your question.
spk01: Hi, good morning. This is Jiajun Wen on the line for Michael E. from Jefferies. And thank you for taking my questions. So two for me. First one, thanks for sharing the five steps of European commercialization. So in addition to that, I guess, could you comment on how European launch is evolving? How should we think about uptake and pricing? And what are the next countries to launch in Europe? And maybe in what order? And second one, I believe you've been looking into BD opportunities. Could you give us some color on the potential to in-license a new drug? Maybe comment on the probability of this in 2022 and in what areas and what types of products, if possible, and how would you utilize the U.S. Salesforce? Thank you.
spk05: Thank you for your question. Well, let's start with the launch in Europe. So as we articulated the process, it's a five-step process. We have achieved step one, which is the regulatory approval. We've achieved step two, which is submitting of the dossiers. And now we are somewhere between step three and step four, which is the clinical assessment and the price negotiations. And the two are actually truly linked to one another. So you go back and forth. between the opinion and the price negotiation usually starts with a bit of pushback on the opinion, and you provide more evidence. And as the negotiation progresses, you really come at the end to an agreement about the final price. Now, where we stand today is that we have advanced in multiple countries, you know, on different speeds. And at times, you move a step forward. At times, you come back one step. So where we stand today is very dynamic. So we're not able to say, really, which country is going to come first before the other. There are countries that have a clock, meaning they're tied to a timeline. For example, the U.K. is tied to a timeline. Many of the Nordic countries are tied to a timeline. So we can anticipate some of these, but still it's a big part of the negotiation. But there are markets that don't have a clock, like Italy or France, where it's very iterative as a problem. Up to now, as stated, we believe we are going largely S-land. You know, different countries are going to come into the launch list at different times, and that's really where we are. Maybe that was also part of your question, an update on the launch. I'm just going to highlight that just in case it was also part of your question on Germany. We did launch in Germany. We declared price. We were listed on the electronic prescribing system beginning of October. Unfortunately, we had almost 38 days only on the field before Omicron hit Germany very hard, and we had to pull out our field forces. Until today, we're not really back to normal activity in Germany. We still have 25% of the target audience in Germany not accessible and will not be accessible before, you know, the second quarter. So we're definitely working hard to compensate for this lack of activity, but that's where we stand on that one. Now, on the question of business development and diversification, we've already announced, you know, that we started the development of a fixed dose combination. And that's, you know, an important step in diversifying the portfolio. At the same time, we said we're still open for opportunities to diversify within the cardiometabolic space. Having said that, we're very thoughtful about what assets do we need. And the focus is very much on commercial assets in the U.S. where we have a robust structure and where we are ready to take on additional product responsibility in this space. In Europe, it's not a priority because we are very busy with the launch, but if an opportunity comes up, we're not going to say no, but these are really our priorities in terms of business development. Thank you.
spk06: Thanks. That's very helpful. Thank you.
spk02: Your next question is coming from Jessica Fai. Please announce your affiliation, then pose your question.
spk04: Hey, this is Nick on for Jessica Fai. Thanks for taking our questions. So maybe just building on that last question, recognizing that you're still building access, kind of when can we expect any potential inflection in the European launch? You know, for example, is there a time when you feel comfortable or confident European sales would exceed $100 million? And also, just to confirm, what were the European sales in 4Q? And kind of looking forward, when do you think we can expect a breakout of European sales? Thanks.
spk05: Thank you. Thanks, Nikon. So, you know, back to European launch and European inflection. You know, obviously, in Europe, we are launching with a very different foundation than what we had in the U.S. What we had in the U.S. is really, you know, four, five years of almost pre-marketing of the indication of very high triglyceride, and then when we were launching the cardiovascular risk reduction, the product was known, the company was known, so the uptake is obviously very strong. In Europe, we have a different situation. You know the company is new to Europe and the product is also fairly new So it is going to take a bit more time to build that level of awareness Adoption having said that we're confident because of the evidence that we have it is rare in Europe that you actually launch with outcome data now true reflection will happen usually for cardiometabolic products usually to two to three quarters after actual activity, especially now Germany is a different case because you actually launch really without pre-marketing, so their uptake is usually slower, but that's really where we stand. On your specific question on the revenue coming from Europe, we have 700,000 coming from Europe in our 10K, And again, you know, this was a period with significant disruption for our launch in Germany.
