Amryt Pharma plc

Thank you, operator. On the call today to discuss AMRIT's Q2 results are Dr. Joe Wiley, CEO, and Rory Nealon, the company's CFO and COO. In addition, Dr. Mark Summary, AMRIT's Chief Medical Officer, and Sheila Frame, President Americas, will be available to answer questions during the Q&A session. Joe will provide an update on the business, and then Rory will go through the financials in detail. Before I hand it over to Joe for his formal remarks, let me remind you that this webcast and conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict and which may be outside of the company's control including among other things the development of its business the trends in its operating industry changing economic financial or other market conditions in light of these risks uncertainties and assumptions the events or circumstances referred to in the forward-looking statements may differ materially from those indicated in these statements words that express and reflect optimism satisfaction with current progress prospects or projections as well as words such as believes, intends, estimates, expects, plans, projects, anticipates, and other similar variations, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Any forward-looking statements made speak only as of the date of today's press release and conference call, Friday, August 6th, 2021, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this call. For more information, I would refer you to the forward-looking statement section of the full-year financial press release issued earlier today, as well as the company's filings with the SEC. At this time, I will turn the call over to Dr. Joe Wiley. Joe, please go ahead.

Thank you, Simon. I am on slide four of the presentation. Today, we have issued record quarterly results and again have raised our full year 2021 revenue guidance. Today's results demonstrate the continued performance and growth of our commercial business. We delivered 35.9% organic revenue growth year over year in Q2, with strong underlying performance in both our MetroLeptin and Limitified franchises. I would add that this performance was driven by increasing the number of patients with access to our therapies globally. We generated $17.4 million of EBITDA in the quarter. This represents our sixth consecutive quarter of positive EBITDA generation. Total cash as of June 30th, 2021 was $142.9 million. increased from $118.6 million at the end of the first quarter. We are pleased to report that we have now closed the Chiasma acquisition, and I would note that of those who voted, over 99% of shareholders from both companies supported the transaction. We will now begin the process of integrating and growing our combined businesses. Following the deal close, Amherst now has three approved commercial products and a robust clinical pipeline. During the quarter, we also made significant progress on the regulatory pathway for our lead pipeline asset, AudioGel S10, in both the US and Europe. We believe we are on a path to potentially achieve approval and commercial launch of AudioGel S10 by the end of this calendar year in the US and Q1 2022 in Europe. Overall, this was a truly exceptional quarter for Emirates and we look forward to continuing to grow the business in the second half of 2021 and beyond. Moving on to slide five. I will now provide more details on our business performance. Second quarter total revenues grew by 35.9% year over year to $62.8 million. This included the impact of a significant LATAM order for Metro-Leptin booked in the quarter of $12.1 million. Regarding the revenue guidance, given the strong performance of the commercial business year to date, we are now expecting 2021 revenues to be in the range of between $210 million to $215 million. which represent year-over-year growth of 15% to 18%. This is an increase from our previous guidance of $205 million to $210 million issued when we reported our Q1 results. This clearly demonstrates the Board's confidence in the outlook for our business. At this time, we are not yet including any revenue contribution from ICAPSA in this forecast, but we are excited by the potential for this product and we will update the market in due course. Moving now to our commercial products, I'm now on slide six. Starting with MetroLeptin, global sales in the second quarter were $43.1 million, compared with $27.9 million in Q2 last year, representing growth of 54.3%. The US accounted for 41.2% of global MetroLeptin revenues and the EMEA accounted for 25.6% in Q2. We have previously shared our lifecycle plan in the U.S. to seek a label expansion for metraleptin to include the treatment of partial lipodystrophy in addition to the currently approved label for the treatment of general lipodystrophy. We received feedback from the FDA on the path forward for this initiative, which will require a Phase III study, and we are on track to initiate this study by the end of 2021. As we have discussed, we estimate the market opportunity in the U.S. with the current GL label to be approximately $140 million. And if we are successful in adding PL, we believe that it would approximately double the size of the addressable U.S. markers to $280 million. Let's move to limit five in slide seven. Second quarter sales were $19.5 million, a 7.7% increase year-over-year. The U.S. accounted for 43.7% of global limitified revenues, and EMEA accounted for 38.5% in Q2. EMEA limitified revenues increased by 18.1% in Q2 2021 versus Q2 2020. Year-to-date growth in the EMEA was 29%, driven by double-digit growth across all the major European markets. We are conducting a pediatric study for Lumitipied in HOFH, and we expect to have data in early 2022. Assuming positive data, we will seek approval of Lumitipied to treat children with HOFH in both the US and Europe. We'll switch gears now and talk for a couple of minutes about the highlights of the Chiasma acquisition. I am now on slide eight. We went over the transaction in detail when it was announced on May 5th, but I think it's worthwhile to revisit exactly why we're so excited about it. In addition, the addition of Mycapsa means the combined company now has three products on the market with strong IP protection. Mycapsa is currently approved for appropriate patients with acromegaly in a global market estimated at approximately $800 million. there is also the potential to expand into patients with carcinoid symptoms stemming from neuroendocrine tumors, or NET, where the opportunity is estimated at approximately $1.9 billion globally. Importantly, the acquisition of Chiasma will leverage our successful track record of business integration and commercialization. MyCAPTA has recently been launched in the U.S. and given the significant degree of customer call point overlap we believe that combined business will potentially accelerate the adoption of mycapsa with endocrinologists. By combining and scaling sales forces, we believe that this will both drive mycapsa adoption as well as potentially enabling further metraleptin revenue growth. We will also leverage our regulatory affairs experience and global commercial infrastructure to seek approval and launch of mycapsa internationally. Now that the acquisition has officially closed, our immediate priority is to start to integrate the two companies. We should be able to provide more details on how the integration is progressing during the virtual capital markets event that we plan to hold in mid-September. We will also discuss our plans for MICAPSA in more detail at this event. The combined portfolio of Amrit's products and pipeline post-closing of the Chiasma acquisition is summarized here on slide nine. For the first two commercial AMRIT products, Lumetipide and Metroleptin, you can see the approved indications in the upper section of the chart. Macapsa inaquamegaly is now our third marketed product in the US and has been submitted to the EMA in Q2 this year. For neuroendocrine tumors, AMRIT is planning for a modified 505 regulatory pathway in the US and it is our intention to start a Phase III study in NET in the first half of 2022, post-FDA discussions. I will discuss Oliogel S10 in the next slide, but I would also draw your attention to our exciting gene therapy asset, AP103, which is expected to enter the clinic next year. The important thing to note here is not just the breadth of our portfolio, but also that these products will generate meaningful news flow this year into 2022 and beyond. Now to our lead pipeline asset, Oleogel S10. I'm now on slide 10. Oleogel S10 is a potential novel treatment for the cutaneous manifestations of severe EB, a rare and distressing genetic skin disorder affecting young children and adults. There is currently no approved treatment for this condition And if approved, Oleogel S10 would be the first to market for those patients suffering from this devastating condition. Early in June, the FDA confirmed that our NDA for Oleogel S10 was accepted for filing and also informed us that the application has been granted priority review. The target to do for date is November 30th, 2021. In addition, the agency confirmed that Oliogel S10 will not require an advisory committee meeting. As a reminder, Oliogel S10 previously received fast track designation and rare pediatric disease designation from the FDA. If approved under priority review, Amherst will be entitled to apply for a priority review voucher. Our marketing authorization application for Oleogel S10 for EB treatment to the European Medicines Agency was validated in March this year. The assessment by EMA is progressing on the timetable as previously identified, and we are in line with the standard timetable. We continue to anticipate a decision by Q1 2022. While the regulatory activities are ongoing, We are moving forward with our launch plans to address the market opportunity based on our rare disease philosophy and experience. EB represents a highly concentrated market with 100 key positions treating the majority of patients at 56 key centers across the US, EU five countries, and Japan. We expect that it will require relatively modest incremental investment in our existing customer-facing infrastructure in order to drive global access and demand. If approved, Oleogel S10 would be the first and only approved treatment for EB, which is an important advancement for these patients. We are encouraged by the FDA's decision to pursue a priority review, and if approved, we will endeavor to ensure the product reaches patients as quickly as possible. There is a well-established patient advocacy, scientific, and research community built up around EB, and we have already forged strong relationships here. In addition, we are currently scaling up our manufacturing and supply chain to ensure adequate drug supply to meet expected demand. Our existing manufacturing facility should be sufficient to build enough API for launch volumes through 2023. Following that, we intend to have a dual sourcing strategy that will be executed across the supply chain and manufacturing scale up in order to support commercial demand beyond this. Let me now turn the call over to our CFO and COO, Rory Neelan, who will provide more details on the Q2 financials. Rory.

