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spk01: to Cara Therapeutic's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker 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. To remove yourself from the queue, please press star 1 1 again. I would now like to hand the call over to Matt Murphy, Investor Relations. Please go ahead.
spk05: Thank you, operator, and good afternoon. After market closed today, CARA issued a news release announcing the company's financial and operating results for the second quarter of 2023. Copies of this news release and the associated SEC filing can be found in the investor section of our website at www.caratherapeutics.com. Before we begin, let me remind you that during the course of this conference call, we will be making certain forward-looking statements about CARA and our programs based on management's current plans and expectations. These statements are being made under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. Actual results may differ materially due to various factors, and CARA undertakes no obligation to update or revise these statements publicly as a result of new information or future results or developments. Investors should read the risk factors set forth in CARES 10-K for the year ended December 31st, 2022, and any subsequent reports filed with the SEC, including its Form 10-Q for the quarter ended June 30th, 2023. With that said, I'd like to turn the call over to Chris Posner, CARES Chief Executive Officer. Chris?
spk07: Thanks, Matt. Good afternoon, everyone, and thank you for joining our call. With me today are Ryan Maynard, our Chief Financial Officer, Dr. Joanna Consalves, our Chief Medical Officer, and Scott Derillian, our General Counsel and Head of Government Affairs. I'd like to start by giving a quick overview of what I'll address today. First, I will give an update on the Corsuva injection launch in the U.S., including clinic-level data to provide visibility into underlying demand trends across the different segments of the dialysis market. I will also briefly touch on the proposed calendar year 2024 ESRD PPS rule, which CMS published in late June. Next, I will review the Capruvia launch progress in countries around the world. Then, I will discuss our wholly-owned pipeline and the progress of our three late-stage programs for oral difelocephalin. Finally, Ryan will provide a financial update after which we will open up the call to Q&A. With that, let me discuss the Corsuba injection launch in the U.S. For the second quarter of 2023, net sales for Corsuba were $11.4 million, translating into $5.4 million of profit recorded as revenue to CARA. Wholesaler shipments to dialysis clinics totaled approximately 67,000 vials, a 46% increase from the prior quarter. 67% of these vials were shipped to FMC clinics with the remainder split between DaVita and the other DOs. This increase in vial shipments suggests a continued drawdown of inventory at FMC and an acceleration in demand across all DOs. Ongoing anecdotal feedback on Corsuva from both providers and patients remains highly positive, highlighting that Corsuva addresses a significant unmet need. At FMC, orders grew by more than 50% quarter to quarter, reaching 45,000 vials. By the end of the second quarter, over 700 FMC clinics, or 27%, had placed reorders. That's up from 18% at the end of the first quarter. More importantly, 1,300 clinics or 50% had dosed at least one patient. That's up from 42% at the end of the first quarter. Note, this is a correction. Based on numbers provided to us by FMC, we reported on our first quarter call that 1,500 clinics had dosed at least one patient. The growth in the number of FMC clinics reordering as well as clinics dosing a patient suggest continued drawdown of inventory at the clinic level. If this trend continues at the current rate, we believe that the majority of FMC clinics will have depleted their inventory and will be in reorder mode this year. At DaVita, we are seeing continued steady growth in demand. Orders grew by 43% quarter to quarter to 11,000 vials. Over 400 clinics, or 15%, had ordered Corsuva at the end of the second quarter. That's up 11% at the end of first quarter. Reorder rates remain very encouraging, with 73% of clinics placing repeat orders. Given the on-demand approach at DaVita Clinics for ordering Corsuva, the growth in clinic orders represents a good proxy for the growth in patient demand. At midsize and independent DOs, Corsuva utilization continues its momentum. Orders grew by 28% quarter to quarter to 11,000 vials. At the end of the second quarter, 17% of clinics in this market segment had placed orders. That's up from 13% at the end of the first quarter. In addition, 68% of these clinics placed repeat orders, and that's up 66% at the end of the first quarter. USRC remains the largest buyer of Corsuva in the MDO and IDO segment. 