spk04: And maybe if I could just follow up on that. When do you think we can expect to get European sales breakout? I mean, so going forward, we should expect to continue to get European sales breakout, correct?
spk05: So, you know, as countries, you know, prepare for launch, I mean, you heard us saying we're not going to invest too early. because investing too early is wasteful. You know, it's a negotiation which, you know, let's face it, many even big pharma companies struggle with, okay? So, you know, to go too early and to say we want to be so well prepared so that we have a strong outcome and uptake, It's really wasteful. You have to wait until you see the head of the committee holding the pen to sign to say, I'm going to engage in further investment. So, you know, it's going to be a country-by-country-based situation. Our aim by country is to break even as early as possible after we launch. We're not loading, you know, in terms of investments, but at the same time, we're not going short so that we can also maximize the opportunity of every country launch.
spk04: Great. Thank you so much.
spk05: Thank you.
spk02: Your next question is coming from Yasmeen Rahimi. Please announce your affiliation, then pose your question.
spk09: Good morning, team, and thank you for your thoughtful prepared remarks. Maybe shifting gears to the U.S., my first question is, you know, on your prepared remarks, Kareem, you noted that there are certain decisions that you're waiting for that could drive greater coverage. What are those decisions? What do you project coverage to be at the end of 2022? And then the second question is fixated on sort of focusing on the population with am I in stroke, prior am I in stroke? How big is this population and how much do you think it will drive adoption in this population? And thank you for taking my question.
spk05: Thank you for your question. On the U.S., we highlighted that managed care access is a very important priority for us. Now, this is a very dynamic situation because your negotiations with each of the PBMs are usually annual, but they change on a quarterly basis if different events come up. We communicated that we had 40% of the commercial lives and Medicare Part D on exclusive status at the end of the year. When we said we're expecting other decisions, it was additional plans that could become exclusive over the next one to two months. which can increase at 40%. At this point in time, we cannot speculate at year end what would this be because you gain some, you lose some. It's a dynamic situation. But it shows, you know, that we are able to be competitive in the marketplace where we stand today. And we believe that we can continue to drive this effort moving forward because when you look at it today, we're still maintaining a significant large portion of the market by being competitive. Now, in terms of the focus on the patient population, the focus on the patient population is a product with a very, very large patient population. And we're facing this in the U.S., and we're facing this in Europe. You face a physician, and when you share your label and your indication, it almost is every patient that you treat, more or less. So the more we focus and the more we target the very specific population that will benefit the most from the product, we can drive the urgency to treat, the call for action from the prescriber, and at the same time, a higher adherence and a higher acceptance on the patient level. So we don't believe that that's limiting the potential of the product by being so focused. We actually believe that this is going to drive better acceleration. Because when you are so diluted, when you are so diluted and you go in and you try to engage with the physician, it's difficult to get traction. In the U.S., this population, by the way, is somewhere in the 16, 17 million patients. So that's also still very, very significant. And if we can get a higher penetration rate from that 16, 17 million, then definitely this is going to be a great outcome for us as a product and as a company. Thank you, yes, request.
spk10: Thank you.
spk02: Your next question is coming from Louise Chen. Please announce your affiliation, then pose your question. Hi, thank you.
spk07: Louise Chan with Cantor. Thanks for taking my questions here. So first question I had was, how should we think about the U.S. and EU sales shaping up this year? And will sales be up on a total basis year over year? And how should we think about U.S. and EU contribution from the mix? And then second question I had for you is on M&A, once again, and your business development strategy. Would you consider looking at something more transformational or larger? Or maybe another way to ask this is, you've got a decent-sized cash balance. What are your key priorities for capital allocation? Thank you.