Thanks, Joe. I plan to provide some commentary on the Q2 numbers as I normally do on these calls, but I'll also provide some color on the cap table post our acquisition of Chiasma at the end of my remarks. Let's start with our revenues. Joe has already covered the revenue performance by product and by geography. Just to remind you of the headline numbers, we've seen an overall increase of 35.9%. in our quarterly year-on-year revenues, and a 29.6% quarter-on-quarter growth rate, which in part is driven by that substantial 12.1 million Metroleptin order in LATDAM, which we alluded to as part of our Q1 results call. What is really pleasing is that we're seeing growth in both Metroleptin and Limitified revenues, both year-on-year and also quarter-on-quarter. Compared to this time last year, US sales are up 9%, with the most significant increase being in LATDAM, which is nearly four times higher than the same period last year. And within this growth, there has only been a price increase in the USA, which was approximately 4%. In other words, almost all our growth is coming from volume increases. Finally, before concluding on revenues, as noted in the press release and reiterating what Joe has said, we are revising our revenue guidance for the full year 2021 to 210 to 215 million, which is 15 to 18% up on the actual 2020 revenues of $182.6 million. This revised guidance, as Joe said, excludes the impact of my CAPSA revenues, which we'll talk more to in our September analyst briefing day, once we have a chance to get our feet under the table in Chiasma. If you look at the progression of our business over the last three years, you will note that we have delivered consistent growth year on year with annual revenues growing from $136 million in 2018, being the last full year when Agerian was a standalone company, to $154 million in 2019, with both 2018 and 2019 being pro forma combined numbers, as if Amrush and Agerian were merged from January 2018, increasing again to $182.6 million in 2020, and finally to guidance of $210 to $215 for 2021. We anticipate this growth rate will now change significantly in the coming years with the acquisition of Mycapsa for the treatment of acromegaly, and also the impending launch of Oleogel S10 in EB if the product is approved by the FDA and EMA. The next item I'd like to touch on is our gross margin performance, excluding the impact of the non-cash items, which is consistent at 75.8% for the quarter and 75.7% year-to-date. This compares, I'll remind you, to 73.5% for the year as a whole in 2020. Within these numbers, the mix varies by product and by geography. with the higher third-party royalties on Metroleptin making that product a lower margin product as compared to Limitapide. With the addition of Mycapsa, which has no third-party royalties, and hopefully, Filsivez or AudioGel S10, if it is approved, which has a 9% third-party royalty rate, we'd expect this combined group margin to edge upwards as revenues of these new products grow. Regarding the non-cash items and our cost of sales that we adjust out in calculating EBITDA, We no longer have any amortization of the fair value step-up from the Igerian acquisition. The remaining $250,000 has now been amortized and there is none remaining. We will, however, have to step up the acquisition inventory from the Chiasma acquisition, and this is something we'll talk more about on our next quarterly conference call. The other non-cash item is the amortization of intangible assets from the Igerian acquisition, which is approximately $10.7 million per quarter, and this will continue for the patent life of these assets. And as you'd expect, we will need to assess the value of any chiasm intangibles, which will result in similar amortization and which we will talk to once again in the next conference call. Moving on to our SG&A and our R&D spend. Our R&D spend is broadly consistent with our Q1 spend with a minor reduction from $8.9 million in Q1 to $8.5 million in Q2. Our spend during the first six months of the year is understandably heavily focused on our EB activities, being the Audiogel S10 product and also our AP103 gene therapy product. We've also been spending on our various post-approval commitment studies and also our paediatric study in Limitapide, which is on track to read out in 2022. The other significant study which is about to commence is our USPL study, which we expect will begin towards the end of the year. Ignoring the impact of spend on the chiasm acquisition, our SG&A spend has been consistent for the last four quarters. During the quarter, we spent $18.9 million excluding acquisition costs, which is marginally up on the $18.2 million we spent in Q1 and also marginally up on the average for quarters three and four last year of $18.3 million. We're particularly happy to have managed to contain this spend while our underlying revenues have been increasing. As we do go forward into H2, we're understandably starting to increase our preparation and pre-launch spend for AlioGel S10 in EB in the hope that the products will be approved by the FDA towards the end of this year and early next year by the EMA. Accordingly, we believe our total SG&A spend will increase as we move forward. The next key metric I'd like to focus on is EBITDA before I come back and touch on the constituent components. EBITDA is a key metric for us given it was a good proxy for our cash from operations in the year 2020. I will draw your attention to slide 11 where we adjust our Q2 operating results for non-cash items and get to adjusted EBITDA of $17.4 million for the quarter, or $27.2 million for the year to date. This compares to $6.9 million for the same quarter in 2020, or $11.5 million for the first half of last year, and is our