This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk33: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Appellus Pharmaceuticals First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's call is being recorded. I will now turn the call over to your speaker host, Meredith Kaya, Senior Vice President, Investor Relations and
spk09: Strategic Finance. Please go ahead.
spk17: Good morning, and thank you for joining us to discuss Appellus' First Quarter 2024 financial results. With me on the call are co-founder and chief executive officer Dr. Cedric Francois, chief operating officer Adam Townsend, chief medical officer Dr. Caroline Baumel, and chief financial officer Tim Sullivan. Before we begin, let me point out that we will be making four looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. Now, I'll turn the call over to Cedric.
spk25: Thank you, Meredith, and thank you all for joining us this morning. 2024 is off to a strong start. CIFOVRI continues to deliver robust growth in the first quarter, driven by an acceleration in demand, resulting in $137 million in net sales, up 20% compared to Q4. And Paveri is also making a difference for patients with P&H, generating $26 million in revenue for the quarter. And we have a number of exciting opportunities to potentially expand and Paveri into new indications. We are one of the rare companies in our industry to have two drugs approved in just three years, a testament to the strength of our science and our incredible team. As a result, Paveri is now well positioned strategically, operationally, and financially to deliver significant long-term value to our shareholders. CIFOVRI is key to delivering this long-term value, and the growth in Q1 underscores the strong demand we continue to see from both physicians and patients. Through March, eye care professionals administered 250,000 CIFOVRI injections. And in the first 12 months of launch, CIFOVRI generated over $400 million in sales, substantially exceeding both our and Wall Street's expectations. This is extraordinary performance for any new product launch. CIFOVRI's leadership in the market is driven by three important factors. First, treatment with CIFOVRI results in increasing effects over time, with up to 42% slowing of GA progression in year three of GAIL, building on the meaningful effect demonstrated in Derby and Oaks. Second, CIFOVRI has a well-documented safety profile based on extensive experience both clinically and in the real world. And third, CIFOVRI offers flexible dosing as described in our label, which means that patients can benefit from CIFOVRI's impressive clinical profile in as few as six doses per year. As the market leader, we are only getting started. Our performance today reaffirms our belief that CIFOVRI has the potential to become a multi-billion dollar product in the US alone. We are also working to bring CIFOVRI to patients worldwide. We recently announced that the European Medicines Agency reset the review of the CIFOVRI application back to day 180 of our initial assessment, which is the last phase of that procedure. This decision follows a judgment made by the Court of Justice in the EU regarding the competing interests of experts. The decision for CIFOVRI is strictly procedural and not related to the CIFOVRI application. The remainder of our review is expected to be led by the original reporters. We are working closely with the CHMP and EMEA on next steps with the upcoming CHMP opinion anticipated no later than July. Shifting to MPAVETI, since its launch in 2021, MPAVETI has transformed the standard of care for patients with PNH. MPAVETI was the first available treatment proven to effectively control both intravascular and extravascular hemolysis, two hallmarks of PNH, while also significantly improving anemia and protecting the majority of patients from transfusions over the long term. We continue to serve PNH patients who may benefit from MPAVETI, and we believe it has the potential to become a -in-class treatment option for additional high unmet need areas. Our biggest near-term opportunity is in C3G and ICMPGN, two rare and devastating kidney diseases that often start in adolescence. There are currently no approved treatments for these diseases, which often lead to kidney failure or lifelong dialysis. Our phase two NOBL data shows unprecedented effects on disease activity, including complete clearing of disease activity in 40% of the treated patients at week 12, and reductions by one or more magnitudes of intensity in 80% of treated patients. We plan to share the 52-week data from the NOBL study at the European Renal Association meeting later this month, and we look forward to sharing the top-line data from our phase three Valiant study in mid-2024. Separately, I'm sure many of you saw the recent news out of New York University regarding the first ever combined mechanical heart pump and big kidney transplant. This was a historic event, and we are thrilled that MPAVETI played a role in making this xenotransplant surgery a success by helping to protect the kidney from potential rejection. MPAVETI was also involved in the xenotransplant surgery performed at Mass General Hospital in March by helping to stabilize the transplanted kidney when it showed signs of early rejection. And while the research is early, and we have a lot to learn still, we are encouraged by the potential of MPAVETI in xenotransplantation. Overall, I am thrilled with the progress we have made so far in 2024. With two commercial products and an emerging pipeline, which we are excited to share more about later this year, we remain steadfast in our vision to develop life-changing medicines for people living with some of the most challenging diseases. And with that, I will now turn it over to Adam to discuss our commercial activities.
spk27: Thanks, Cedric, and good morning, everyone. I will jump right in with Ciphovery. As Cedric shared, Ciphovery sales over the past 12 months have been strong. Initially, our success was largely driven by fast uptake from early adopters. More recently, we've seen both new patient demand and an increasing prescriber-based driving sales. While we continue to focus our marketing efforts on retina specialists, we
spk40: are
spk27: also educating the referring eye care provider network on the importance of patients with GA getting the treatment they need. Further, we are investing in -to-consumer marketing initiatives to increase patient awareness and education about Ciphovery and GA. Suffice to say that our efforts are paying off. In the first quarter, we distributed 72,000 commercial doses and 5,000 samples. The first three months of this year were the three largest volume months since launched
spk08: through Q1.