spk05: Thanks, Louise. So, first of all, on revenue, as you know, we have not given guidance. The situation is very dynamic, so today it's very difficult to speculate how the year is going to evolve. You've seen that we're making a lot of effort in the U.S. with our new go-to-market strategy. It's not new anymore. We've implemented it for the last five months, and we're starting to see results. And the biggest result out of that is a higher, more positive contribution margin. that is very, very critical for the investment and the growth of the company in Europe and elsewhere. So in terms of investment, we're basically doing our best in the U.S., making sure we maximize the contribution margin and use that in Europe. The revenue in Europe will depend on the sequence of the launches and, you know, which countries are going to launch first. We know that out of the 10 dossiers we submitted, France, Italy, Spain, Germany, and the UK, so the five bigger European countries, can deliver 65% of the whole European potential. So they're definitely an area of focus, right? But at the same time, we're also focusing on the other four that we submitted, because once you have a positive reimbursement decision in Europe, and you anchor a price, that becomes a very significant milestone. But the revenue is going to be built up really based on which country is going to launch when. You know, and at this point in time, because we have not given guidance, you know, we cannot really communicate on that. Also important to note that, Because we are in full, you know, blown price negotiation at this point in time with European agencies, we're trying to be, you know, very thoughtful as to what we share about price, patient population, or even timing, because for them timing is very critical, by the way, if they keep us out of the market for an additional quarter, that's less budget, you know, impact for them. So, you know, we are trying to do our best in a very challenging macroeconomic environment today in Europe. You know, I'm sure everybody's following the news already post-pandemic. Many countries in Europe were dealing with a significant healthcare budget deficit. Germany dealing with a 20 billion euro budget deficit from a healthcare perspective. So we, you know, we are negotiating and we believe countries are going to come one after the other. And we are still committed to have six countries launching in 2022. Now, In terms of your question on M&A, and I want to be very clear on this one, our priority is to truly launch successfully in Europe. That's the priority number one. And this is where we're getting all our investments, and that's why we're making all these efforts on our cash and our contribution margin from the U.S. That's priority number one. Then we have already assets in place, like our structure in the U.S., that we can best utilize. with commercial assets. So if we're doing something, priority number one is going to be in that space. A commercial asset that, you know, can help us drive more contribution margin, you know, in the U.S. At the same time, we see that our fixed-dose combination decision is very strategic and is going to provide a long-term revenue additional to what we're getting with the monoproducts. And I'm sure you realize that today we speak about the fixed-dose combination portfolio. Last time we spoke about this, we said we're working on a fixed-dose combination with a statin and one statin to try. Now we see that there could be more opportunity for development that we are exploring at this stage because the more we can have you know, a full portfolio of products that will support the patient demand in terms of cardiovascular risk reduction, right, then the better position we're going to be. So this is really the summary of our thoughts on diversification in a nutshell.
spk00: But thank you for your questions.
spk02: Your next question for today is coming from Rowana Ruiz. Please announce your affiliation, then pose your question.
spk08: Yep, thanks. Rowana Ruiz from SVB Learing. Thanks for taking the question. So two for me, first on the U.S. I noticed you mentioned you activated about 2,000 new prescribers with your new go-to-market strategy. So I'm a bit curious, what do you think is drawing them to the SEPA today and why do Mike, why were they not aware or prescribing the SEPA as much previously? And second question is about your fixed dose combination with a statin. I was curious if you could just, you know, give us some highlights about what possible next steps are for the program and general timelines.