sixth successive quarter of positive EBITDA. I will remind you that when we closed the Agerian acquisition September 19, we stated that our objective was to turn the business into an EBITDA positive business through a significant reduction in the pro forma combined operating cost base of both legacy Agerian and legacy Amrit. In particular, we transitioned a sizable number of non-customer facing roles and functions from Boston to Dublin, which resulted in significant economies of scale. We also leveraged off the significant previous experience that the management team at Amrit has from acquisitions, integrating processes, and extracting synergies. The outcome of that integration process was that we not only achieved but exceeded our objectives and expectations, and the business is now providing significant EBITDA. With the acquisition of Chiasma today, we now face a repeat exercise where we're integrating the Chiasma business with the Amrit business with a similar combination of roles and extraction of synergies. We're obviously going to leverage off Amrit's management's past experience, including the specific experience from the Agerian integration. Our intention is to promptly merge the combined teams with a view to converting Chiasma from a business which had an operating loss in Q1 this year of $18 million to a business that will be EBITDA positive for the calendar year as a whole in 2022. This is a topic which we'll come back to more at our analyst meeting in September. Before moving off EBITDA, you will note from the press release that we calculate EBITDA by adjusting for non-cash items such as intangible amortization, depreciation, share-based payment expenses, and the amortization of fair value step-up in inventory acquired in the Algerian acquisition. This fair value step-up has now been completely eliminated in Q2, as noted earlier. Going forward, we'll have similar adjustments which will be triggered by the Chiasma acquisition, including incremental intangible amortization and the amortization of the fair value step-up of Chiasma inventory acquired today. We'll provide more color on these as I noted earlier on our Q3 results conference call. Beneath the operating loss line and our operating results line and our income statement, you will note that the non-cash change in the fair value of the contingency consideration and the non-cash continued value rights expense are broadly consistent with quarter one this year. And finally, in that section of our income statement, you would note a 5.8 million charge for net finance expense for the quarter, of which $2.6 million is non-cash, and $3.3 million is the cash interest payable in the quarter on our convertible bonds and on our term debt. Before getting to our revised cap table, I'd just like to summarize our current net debt position. Excluding the convertible debenture, we have net cash of $52.6 million at the end of June, being cash of $142.9 million and term debt of $90.3 million. This $52.6 million compares to net cash at the end of March of $29.8 million, or a $22.8 million increase during the quarter. Obviously, this was largely driven by the significant EBITDA performance during the quarter and was also helped, in fact, by the fact that we are no longer paying those inherited DOJ fines of approximately $4 million per quarter, which we inherited when we acquired Agerian, and the last of which was paid in Q1 this year. In addition to our term debt, we do have a convertible loan with a principal value of $125 million, with a conversion price on this of $12.95 per ADS or $2.59 per ordinary share. Given the strong ongoing operational performance of the business and the recent Phase 3 data in EB, We believe it is likely that this will get converted to equity before it is otherwise due for payment in April 2025. As a result, we view this as more akin to equity than debt. Before moving off our net cash position, I will note that we would use approximately $25 million of our cash to clear remaining debt in the Chiasma organization and other similar costs. Chiasma will then have no debt and all deal related costs will have been paid. Before concluding, I thought I'd give some clarity on the cap table for the new Amrit post the acquisition of Kiasma. Amrit trades ordinary shares on the A market of the London Stock Exchange and ADSs on NASDAQ, with five ordinary shares representing one ADS. For simplicity, I'll confine myself to ADSs when talking about the cap table, given the vast majority of our shareholders and now share liquidity is on NASDAQ. As of today, post-close, Amrit has 63.2 million ADSs, or 63,217,036 ADSs, to be precise. And this 63.2 million consists of legacy Amrit ADSs coming into the deal of 35.9 million, ADSs issued today to Chiasma shareholders of 25.5 million, and 1.8 million ADSs, which were previously in the form of Amrit zero-cost warrants, which were also exercised yesterday. As of today, there are no warrants remaining in Amrit, with all zero-cost warrants now exercised. And likewise, no warrants are carried over from Chiasma. Amrit does have share options and RSUs in issue to directors and employees. Further details of the legacy Amrit options and RSUs are outlined in Note 4 of our financial statements today, which shows approximately 5.8 million ADS options and RSUs, with a weighted average strike price on the options of $10.33 per ADS. We're also inheriting an equity plan from Chiasma, which share options on a very small number of RSUs. In total, this could result in an additional 3.7 million AMRAD ADSs being issued, albeit the AMRAD ADS strike price for these options is from $3.41 to $72, with the majority of these options being out of the money. That is the end of my remarks. I'll now hand you back to Joe.