spk27: Growth rates varied monthly with a slight decline in February as compared to January, and then a re-acceleration in March, resulting in some of the largest demand weeks to date and our biggest month of the quarter. Additionally, in Q1, we continue to see a double-digit number of new sites come on board each week with over 2,000 sites of care now using Ciphovery across a broad range of practice types. We are thrilled by the continued growth we have seen in the second quarter so far across both new and existing patients. It has been an incredible launch, and now that we are in its second year, we will be going back to sharing key metrics with you as of quarter end. Regarding vasculitis, the rate remains rare at approximately one in 10,000 injections. What we have learned is that this appears to be a first injection phenomenon, with the rate following a first injection estimated at about one in 4,000.
spk19: Given the extensive real
spk27: -world experience with Ciphovery to date, retina specialists are more confident that these rates are rare and stable. And we are seeing many physicians who had either paused or decreased their use now start to use Ciphovery again or use it in more of their patients. Shifting gears to longer-term dynamics, Ciphovery remains the number one chosen treatment for GA
spk37: with approximately
spk27: 85% of the treated market. We are confident that it will remain the market leader due to its strong efficacy, well-documented safety profile, flexible dosing, and the robustness of our overall data set. Even more, we are only in the early stages of a large and growing market. The estimated prevalence of GA patients is up to 1.5 million in the United States. Today, based on a recent claims analysis, patients treated are estimated to make up 12% of the market as defined only by those patients who have been diagnosed and are managed by an ECP. However, many GA patients are not yet diagnosed or have not been referred to a specialist. In fact, only a small portion of newly diagnosed patients currently being treated with Ciphovery are referrals. This means there continues to be a huge opportunity for Ciphovery as the vast majority of GA patients have not yet been treated. Now that we are in year two, we are executing the next stage of our commercial strategy. Remember, we are launching a transformative medicine for a disease that has never had a treatment available. So we have learned a lot about what drives both physicians and patients. Let me start with physicians. We plan to further increase our reach within existing physician targets, as well as expand our use amongst those who have not used Ciphovery yet.
spk36: We are
spk27: refining our messaging as we better understand what is resonating. At launch, our messaging initially focused on efficacy then shifted to safety last summer. Now we have pivoted back to leading with efficacy, highlighting the positive results from our three-year GAEL extension study in addition to our OAKS and Derby data and the multiple post-hoc analyses that demonstrate functional benefits following Ciphovery treatment.
spk40: We are
spk27: also broadening our reach to provide disease state education to other referring eye care providers who see tens of thousands of GA patients. As the market leader,
spk12: we are
spk27: educating those doctors on the importance of GA treatment so that patients see a specialist who can then decide the right treatment approach. Moving to patients, another key learning over the past year is how motivated and actively engaged patients are in their treatment decisions.
spk07: As you may have
spk27: seen in our unbranded DTC campaign, our initial message was focused on increasing awareness of GA and encouraging patients to see their eye care professional. These efforts have netted very positive results, including thousands of new GA diagnosis and a significant number of patients starting Ciphovery treatment. We recently launched a branded DTC campaign with the focus now on encouraging patients to talk to their physicians about GA treatment with Ciphovery. Our goal for this campaign is to increase awareness, access many more patients, and accelerate the speed to diagnosis and treatment of GA. Now let me shift to Empervely for PNH. Revenues in the quarter were $26 million. Compliance rates remain incredibly high at 97%, and the product also continues to have a compelling safety profile. With over 1,600 patient years of systemic plexotococcal exposure, there have still been zero cases of meningococcal infection and very low rates of thrombosis. But obviously, we are now seeing heightened competition. With a new entrant in the market, we anticipate pressure on Empervely sales, at least for the next six to 12 months. Although we have a strong foothold, I want to be realistic that demand is expected to be flat in the median term. We still expect to see new patients starting on treatment, but we also expect to see some patients switching to an oral. The Empervely team is laser focused on emphasizing the real world profile of Empervely with physicians, including its three-year efficacy data and strong safety profile. We have confidence that this profile will drive some physicians and patients to return to Empervely over time. While still very early, we've already seen a few instances of this. Finally, we are particularly excited about the opportunity to potentially expand Empervely into C3G and primary ICMPGN. These are two devastating diseases with tremendous unmet need and a patient population that is three times bigger than PNH. If approved, we will be able to leverage much of our existing infrastructure, such as utilization of our field-based teams to reach nephrologists and deliver Empervely to patients and physicians. Caroline will give more detail on the opportunity we have for these diseases. Caroline?