spk05: Perfect. Thank you, Werner. So, on the U.S., we are happy to see early results from the go-to-market strategy and activating 2,000 additional prescribers. As a reminder, we were in true full launch mode January 2020 in the U.S. for six weeks when we had to pull, you know, all the field force out of the market for the pandemic. And they stayed out of the market for six, seven months until they went back for just a month or two during the fall of 2020, then back again in 2021. So this has been A very, very disrupted launch in the U.S. It's no surprise that today we're able to activate new prescribers because many of them have not been properly exposed to the product and the message during the launch phase. That's number one. Number two, the marketing team already decided to focus on a patient population where the urgency to treat is more significant, and that's attracting physicians who care more about cardiovascular risk reduction. They are not in the biomarker world, I just want to check an LDL or I just want to check a triglyceride. I care more about my patient outcome. By talking more cardiovascular risk language, we are able to engage with these physicians at a far higher rate. Also, and more importantly, as we said, we were able to engage digitally with 150,000 physicians, which we were not able to do that even with 750 reps on the field because the door was closed. And no matter how hard they tried, physician access was very limited. While their e-mail inboxes are open, and we took, you know, advantage of that opportunity, and we engaged with them, and some of them, you know, clicked and read and came in here with us . Now, this is a very important step, and it's very balanced. We have not seen at the same time the same increase in death, because we believe it's far more difficult to have an increase in death, especially if you have three generics on the market, and even if the prescription goes out as the SEPA, there is a likelihood that the prescription gets switched. at the pharmacy level for the generic. Having said that, we are encouraged by the early results, and our team continues to work very hard, hand-in-hand between the field force, doing a great job. So, that's really. Now, in terms of the fixed-toe combination, let's talk a little bit about this. So, if you look at the line, Cardio-metabolic portfolios that are out there, you know, the ones that sold the most beyond the statin, you will see that many of these products actually had one, two, three, at times four fixed-dose combinations, simply because once you've invested half a billion dollars, like what Ameren did for the REDUCIV study, You made that investment and you demonstrated, you know, a benefit, a cardiovascular benefit. So to stop at one product is really not doing your best in optimizing and maximizing your investment. You would want to bring that value and that investment that you made to many more patients. And the way of doing this is to try to put your product with other products that have also cardiovascular outcome benefit to ensure you maximize that for Now, the good news about going down that trial is that your development runway, your regulatory pathway, doesn't require, based on expert opinion for the moment, in the U.S., you do not need additional clinical trials. You really need to have a year of development, a year of stability, and a year of filing. So it's a three-year runway with... reasonably logical investments that are not like an investment in, you know, a clinical program of, you know, a new outcome study by which you're able to bring an additional product that will be more attractive to many more physicians and patients. Imagine that today statin users in the U.S. are 700,000 prescribers. while, you know, Masipa prescribers, because we only had a couple years of launch for cardiovascular risk reduction, are maybe 30-something thousand or 30,000. So all of a sudden, by putting a statin in your product, you appeal to 20 times more physicians who can now prescribe you because you put a robust statin in your face-to-face combination. So that's really... a bit of summary on the fixed tools combination. We're at the beginning of the process. For the moment, we are working to develop one product with one statin. Once we see after the development here that we are able to successfully deliver a formulation, as you know, there is a true formulation challenge with this product. It is not that simple to put, you know, a SEPA with, you know, a solid form. a product, and then once we have the development phase, you know, successful, then we are going to think of the development of other products, because once you've sold that, it opens the door. Thank you, Rowana, for your question.
spk02: Your next question for today is coming from Cade Cruz. Please announce your affiliation, then pose your question.
spk06: Hi guys, this is Cade Cruz on for Paul Choi from Goldman Sachs. And our question was following the recent court decision, we were wondering if you had any update in terms of timeline or next steps that you've already taken as you further pursue litigation. Thank you.
spk05: Thank you. So on the legal front, I mean, we, you know, we would definitely, you know, Happy to see that the Health Net code case is continuing and that the court saw that there was enough evidence for this case to continue. It is very important for us that it's Health Net that is continuing because at the end of the day, the payer is the final decision makers on which patient gets what. So we're encouraged by this decision. At the same time, on the HICMA side of things, we continue to move forward with our appeal. for HEGMA. This is an evolving area of the law, as you know. So, you know, we continue to follow closely other cases that are similar because we believe they may or may not have an impact on our case. But we will strongly and vigorously continue to defend, you know, our patents on all fronts. Thank you.
spk02: That is all the time we have for questions today. I would like to turn the floor back over to Lisa for any closing comments.
spk08: Thank you, Holly, and thanks for joining us for our fourth quarter and full year earnings call. Please feel free to follow up with us after the call should you have any questions. Have a great day.
spk02: Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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