Thank you, Rory. I'm now on slide 12. Let me summarize by reviewing where Amrit stands today post-closing of the Chiasma acquisition. We have a revenue-generating commercial portfolio that is now comprised of three marketed products, each of them growing and addressing large, attractive markets. In addition, we have an exciting pipeline of development-stage assets with the potential to drive near- and long-term growth. There is a potential near-term approval for Oliogel S10 in a market estimated to be worth in excess of $1 billion. And we are also preparing to enter phase three with mycapsa in neuroendocrine tumors, where we estimate the global market opportunity is $1.9 billion. We have a strong balance sheet and the financial flexibility to execute on our growth plans. And finally, we have a global commercial infrastructure and experienced team in place to drive new product launches and growth. I will now hand over to our operator for Q&A. Operator.

Thank you, ladies and gentlemen. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, please press star one if you wish to ask a question. And your first question comes from the line of Brandon Fawkes. Please go ahead.

Hi, thanks for taking my questions and congratulations on another very good quarter. Maybe firstly on oleogel, granted a label is never final until we get the final label, but just given your interactions with the FDA to date, are you still thinking of a broad label there? And then should the product be approved Any commentary just in terms of how we should be thinking about a launch here? Is it a quick adoption? Should we think of reimbursement taking time? Just any analogs or any color you're willing to share at this stage would be very helpful. And then lastly, maybe just on Chiasma, on the $50 million in synergies, How should we think about timing of extracting that, just given that you have moved a lot of the infrastructure already on Agerion? So how do we think about that 50 million? Should we look at the timing that it took you to pull out the Agerion synergies, or maybe a little bit quicker than that? Thank you.