spk16: Thanks, Adam, and good morning, everyone. Yes, we are really looking forward to the top-line data from our Phase III Valian study in C3G and ICMPGN, which we expect mid-2024. I'm going to focus my remarks today on this upcoming development milestone, providing some background on the patient population as well as on the study. C3G and ICMPGN are debilitating kidney diseases caused by uncontrolled complement activation and breakdown of C3. Symptoms include protein and blood in the urine, swelling, fatigue, and high blood pressure. These diseases are estimated to affect 5,000 people in the United States and up to 8,000 in Europe, with the first diagnosis typically occurring in adolescence. Within five to 10 years of diagnosis, approximately 50% of people living with C3G and ICMPGN ultimately suffer from kidney failure, resulting in either a kidney transplant or lifelong dialysis, both of which are highly burdensome and life-threatening to the patient. However, neither are curative, and there are no approved therapies for these diseases. The incidence of disease recurrence is high, and up to 50% of patients lose their kidney transplant due to the disease recurrence. Some patients may have multiple transplants in their lifetime, depending on their age at the first diagnosis. The Valiant study enrolled 124 patients with either C3G or primary ICMPGN in a randomized, placebo-controlled, double-blinded, multi-center study designed to evaluate pegsidocopaline efficacy and safety. It is the only phase three study to include a broad population inclusive of adolescent and adult patients with native and post-transplant forms of both diseases. Study participants were randomized -to-one to receive pegsidocopaline or placebo twice weekly for 26 weeks. Following this 26-week period, patients moved to a 26-week open-label phase in which all patients received pegsidocopaline. The primary endpoint is a log-transformed ratio of urine protein to creatinine ratio, or UPCR, a key marker of disease progression in all patients at week 26 compared to baseline. Physicians consider a statistically significant response to the primary endpoint as clinically meaningful in this disease. Key secondary endpoints include additional measures on both UPCR and on eGFR. We are very excited about the potential opportunity that pegsidocopaline may have on patients with C3G and ICMPGN. Turning to psychophobery briefly, we participated in several global medical meetings over the past few months. The retina community has been highly engaged with the APELIS team, especially regarding our latest data from the Gale study, which demonstrated up to 42% slowing of GA growth in year three in non-symphobial patients compared to projected sham. These increasing effects have never been shown before in any GA study. Finally, before I hand it over to Tim, I want to extend a warm welcome to Dr. Phil Ferrone, who joins us as our chief medical retina advisor. I have known Phil for a long time, having worked on multiple clinical trials and other programs together throughout our careers. Phil is a leading figure within the medical community with deep expertise in patient care and retina research. He is also a past president of the ASRS and has been on its board for 18 years. Given Phil's in-depth experience with psychophobery and overall retina experience, he is uniquely positioned to help us continue to bring psychophobery to GA patients and develop our retina pipeline. I know I speak for all of us at APELIS when I say we are thrilled to have him on board. Now I will turn the call over to Tim for a review of the financial. Tim?
spk28: Thank you, Caroline. I will provide a brief overview of our financials and you can find additional details in the press release that we issued earlier this morning. Total revenue for the first quarter 2024 was 172.3 million, including 137.5 million in psychophobery and 25.6 million in Emphavalley US net product revenue. This compares with 44.8 million in total revenue in the first quarter of 2023. Turning to the rest of the P&L, for the first quarter, cost of sales was 20.2 million. R&D expenses were 84.7 million. The reason R&D expenses are slightly higher in Q1 versus Q4 is because there was a $15 million one-time non-cash expense in Q1 related to the discontinuation of CAD. SG&A expenses were 129.5 million and we reported a net loss of 66.4 million. While R&D and SG&A may fluctuate on a quarterly basis, we continue to expect our total operating expenses for the full year 2024 to be less than our total expenses in 2023. Turning to our balance sheet, as of March 31st, 2024, we had 326 million in cash and cash equivalents. As Cedric mentioned, we are in a strong position financially. With our existing cash combined with projected revenues, we continue to believe that we have sufficient cash to fund our operations for the foreseeable future. I will now hand the call back over to Cedric for closing remarks.
spk25: Cedric? Thanks, Tim. We are highly encouraged by the start of 2024 and excited for the value driving milestones on the horizon. I want to emphasize our determination to be the leader in complement medicine. The progress across our pipeline, exemplified by, but not limited to, Cephovery and Empavity, is presenting us with opportunities to create meaningful therapies and substantial value for shareholders. We appreciate your continued support. We truly believe that the best is yet to come. Let us now open
spk09: the call for questions. Operator? As a reminder, to ask a question, please press
spk33: star
spk09: 1
spk33: -1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. In the interest of time, we ask that you please limit yourself to one question and one
spk09: follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Umar Rafat with Evercore ISI.
spk33: Your line is now open.
spk32: Hi guys, thanks for taking the question. This is actually John Muller on for Umar here. I would love to start with the competitive dynamics in GA. Obviously, we heard recently from your recently launched competitor that they expect to see 25% market share already and go into 40% by the end of the year. That doesn't jive with what you just told us, saying you have 85% market share. So maybe you could put into context some of the differences, how we square that circle with the market share that they reported versus you reported and maybe a little bit about how you expect competitive dynamics in GA to evolve over the course of the year as a new competitor launches. Thank you, John. Great to hear you, Adam.
spk27: Thanks, John. It's Adam. So yeah, firstly, we are thrilled with the 20% growth we saw in Q1 versus Q4. So obviously, there are many ways to estimate market share. And what we do here is that we look at market share as patients treated with GA. We think is the most robust way of measuring market share. You then know that the drug is actually being used within a patient. A status calculates market share based off of Biles distributed. So again, patience is the number one choice for us when it comes to market share. It means you can rule out things like Vilesat at wholesalers, Vilesat in hospital fridges and doctors' fridges. And also it accounts for frequency of administration, right? We tend to be a very much strong every other month drug. And by looking at patients, you can be much more specific than that. So with a number one chosen GA therapy, I continue to see that progressing as we progress through the year. This is a massive market. We're chosen first across new patients and continued physicians' choice. We have the potential to be a multi-billion dollar product in the US. And I expect that to continue as we push to execute our plans for the rest of
spk09: the
spk32: year. All right, thanks. That makes a ton of sense. And I guess as we think about moving beyond that US market, which as you say is very robust, I have a question about the EU process that now seems to have been restarted or set back or gone back to the original rapporteurs. Can you just bottom line for us? Is that good news or bad news? Does this increase the likelihood or decrease the likelihood of EU actually getting approved at some point? Thank you, John. In
spk25: terms of the odds of approval, quite frankly, we think nothing has changed. This is a procedural delay that was caused by a lawsuit that had nothing to do with us between the EU and another company. So we're gonna have to wait a little bit longer, but we think that the odds of approval
spk09: stay the same. All right, thanks very much. Thank you. Thank you. One moment for our next question.