Hi, Brandon. Thanks for your questions. Good to hear from you. So we have both Mark Summeray and Sheila Frane Mark is our chief medical officer and Sheila is our president of the Americas on the line. So I think I'll ask Mark maybe to comment on the first question, which Mark was, as a reminder, how we think about the label for Oliogel. And then I'll ask Sheila to take the question on the launch, given that the U.S. is likely to be the first market in which we launch if approved. So over to you, Mark.

Thanks, Joe. Hi, Brandon. Thanks for the question. With respect to the discussions with the FDA, we are still at a relatively early stage in terms of finalizing what ultimately we hope will become the label and specifically the patient population that would be covered by the indication statement. So I can't answer your question directly. I can say that, as you know, when you look at the data and specifically the results of the primary efficacy endpoint analysis, you can see that the overall result is really driven by the difference that's seen within the recessive dystrophic EB patient population. That makes up the majority of the population that was in the study, but more importantly, perhaps, it also makes up the vast majority of the patients that we would anticipate would use the product in clinical practice. So that's where most of the unmet medical need is. If we're able to argue successfully with the FDA that physicians ought to be able to use the product in other subtypes of EB, I suspect it will be based on a sort of pragmatic argument that with a product that has a very good safety profile, physicians ought to be able to evaluate whether the product is working or not and then discontinue treatment, obviously, if it doesn't. It's that kind of argument that I think might be persuasive in terms of allowing more broad use But I think the data really are pretty clear in terms of which patient population showed evidence of benefits in terms of the primary endpoint. So I guess I'll end by saying we have to wait and see. Those discussions we anticipate will occur over the next few weeks and months.

Maybe I just add a little bit more color on that, Brandon. In terms of So Mark has identified the answer to the question on the FDA and the label. However, if you look at, and you know this having modeled this out yourself, if you look at the likely usage of the product, it is, when you model it, the vast majority of the likely usage will come in the recessive dystrophic patient population, given that those patients have more severe disease, therefore they have more body surface area percentage affected, plus these patients go on to live into adulthood. So that's the patient population in which you would expect to see, we estimate, 80 plus percent of the usage of the products. And that's the patient population in which we've seen, as you know, the greatest efficacy in this phase three. So I'll hand over to you, Sheila, and maybe you could talk a little bit about our launch plans in the U.S., if approved.

Sure. Thanks, Joe. And Brandon, I think you were asking sort of specifically about launch readiness and then time to reimbursement. So we are putting in place all of those launch plans right now. We'll talk more, obviously, as we get closer to the analyst day in September in terms of specifically what we're expecting. But I think, as you know, The high unmet medical need in this space, we don't expect any reimbursement challenges at this point. I think as we partner with payers and start to outline the clinical benefits of making sure that Oleogel S10 gets to patients as quickly as possible, in combination with our medical affairs team that's been working very closely with the patient organizations as well. So I think you're going to see a pretty rapid launch. We'll be ready for sure.

in terms of um you know that produce a date and ready to go as soon as we can brandon your other questions your other questions brandon maybe i'll address that if that's okay um i would say we've a lot of experience a number of us in the amrit management team of doing these deals um over the years and i would say to you that about 60 to 70 percent the heavy lifting is typically done within the first two quarters Now, you don't necessarily see that come through in the first two quarters because in combination with those savings, there's obviously severance costs, recruitment costs, overlap when you've got transition people leaving to replace those roles to be replaced elsewhere. So it tends not to have a massive bearing in the first quarter, somewhat in the second quarter. By the end of the second quarter, you tend to have about 60% to 70% of the savings extracted, and then it's on a declining scale thereon. So I hope that gives you a little bit of color, Brandon, and it's something we will touch on in greater detail when we have the Amnesty in September.

Great. Thank you, everyone. That was all very helpful.

Thank you. And your next question comes from the line of Michelle Gilson. Please go ahead.

Hi. This is Michelle from Canaccord. Congratulations on the quarter. I was hoping that, you know, you could – maybe help us understand the European opportunity for my CAPSA a bit more. You know, what territories might be profitable? You know, how big is the market for acromegaly? And, you know, any considerations around pricing in Europe that might be different from the US? And then, you know, In the U.S., I don't think, did you disclose what the sales for MICAPSA in the second quarter were? And, you know, if you're starting to see some of the, I guess, any signs that some of the repositioning efforts for MICAPSA in the U.S. are starting to gain traction. And then just one quick one on Phil Suvez. You know, you have your day 74 letter now. Were there any filing issues identified

Thanks, Michelle. All good questions. So let me try to address maybe the first two, and then I'll hand over to Mark to talk about the filseves filing. So in terms of mycapsa in Europe, you've identified that pricing is going to be more challenging in Europe. That is absolutely the case. In rare and orphan diseases, that is very often the case, in fact. If you look at our performance of our existing portfolio, however, we have been very successful, despite that fact, at gaining market access in Europe, despite significant price pressure in that territory. For both Lomitapide, when we first acquired Lojuxtafrump in December 2016, One of the things we did incredibly well actually was to gain market access and reimbursement across the European markets. And subsequently, since acquiring MetroLeptin in Europe, equally we have gained and we have announced market access. So we have a very strong track record actually of being able to accomplish that despite the the obvious issues in terms of price pressure, et cetera, in Europe. So we will apply that same playbook to MICAPSA across not just Europe, by the way. We have global infrastructure. So as you've heard today on this call, we had significant orders out of LATAM. So we have a LATAM infrastructure. We have significant infrastructure across the Middle East, for example. and we see opportunities there. And we have a global distributor network built beyond that. So we very much see that there's an opportunity out ex-US for this product. And it will be as it is with our existing portfolio of products on a country-by-country basis. So we will look at each country and see what the market opportunity looks like before deciding to invest and launch. You asked about the market opportunity. The addressable market, we believe, globally for the existing indication for MICAPSA in acromegaly is circa $800 million, of which approximately $400 million is in the US. And that means ex-US, there is a $400 million market opportunity for MICAPSA. In terms of the second question you asked, which was sales of MICAPSA in Q2, We haven't disclosed that. The transaction just completed, so we have not had our hands on this product as of yet. Well, we have as of today, but it's literally one day. So what I will say is the direction of travel is in line with our expectations, and we're excited about the potential for the product. We see that the market adoption is picking up and there's a significant opportunity, we believe, now to go and drive that, given the significant call point overlap I alluded to in my remarks earlier. And we will increase both the breadth and depth of our U.S. sales force in endocrinology through this transaction. And that's going to help us not just drive my CAPSA, given that we've already got those existing relationships with the community endocrinologists across the US, so we can leverage those relationships in terms of driving my caps to growth. And also, given that increase in breadth and depth, we believe that that can also help drive metrolaptin in the US. So hopefully that gives you a little bit of color. We will, as I said in my previous remarks, provide an update in September. So give us a little bit of time to... get our feet under the table, so to speak, and grasp hold of this product. And we will, in a short time frame, come back in September to the market with a virtual analyst day. And we will provide color then. So the increasing guidance that we gave, revenue guidance earlier, did not include any contribution from my CAPSA and clearly there we would expect there will be a contribution from my CAPSA this year and we will we will update the market then and and we will give you that color so and then mark maybe I'll hand over to you on the filter there's any any issues being reported back on the filing yeah Michelle so this is a quick one actually the answer is no so we have

had our mid-cycle review meeting with the FDA. And that is an opportunity for the review division to give an update on progress with their review of our submission. And I can just make a general comment about the tone and the content of that meeting, which is that it was all very, very much a straightforward meeting that did not raise any concerns specific issues, although it is important to realize that even though it's mid-cycle, there's still a substantial amount of review that the review division have to do ahead of them. But going back to your question, though, the answer is no, we do not have any filing issues.

Okay. Thank you so much for taking my questions, and congrats again on the quarter.

Thank you.

Thank you. Your next question comes from the line of Max Ehrman. Please go ahead.

Great. Thanks very much for taking my questions. And congratulations on a strong quarter. Firstly, I just would like to understand, obviously, the quarter was very much driven by this large LATAM order. And it's trying to understand how predictable any of those are. Is there any ability to understand? I know you flagged this at the end of the first quarter of the results, but clearly it was a much bigger order than we'd seen in the past. So just try and get a way we can perhaps estimate those rest of world or LATAM orders coming through. And then, again, on my left, the performance seems to be stronger in the U.S. than in Europe, whereas I think you're getting, you know, you had UK and French reimbursement agreed. So I was expecting maybe a stronger growth to come from the EMEA region rather than the U.S., which has also been a stronger area. And then, finally, just on my caps, you know, in terms of integrating the Salesforce, just to get a little bit more color on what the timing of that would be and how big a Salesforce you're expecting, how many you're going to add to that, the combined company Salesforce.

Thanks, Max. Thanks for your questions. So let me... maybe address the My Left issue first and then I'll hand over to Rory to speak to maybe the last time predictability question you asked. And then Sheila can take the final question on the capital sales force in the US. So you're right, we're enormously proud actually, Max, that we're growing our My Left business once again. When we acquired this business in the U.S., that was not the case. The MyLept business in the U.S. was actually in decline, and we've been very successful at turning that around and now growing that business. At the time when we acquired MetroLeptin, we said to the market that we had a strategy that we were going to implement, and using our rare disease playbook and know-how. And we would deploy that know-how and playbook to the U.S. market. Having used, deployed that market, that strategy very successfully prior to that, as I alluded to earlier with Lamentapide in Europe, we then applied the same methodology to the U.S. metro-left-wing business. And that is now, as you alluded to, growing once again. So that's enormously pleasing. You're right, if you look at the Q2 EU metraleptin business versus Q2 2020, it's flat, right? Which is, as you say, it's surprising. But it's really a timing issue, Max. It's just a timing of orders. So when I look at the underlying patient growth, you see significant growth. So you would expect to see the EU growth overall this year will be very, very strong. And actually, you know, in line or exceeding expectations. So that's really more a timing issue. Rory, do you want to take the predictability point on the lifetime order?