spk33: Our next question comes from Azin Ahmad who would think of America's securities. Your line is now open.
spk41: Hi, guys. Good morning and thanks for taking my question. I just wanted to get a sense about how you're seeing at the rate of growth. We saw on one queue, we know that you had impact several insurances needing to be reset, but now that that's largely or completely behind you, can you talk about the general rate of growth and whether or not the rate of growth is starting to flatline or one queue is gonna be a seasonal effect going forward? Thank you
spk25: so much. You were breaking up a little bit. I think your question was whether the rate of growth continues to be in line with what it was before for safe overrides, right?
spk41: Yeah, with the exception of one queue being impacted with the insurance reset.
spk24: Okay,
spk26: yes, excellent. Thank you.
spk27: Adam? Thanks, Azin. So yeah, for us to see 20% quarterly growth one year into the launch, I think it's an incredible indicator for long-term success. Also remember that last year, October to December, we had a better understanding of our efficacy profile with the three-year GAIL data in November, and we're gonna continue to push that for the remainder of the year. This large market, we believe, is driven by efficacy. We're incredibly well positioned for strong future growth, both in the near term and the long term. And we continue to see that strong growth into Q2, and we're excited for our next earnings call where we can share a lot more details about
spk42: it. Okay, thank you.
spk09: Thank you. One moment for our next question. Our next question comes from Anupam
spk33: Rama with JPMorgan. Your line is open.
spk02: Hey guys, this is Priyanka An for Anupam. And just building up a little bit on the first question, how are you thinking about the dynamics around the November regulatory action for Iserbay and what various scenarios could do to market share?
spk25: Thanks. Thank you so much for that question. We do not want to comment on our competitor. You will have to ask them about that. But of course, these are all elements that will factor in to where ultimately the landscape ends. I think what really stands out here is that this market is absolutely enormous, unfortunately because there are so many patients and we have only begun discretion service.
spk02: Gotcha, thanks so much.
spk09: Thank you. Thank you. One moment for our next question. Our next question comes from Salveen Richter with Goldman Sachs. Your line is now open.
spk47: Good morning, thanks for taking my question. Could you just speak to the magnitude of seasonality impact in the first quarter? And then regarding your launch here, maybe help us understand in the first quarter what new prescribers and new patients look like in terms of uptake here and as well as follow-up doses. Thank you.
spk25: Thank you, Salveen, great to hear you.
spk27: Thanks, Salveen. So yeah, March was the strongest month for our first quarter, so February dipped a little bit. And as you know, right, this is the first time we learned about seasonality with CIFOBRI, with all of the work that we did for insurance, recertifications, plus the impact of storms. Agnostic to that, et cetera, and that seasonality, we still saw great, strong growth. So, and we're seeing that growth continue into Q2. As Cedric has said earlier in the previous question, this is an incredibly big market of which we think the profile of our drug with its strong efficacy, well-documented safety, flexible dosing, and the unmatched data that backs all of that up is gonna be incredibly strong for us moving forward. Q2, the team is laser-focused on executing our plan
spk09: and we are the number one picked GA treatment. And as you know, we're at a very high level Thank you. One moment for our next question. And our next question comes from Igor Nachomovits with Citigroup. Your line is now open.
spk29: Guys, thank you so much for taking the questions. I had a few, Adam, on some of the commercial dynamics. Could you comment at all on switching rates, either from Isorva to Cyphovir or vice versa? And then you mentioned there are about 2,000 sites of care that you've already seen uptake. Could you comment what percent of those are exclusively stocking Cyphovir? Or is there a fraction that's stocking both drugs and is there a fraction that's just stocking Isorva? And then you mentioned that the rate following the first injection on ROV was one out of 4,000. I'm not sure if I misheard that. Can you just comment, was it one out of 4,000 or a different number? I would have thought it would have been lower if it was the first injection phenomenon with a rate of 0.01, thanks.
spk27: Yeah, Igor. So switching, so again, we have the strong majority of new patient starts. They choose Cyphovir. No surprise, right? Isorva's J-code is now into action. We'll see some fluctuations on new starts as we did with our J-code. But the strong majority of new starts choose Cyphovir. I think that's a very positive metric moving forward. Yes, we have over 2,000 sites of care and my very nerdy metric continues that we get double digit new sites starting Cyphovir every week. And that has been the same since the beginning of the launch. That's a very strong indicator of demand. Some sites share both drugs. There are certain sites that are Cyphovir-only sites, predominantly Cyphovir. They tend to choose Cyphovir for the efficacy of the drug and the data sets that supports that efficacy. There are one or two sites that during vasculitis did switch to Isorva, but we've also started to see those sites come back. And we've started to see physicians who did pause during last year's vasculitis conversation have started to come back too. So the trends are very positive for what is gonna be a very large opportunity
spk31: in GA.