Yeah, maybe just add to the previous point first. Just to remind you, Max, This time last year, what we said was we talked about an order for LATAM and whatnot, but we also talked about how orders had been pulled forward from Q3 into Q2 because of COVID, and it was very hard to quantify that. So there was perhaps an element of that going on with the prior year comparison, okay? In terms of the Brazil orders, LATAM orders from left to left, they tend to be, they are tender-based, I guess. As with all of these tenders, it depends on the availability of funds. It also depends, the tenders themselves can be infrequent when those tenders happen. Even though we're the only supplier of this product on the globe, you tend to find other people sometimes tender for the same and then come looking for the product. So there's an air of unpredictability that it lacks. It's hard to be definitive when an order will actually come through when a tender will be completed. We've historically seen two orders per annum, albeit going back to 2019, I think it was, it was little or none. But last year we've seen two, albeit of smaller orders of magnitude than the 12.1 million we just did this quarter. At this point in time, there's nothing on the horizon for the rest of the year. It's not to say it won't happen, but there's nothing on the horizon for the rest of the year, and hence the guidance of 210 to 215. Hopefully that answers your question.

And maybe, Sheila, could you answer Max's question on the Macaps to Salesforce in the U.S.?

Sure. We're going to meet with them today, actually, Max. So they have a current field deployment model of 16 sales reps focused primarily on pituitary centers and have had that for the last year or so. We expect, as we look now, you know, we were staffed for Juxtapid and Milept in the U.S. as the core AMRIT business. We're now adding MICAPSA. As Joe's talked about already, we do believe that there's an opportunity for greater breadth across the endocrinology market in combining the two organizations together. And then, of course, we also have to be ready for a launch into the medical dermatology space for EB later this year. So we're taking a look at the entire U.S. field deployment, number one. And then number two, in a post-COVID world, There's also sort of what is the new commercial model going to look like. And so we're doing all of that work. We can provide more color as we get closer to Q4. And so we're just doing all the analysis right now and getting to know the folks from MICAPSA and then taking a look at what we currently have. There's obviously lots of transition and that kind of thing that we're just heading into now. So we'll give you more detail in September.

Great. Thanks very much. Thanks, Max.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone keyboard. And your next question comes from the line of Douglas. So please go ahead.

Hi. Good morning. Thanks for taking the question. I'm sorry there was a little noise. Just in terms of MyCapsa and where you are taking over this product in terms of the launch and your expansion with your Salesforce, do you find – that most of the, or do you think that most clinicians are aware of the product, or do you think that to some extent you're going to need to do some education around the product, and how does that affect the sort of trajectory that you might expect taking over the product? Thanks. And I have a follow-up.

Thanks, Douglas. Again, Sheila, maybe I'll let you handle that one.

Sure. I mean, I think, as you know, my capsule launch happened right in the middle of COVID when a lot of the pituitary centers and a lot of the key academic centers have largely been closed and difficult to access. So I think what I would say is, do I expect to have education? Of course, it's still in launch mode. And what you might expect under a non-pandemic situation, you could achieve much faster uptake in terms of making sure that physicians are aware of and educated on the value of the product. I think that that has certainly been delayed just given the pandemic environment. Having said that, at least the key physicians and patients for that matter, I mean, the team at Chiasma did a really good job of making sure that there's really strong awareness And I think now the challenge for us is going to be to make sure that, you know, you've got stable patients in the context of a pandemic environment and you need to switch them to this oral therapy for a number of reasons. So I think that's where we'll take some time with our medical affairs colleagues as well as our integrated sales force in order to really see where is that awareness and where's the willingness and desire to switch and what's the value of that? So that's kind of where we're heading. In terms of the trajectory, I think as you've seen across the entire industry, you know, in launching products during the pandemic has certainly shifted significantly what you might expect in terms of time to peak. So until we get a chance to really get, I think the expression that's been used today is our legs under the table, our feet under the table. I really don't want to speculate on what we think that trajectory is going to be, but certainly we know that it has been slower for everyone trying to launch during the pandemic. So we're hopeful that some of the return to some version of normal in the U.S. will happen rapidly without this fourth wave coming.

Great. That's helpful. And then just on Oleogel, obviously you're hoping for as broad a label as possible that you recognize or sort of noted that it was in the recessive population we saw the most clinical benefit. I'm just curious how you're sort of thinking about positioning the product to ensure physicians have a good experience with the product and use it appropriately because you just obviously don't want to have them use it perhaps in patients where results aren't as good as in the recessive population and then decide broadly that the product might not be as effective as I think we all agree it is.

Thank you. Thanks, Douglas. Yeah, Mark has already spoken to the label, so maybe Sheila, on the positioning, do you want to take that one?

Yeah, I'm... You know, we're obviously looking at all these scenarios, and so I think our expectation is, given the high unmet medical need and the fact that this is the first and only, or would be the first and only when approved product, I do think that... we will be very clear and specific in terms of our promotional approach to the marketplace. But also we do, certainly we're very optimistic that, you know, the product will see demand right at approval across the patient population, just given the high medical need. I mean, this is one of the most emotional areas that I've ever worked in and seen. And I think you're going to see the engagement with the patient organizations and just the desperation that these patients have in terms of making sure that they get access to treatment, I think you're going to see pretty significant demand at approval. And again, you know, in terms of positioning the product overall, we believe that this is the kind of product that patients will want to have, you know, close contact. More like, if I think about an analogy, more like a backbone-type therapy, that you would always have it on hand, irrespective of what other products might come to the market later. But I think being the first and only will mean that we'll have significant demand at launch, and we're really excited about what we can do for patients.

Well, and if I can, just one quick follow-up, I mean, I guess I think I completely understand you're sort of the sense that there'll be significant demand just given the unmet need across all the patient subtypes. Do you want to try to set expectations across the different subtypes just given what we saw in the clinical trials? Because obviously there were signals in the populations outside of recessive, but it wasn't as strong as what we saw in the recessive population.

Yeah, maybe I'll take that first, and then, Shili, you can chime in with your comments as well. It's going to depend on the label. That's clearly going to be a significant impact on how we think about commercializing the product. As Mark has spoken about earlier today, that remains to be seen from the FDA. In terms of market opportunity, I've already alluded to that 80% of the market opportunity for the product is in the recessive dystrophy population anyway. And that's where we clearly have, you know, the strongest signal. Albeit we do have efficacy data in the other severe subtypes as well. So, you know, it's going to depend on what that label looks like in terms of how we can promote the product. Sheila, I don't know, do you have any additional color you'd like to add there?

No, I think you've covered it all. I think we're, you know, again, we're just so it's such an incredible opportunity for us to be able to bring this product to the market. And so I would just say we will be ready and we will do, um, everything we can to make sure that patients can access this product as soon as we get approval. And we'll certainly be promoting it on label once we finalize the label with the FDA.

And to your point, I mean, um, I similarly have never worked in my medical career in such an emotive area as EB. It truly is the worst disease you've never heard of. That was a phrase coined by Brett Copeland, the president of Deborah of America, the patient advocacy group for EB patients. When you meet and speak to these patients and their carers, it's truly horrific disease. And they are desperate for anything that's going to make life even a little bit better. So we're proud that we have the first product, first and only product to date, that has shown efficacy in this patient population. And we think that there's a significant mathematical need here.

Okay, great. Thank you.

Thank you. And your next question comes from the line of . Please go ahead.

Thanks for taking my question, and congrats on the quarter. On metraleptin, , can you talk a little more about the timing in terms of how long you expect the trial to take to enroll and when can we ultimately expect data? And furthermore, based on your conversation with clinical investigators, have you guys heard any comments about how the Delta variant might impact enrollment? Thanks.

And Mark, maybe I'll hand that over to you. So the question was around the timing of the PL study for metraleptin.

Yeah. Yeah. So the study that we anticipate conducting will enroll patients in a double-blind placebo-controlled fashion for a total of one year participation. So each patient will be in the trial for a year. We expect it will probably take about a year to enroll a study. So, you know, and then there's obviously time you have to add on at the end for the Database lock cleaning and lock process as well as the analysis and the report writing etc so To try to answer your question if we if we start the study towards the end of this year, which is our plan Then if we take a year to enroll the last patient would be in the study roughly a year from now with one year participation, so that's two from now, so the end of 2023 and then into probably the middle of 2024 when we have data data analysis and a report for um so uh in terms of the impact on enrollment by the delta variant you know i think that's a really difficult one to answer and we're all aware of the impact that it has had historically up till now on disability conduct clinical trials um Things have improved. Let's hope they continue to improve. Certainly, we conducted a detailed feasibility assessment. And we've interviewed all of the sites that we think, in different countries, that we think would be eligible to participate. We have a very accurate view of our ability to enroll the study and where we need to go. I think the timelines that I just mentioned to you are certainly achievable unless something happens that is very surprising, which one, of course, can never be sure won't happen. And I mean, when I say that, I think, you know, the impact of another variant beneath the lockdown. So I'd be reasonably confident on those timelines, notwithstanding that possibility.

Thank you.

Thank you. That does conclude the question and answer session for today. I would now like to hand over back to Joe Wiley for closing.

Thank you, operator. Thank you all for joining us today. We look forward to speaking with you and hopefully seeing you again soon. Thank you.