spk09: Oh, you also had a question on vasculitis rates.
spk25: Yeah, I was, thanks. Yeah, sorry, you got ahead. This is Cedric. So the rate has been stable since the very beginning at about one in 10,000. And this is predominantly a first injection phenomenon where the odds are about one in 4,000, which is in the same range of what you would find for, for example, infectious endothelmitis. But it is really that first injection. So if you are a physician with a patient, that is a conversation that you can have. After that, we believe that the very low vasculitis rate is in line with what you would
spk29: find for endothelmitis. Oh, I understand what you're saying. I thought you said the one in 4,000 was for the second and third end subsequent, but it's for the first. I get you, thank you.
spk24: Only the first injection,
spk33: correct? Right,
spk29: yep,
spk33: yep. Thank you. One moment for our next question. And our next question comes from Steve Seathouse with Raymond James. Your line is now open.
spk22: Hi, thank you. This is Nick on for Steve. We just wanted to clarify, if you're able to submit new data, whether it's long-term Gale data, functional analyses, or real-world safety data as part of the updated review process in Europe. Thank you.
spk09: Thank you so much, Steve.
spk25: So we are allowed to make changes and submit new data as part of the first review. It is in the appeals process that that is
spk22: not allowed. Thank you. And one quick follow-up. Are you able to comment on how many patients have been treated with Cyprovir to date?
spk09: That is not a number that we provide. Okay, thank you. Thank you. Thank you. One moment for our next question.
spk33: Our next question comes from Colleen Cousy with Bayer. Your line is now open.
spk23: Great, good morning. Thanks for taking our questions. Adam, you commented on a slight dip in February. Is that a factor of every eight weeks dosing or what do you think was driving that slight dip? And then can you just comment on inventory in the quarter? I think our math is showing us a slight drawdown in the quarter, but could you just comment, please?
spk27: Hey, Colleen, yes. So yeah, I mean, obviously February was a shorter month and I think there's always a little bit of seasonality in January, February, and March that we've seen, but we picked straight back up in March and continue to see growth into Q2. Now, we previously announced mid-February 40,000 doses and just to add a little bit of context to your question, that was within the first seven weeks of a 13-week quarter. We then saw an additional 37,000 doses distributed across the remaining six weeks. So that just shows you a little bit about the timing of those type of announcements and the seasonality within. What was the second part of your question? I didn't catch it.
spk21: Drawdown of inventory.
spk27: Was there some? Yeah. Oh, drawdown of inventory. We did see certain wholesalers draw down inventory and that's again normal as part of the seasonality of the month.
spk33: Great, thank you.
spk09: Thank you. One moment for our next question. Our next question comes from...
spk33: Philip Nadeau with TD Cowan. Your line is now open.
spk05: Good morning, thanks for taking our questions. One from us and a follow-up. On the future trends, there seems to be a lot of focus among investors on what is the rate is gonna do to your growth in future quarters. I know you've expressed confidence that you'll continue to grow given the size of the market. I think people are debating whether current consensus is achievable. It looks like for Q2 and Q3, consensus calls for 11% to 12% growth quarter over quarter in both those quarters, which seems like a meaningful deceleration compared to what you showed here in Q1. So is that reasonable? Is that conservative? Is that aggressive based on your expectations in what you've seen thus far in Q2?
spk26: Thank you so much, Phil. Adam?
spk27: Yeah, thanks, Phil. So 20% growth, Q1 versus Q4, I think is a very positive thing. And we continue to seeing growth into Q2, strong growth. We don't comment on what that growth will look like for the full quarter. We're excited to be able to represent that at our next earnings call.
spk05: That's fair enough. And then just wanna follow up on the EU. Should you get a negative CHMP opinion in July? Do you still now have the appeals process available to you? Could you go down the same road that you thought you were gonna go down back in January once this review is over?
spk25: Thank you, Phil. Yes, we can. So as I mentioned before, the process will be longer, but we believe that the other approvals stay the same.
spk04: Perfect, thanks for taking our questions.
spk33: Thank you. Thank you. One moment for our next question. And our next question comes from Akash Tawari with Jefferies, your line is now open.
spk38: Hello, good morning. This is Ivy on for Akash. We have a couple of quick ones on Sephora. So first is on safety. What's your current hypothesis on the causes behind the cases? Have you done any testing on PAK antibodies? And then on the competitive landscape, if there's no more retinal vasculitis cases for either way over the next two quarters, how would your internal market share projections shift? And finally is for your branded DTC campaign. What's the ROI you're targeting at and also like what's the spend associated with this campaign for this year?
spk25: Thank you so much. I'm wonderful to hear you. So first of all, on the hypothesis, again, as we've discussed before, it is pretty remarkable that there is this first injection phenomenon, right? From an immunological perspective. Our leading hypothesis, as you correctly mentioned, is indeed around polyethylene glycol. That is work that we will continue to do to further explore. Now for our competitor, we will see where things land. I think what is really important for us is that the rates of vasculitis is extremely low and stays extremely low is a first injection phenomenon. And the efficacy is something that of course, really stands out for CyphoVe versus our competitor, which at the end of the day, we think will be the most important. All of this stands in the background, of course, of this enormous market that geographic atrophy represents because of the enormous amount of patients that are unfortunately affected by this
spk27: disease.
spk25: So as it relates to the DTC campaign, let me hand it over to Adam.
spk27: Yeah, Ivy, and I'll just add on to what Cedric said, right? Our market leadership is driven by our strong efficacy, well-documented safety, flexible dosing, and the unmatched data set that holds all of that up. So that's, I think, incredibly important for the rest of the year. And I think people choose GA drugs for their incredibly strong efficacy. As to DTC, so our DTC campaign is actually live now on TV. So our new campaigns are streaming. We're investing in this campaign because we think it has an incredibly strong positive return on investment. It will drive more patients into retina specialist offices and those patients will see our ad and ask for CyphoVe. And then the four pillars of what we think builds up a great GA drug come into play there where the physician will have that conversation with those patients and hopefully put those patients on. So as Cedric said, this is a large market and all of our DTC activities will push more CyphoVe patients into
spk10: the market. Thanks.
spk09: Thank you. One moment for our next question. Our next question comes from Ellie Merle. With UBS, your line
spk33: is now open.
spk03: Hey guys, thanks for taking the question. Just one quickly on expenses and profitability. Just given you expect expenses to be less in 24 versus 23 and with CyphoVe growing, how are you thinking about when you might reach profitability and what are the potential swing factors there? And then just a second one on your pricing strategy is what are your expectations for growth to net in the second quarter? And do you expect any uptake in growth to net or in your use of samplings in the second quarter and just walk us through how you're thinking about your pricing and contracting strategy? Thanks.
spk35: Thank you Ellie. Great to hear you, Tim.
spk28: Sure, thanks Ellie. So the good news is we're in a very strong financial position and we've previously said that our cash and our projected revenues are sufficient to fund our operations for the foreseeable future. From an expense perspective, on a quarterly basis, our Q4 2023 expenses were lower than our Q3 2023 expenses by about 7% and then taking into account the one time charge for cold and gluten disease this quarter, they would have been down a further five or so percent. So we have seen that decrease in operating expenses and we continue to believe that our expenses will be lower in 2024 than in 2023. On the top line, you can see that we're also growing nicely and that combination, we've said, will obviously allow us to fund our operations but
spk09: we don't actually guide on when we become profitable. Thank you, one moment for our next question.
spk33: And our next question comes from Annabel Samimi with Stiefel, your line is now open.
spk39: Hi all, thanks for taking my question. I want to ask about the referrals from ophthalmologists. Has that just started or are retinal specialists still working with their own patients? And with this DTC campaign, can the retinal specialist handle the volume of referrals that are gonna be coming in if the referrals have just started? And then on the competitive landscape, obviously, ISRA has been out for a little bit now, now they have a J-code, but I mean, instead of thinking about it as a competitive headwind, you actually think that having a competitor out there is creating more of a tailwind for the whole entire space. And maybe you can speak to that and what dynamics you're seeing there, thanks.
spk25: Thank you so much, Annabel. I'm gonna hand it over to Adam.
spk27: Yeah, thanks Annabel. So at the moment, referrals are quite low. And as you said, right, this is a very large market. So the vast majority of retinal physicians are treating patients that they already had a relationship with or were on their books, so to speak. And we believe the DTC campaign will start to push those patients that they don't have and those referrals from ophthalmologists and optometrists into get treatment. So that's the core aspect of our DTC. The feedback we hear from retinal physicians is that they have the capability of accepting many, many more patients. And I don't think it's remotely a problem for them to treat those new additional patients. And that's been consistent feedback we've got as we progress through the launch. Now, competition is healthy, and competition does grow an incredibly large market. And I think the team that we have in the field is laser focused on executing, because we believe that we have the strongest product profile out there in this large and growing market. So I do think market growth driven by competition is a great tailwind for us. And I think we're primed and have the best drive to be able to capitalize upon.
spk10: Great, thanks.
spk09: Thank you. One moment for our next question. Our next question comes
spk33: from Francois Rispault with Oppenheimer, your line is now open.
spk14: Hi, thanks for the question. Just quickly too here, so in terms of the 2000 sites that you're now in, do you discuss some that are only eyes survey, some that are only CYF-OVERI, but do you discuss how many sites you ultimately like to get into? What's your market penetration in terms of sites that make sense? Thank you.
spk11: Thank you, Francois. Adam?
spk27: Thanks Francois. So yes, we're in over 2000 sites that have chosen to use CYF-OVERI. And as I said before, some of those sites are very CYF-OVERI dominant. We believe that there are over 3000 sites initially that we wanna target, so we still have an opportunity for growth when it comes to sites. And as I said, my very nerdy metric of more than double digit new accounts using CYF-OVERI for the first time every week since launch continues. So that shows you that we're making impact. It's a big market with a large prescriber base.
spk14: Thank you. And then just quickly, in terms of the readout here, mid-year Valiant readout, can you just help remind us what would you consider a successful readout here?
spk25: Thank you so much for that question as well. We are very excited about the Valiant readout. We believe that in C3G and ICMP Gen, there is a very high and unmet medical need that will be associated with an important new market for M-BAVETI. In the Valiant trial, we have enrolled 124 subjects. A very large trial across both ICMP Gen and C3G pre-transplant as well as post-transplant. And the primary endpoint is a logarithmic transformation in proteinuria reduction powered to show approximately 30%. But a significant reduction in proteinuria is what we are looking for and will be placed in the context with
spk09: some of the secondary endpoints as well. Thank you. Thank you. One moment for our next question.
spk33: Our next question comes from Adam Vogel with Wells Fargo. Your line is now
spk18: open. Great. Thank you for taking my call. I'm on for Derek today. Maybe just a little bit more on the Valiant readout. How granular will you report this data out across each indication and setting? And then within those, is there like one that's clearly the largest opportunity for you or are they fairly similar across indications and settings?
spk25: Thank you so much, Adam. So, this is, again, a very large market opportunity and something that we're really looking forward to reading out. I didn't exactly hear your question because it was breaking up a little bit. Could you repeat that, please?
spk18: Sorry, yes. So, just across indications, how granular are you going to be reporting out like each indication across pre and post kidney transplants and is there a market opportunity among these that is kind of like the largest opportunity for you guys or is it fairly similar across each indication and setting?
spk25: Yeah, thank you so much. So, C3G is the larger market or the larger opportunity in terms of patients compared to ICMPGN. But I think it's important here to point out as well that correctly differentiating between those two indications is also not straightforward. You have to look at histopath and make the determination there. I think for us, the purpose was to really go very broad. Again, not just between the two indications, but also in the pre and the post transplant setting and especially in the post transplant setting, we think we have a really unique opportunity to stand out
spk26: as
spk25: a best in class opportunity.
spk18: Gotcha, and then maybe just one follow up. On the SFJ loan repayment, is there any new color you can provide us on loan repayment strategies?
spk28: Thank
spk18: you,
spk28: Tim. Sure, thank you. So, look, one of the things we look at carefully is our cash management. So, ultimately, when you look at our SFJ payments, they amount to approximately 200 million over the next, call it 20 months. And that along with our increase in the receivables that we extend, so the credit we extend to the channel, that represents a fairly large cash use for us. So, obviously, we spend a good amount of time thinking about the best way to perform balance sheet management. And we have a number of options available to us and we have a number of tactical options, non dilutive options, there's several of those. So, we evaluate those all the time.
spk09: We'll update you if we plan to do anything there. Great, thank you. Thank you, one moment for our next question. Our next question comes from Joseph Stringer with Needham and Company.
spk33: Your line is now open.
spk30: Thanks for taking our question. Just to follow up on a prior question on the switching between Ciphobre and Isorvá, understand you haven't provided quantitative metrics on this, but maybe I'll ask a different way. Could you give us any color into
spk31: perhaps
spk30: the most common reasons
spk31: why patients would switch between the two drugs?
spk25: Thank you so much for the question. So, look, I think the switchers, quite frankly, is not something that I think is an easy conversation between physicians and patients. When you are on either of the two drugs and you wanna switch that patient over, you're gonna have to have a conversation around that. Again, we are mostly focused on the new patients and as they come on board and as we've mentioned, we have, of course, our differentiated efficacy profiles work from. And again, it's an enormous market and it's an enormous number of patients who are in dire need. Adam, Carolyn, do you wanna add something?
spk15: I think it's uncommon for physicians to be switching now. The majority of physicians are really
spk16: very happy with our transparency, with our messaging, and with our efficacy. And in the long term, and this is an elderly patient population, they want to have this true every other month dosing, which shows enormous efficacy for us into year three and beyond. And I think that really speaks to the doctors. And they sort of understand the safety messaging and which has also been associated with introvertial injections as a whole, understand that, are able to inform their patients and have moved on from that.
spk27: And Joey, just to add this, Adam, yeah. So I think the switching dynamic did occur during the late summer months of last year. We have also seen some patients anecdotally switch back to Cyphobri and as Caroline says, our assumption there is that this is a efficacy driven market and these are incredibly well educated patients and physicians. So we continue to see the strong majority of new starts start
spk09: on Cyphobri. And I think that's a very positive
spk31: indicator. Great, thank you so much for taking our question.
spk09: Thank you. Thank
spk33: you, one moment for our next question. Our next question comes from Douglas Selle with HC Wainwright, your line is now open.
spk13: Hi, good morning and thanks for taking questions and congrats on the progress.
spk00: Just,
spk13: you know, you've noted that this, the Vaseline seems to be a first injection phenomenon. I'm just curious, is there anything that you can do to lower the rate from the one in 4,000, which is already rare, but to minimize it even further. And I guess I'd just be curious if there are efforts, you know, both in the near term or perhaps longer term work that could be done, thank you.
spk25: Thank you so much, Doug. Look, we are looking into ways to potentially predict the at risk patients that are there. But again, kind of placing things into context here, right? I mean, the rate that we have here is similar to what you have with foreign infectious endothelmitis, which is a risk that happens at every single injection that is done, right? So most importantly, last year when we went into this, the question was, is this a problem that is just the beginning of much more? And it is not. So right now we are in a period of stabilization, positions understand the risk. We've been incredibly, I think, good and transparent at communicating it. And now the dialogue is shifting towards efficacy.
spk13: And I'm just curious as a follow up, to the extent that there are practices using both Cypherovir as well as Isorva, do you get a sense whether the physician is, you know, sort of how is ultimately decided which drug a patient will get? Is it being left up to the patient? Do you get the sense? Or is it sort of, are physicians choosing patients by any number of different reasons? Yeah, thank you. Caroline,
spk25: do you want to?
spk16: Well, I think some of these practices are so large, they, you know, there's a benefit to offering across all of the therapeutic options. For example, a patient might come in who was treated in a different state and wants to continue on while they're vacationing with their treatment and then they'll go back. So there's a whole host of reasons that speak to physician choices. But I think the main thing that physicians like is efficacy. And that is really where we're strong, efficacy and flexibility while being transparent with our safety dosing. So I can only say that in my practice, we offer every therapeutic option that's available, but the discussion is often based on the statistics with the patients and making that choice with them together.
spk13: Great, that's helpful, thank
spk33: you.
spk09: Thank you, one moment for our next question.
spk33: And
spk09: our next question
spk33: comes
spk09: from
spk33: Greg Suvanovic with Mizuho Securities, your line is now open.
spk20: Great, thanks so much for taking my questions and congrats on a nice psych-phobia number. I was wondering if you could either qualify or quantify what you're expecting the recent implementation of the CMSJ code for Isovade to have, or has it already had, if there has been any. And maybe a second question as a follow-up. I believe a question was asked earlier about expectations around growth to net, what we could expect them for, perhaps the second quarter and how that might evolve throughout the year, thanks.
spk25: Thank you, Greg. Adam on CMS and then Tim on.
spk27: Yeah, so I think J-code unlocks prescribers. And so, just like it was for us, I think the J-code will unlock some prescribers for Isovade. But just as a reminder, right, being the number one chosen GA therapy across new starts and continuing patients, I think that we win when those conversations take place based on the strong efficacy and the well-documented safety. So, J-code has an impact just like it did for us,
spk43: but we're
spk27: laser focused on executing our plan in this massive market. And I'm gonna hand to Tim on growth to net.
spk28: Thank you for the question, Greg. Yeah, so for growth to net, it has been relatively stable. And really, we don't comment generally, other than to say we've had a pretty wide range of 10 to 20% that we've said. I think it's a wide range, but you can get somewhere in the middle and
spk09: understand where our growth to net has been consistent. Thank you. I'm showing no further questions
spk33: at this time. I would now like to turn it back to Cedric Francois for closing remarks.
spk25: Thank you so much, everyone, for joining. If you have any follow-up questions, please feel free to reach out to Meredith, and we look forward to hearing and speaking with many of you today and the next week. Thank you.
spk33: This concludes today's conference call.
spk09: Thank you for participating. You may now leave the room for questions. I'll disconnect.
spk00: repeated . . . . . . . . . . . . . . . . . . .
spk33: . . . . . . . . . . . . . . .
spk17: .
spk25: . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . .
spk16: . . . . . . . . .
spk28: . . .
spk25: . .
spk09: .
spk32: .
spk27: . . .
spk32: .
spk25: .
spk41: .
spk25: .
spk27: . .
spk02: . .
spk09: . . . . . . . . . . . . . . . . . . . . . .
spk47: . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . . . . . . . . . . . . . . . . . . . .
spk33: .
spk29: . . . . . . . . . . . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . .
spk29: .
spk25: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk29: . . . . . . . .
spk22: . . . . . . . . . . . .
spk25: .
spk22: . . . . . . . . . . .
spk09: . . . . . . . . . . .
spk33: . . . . . . . . .
spk23: . . . . . . . . . . . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk21: .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk10: .
spk09: . . . . . . . . . . . . . . .
spk33: . . . . . .
spk05: . . . . . . . . . . . . . . . . . . . . . . . .
spk26: .
spk27: . . . . . . . . . . . . . . . . . . . . .
spk05: . . . . . . . . .
spk25: . . . .
spk33: . . . . . . . . . . . . .
spk38: . . . . . . . . . . . . . . . . . . . . . . . . .
spk25: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk10: .
spk09: . . . . . . . . . . .
spk33: .
spk03: . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk28: . . . . . . . . . . . . . . . . . . . . . . .
spk09: . . . . . . . . . . .
spk33: . . . .
spk39: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk25: .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . . . . . . . . . .
spk33: . . .
spk09: .
spk14: . . . . . . . . . . . . . . . . . . . .
spk11: . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk14: . . . . . . . . . . . . . .
spk25: . . . . . . . . . . . . . . . . . . . . . . . . . .
spk33: . . . . . . .
spk18: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk25: . . . . . . . . . . . . . . . . . . . . . .
spk18: . . . . . . . . . . . . . . . . . .
spk25: . . . . . . . . . . . . . .
spk18: . . . . . . . . . . . . . .
spk28: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . . . . . . . . . . . . .
spk33: . .
spk30: . . . . . . . . . . . . . . . . . . .
spk31: . . . . . . .
spk25: . . . . . . . . . . . . . . . . . .
spk15: . . . . . . . . . . . .
spk16: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . .
spk31: . . . . . . .
spk09: .
spk33: . . . . . . . . . . . . .
spk13: . . . .
spk00: .
spk13: . . . . . . . . . . . . . . . . . .
spk25: . . . . . . . . . . . . . . .
spk13: . . . . . . . . . . . . . . . . . . . . . .
spk16: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk09: . . . . . .
spk33: . . . . . . . .
spk20: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk25: . .
spk27: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
spk28: . . . . . . . . . . . . . . . . . . .
spk09: . . . . . .
spk33: . . . . . . . .
spk25: . . . . . . . . . . . . . . . . . . . . . . . . . .
spk33: . . . . . . . . . . . . . . . . . . . . .
Disclaimer