73% of USRC clinics had ordered Corsuva by the end of the second quarter, and 80% of these clinics had placed repeat orders. While Corsuva continues to make meaningful progress in the U.S., a majority of the market remains untapped, and there is significant room for growth. Our partner, CSLv4, is fully committed to driving Corsuva's uptake in this unique ecosystem with the goal of maximizing its commercial potential in the long term. Now, I will briefly touch on the ESRD PPS proposed rule for calendar year 2024. This rule, once it is final, will determine the framework for Corsuva's reimbursement after its Tdapa period. In late June, CMS proposed a new add-on payment adjustment for certain new renal dialysis drugs after their Tdapa period ends. The post-Tdapa payment adjustment applies to all dialysis treatments for a period of three years immediately following the expiration of the drug's Tdapa period. The proposed methodology calculates the add-on payment for each treatment based on the prevailing ASP and the drug's utilization during the most recent 12-month period. CMS also proposed a risk-sharing arrangement with ESRD facilities calculated at a 35% discount to the prevailing ASP to account for any declines in other drug expenditures. We are pleased that CMS proposed additional funding that is not budget neutral for innovative TdapA designated drugs that fall into an existing functional category. We are also glad that the new funding starts immediately after the expiration of the TdapA period and gets adjusted annually by the market basket update. However, there are certain limitations to the proposed methodology which we plan to pointedly address with CMS in the coming months. Specifically, the add-on payment applies to all dialysis treatments and does not follow the patient. In addition, a 35% discount to the prevailing ASP does not take into account first-in-class drugs like Corsuva that don't have a therapeutic substitute. Since the proposed post-ADAPA reimbursement methodology makes a drug's uptake during its TdapA period a key factor in future reimbursement rate setting, we plan to also address the question around appropriate utilization data with CMS near term. More specifically, we will be laying out a case for additional TdapA time. We will furthermore press for changes to the proposed methodology to account for innovative first-in-class products that target a minority of ESRD patients. We will continue to work closely with CMS and provide information to highlight the best solution for broad and equitable patient access to innovative drugs like Corsuva in the final rule, which is expected later this year. Next, on the international front, the rollout of Capruvia in Europe is progressing well. In the second quarter, Capruvia generated $1.2 million in net sales, translating into $123,000 of royalty revenue to us. Launches have begun in seven EU countries, with more lined up in the coming months. CSLv4 continues to report positive feedback from patients and providers, in line with the testimonials we have received in the U.S. We are pleased with the recommendation by England's National Institute for Health and Care Excellence, or NICE, for Ciprovia for the treatment of moderate to severe chronic kidney disease associated pruritus in adult patients on hemodialysis. In Japan, we continue to expect a regulatory decision in the second half of this year. As a reminder, approval in Japan would trigger a $2 million milestone payment to CARA. We are pleased with the progress around the world and believe the success of the XUS launch to date underscores the significant unmet need for an effective antipyretic treatment for hemodialysis patients. Last but not least, let me touch on the development progress of our innovative wholly-owned pipeline. Enrollment in our Phase III programs in pruritus-associated with atopic dermatitis and advanced chronic kidney disease is progressing well. We anticipate the internal readout of Part A of our KIND 1 AD trial in the fourth quarter of this year with final top line results from this program in the first half of 2025. We continue to expect top line results for our KICK program in advanced chronic kidney disease in 2024. Our Phase 2-3 COURAGE trial in Notalgia Parasetica commenced in the first quarter of 2023 and is tracking to the internal readout of Part A in the second half of 2024. We expect top-line results for the COURAGE program in the first half of 2026. We strongly believe that oral diphellocephalin is the centerpiece of our strategy of becoming the leader in the treatment of chronic pruritus and the key to unlocking the long-term value of CARA. And we remain committed to driving progress of our pipeline and building our unique nephrology and medical dermatology franchises with World Diphelic Heflin. To summarize, we are pleased with the continued progress of the U.S. Corsuva launch as evidenced by the acceleration in vial shipments and reorder rates across the dialysis landscape. Following CMS's proposal for a post-TDAPA add-on payment, we are engaging with CMS to discuss potential modifications to the proposed methodology, as well as an extension of Corsuva's TDAPA time. We hope to see meaningful changes reflected in the calendar year 2024 final rule later this year. Internationally, we continue to receive positive feedback from the rollout of Capruvia, and we are optimistic about the growth trajectory as more countries come online. We also continue to execute on the most significant long-term value driver of our company, our differentiated innovative pipeline. Our three late-stage programs with Oral Diabella Keflin have potential for tremendous value creation and set us apart as a leader in chronic pruritus. We remain laser-focused on advancing these programs in order to maximize the potential of difalocalfalin within our two exciting therapeutic franchises. I would now like to turn it over to Ryan for additional details on our second quarter financial results. Over to you, Ryan. Thank you, Chris.
spk08: Total revenue was $6.9 million for the three months ended June 30, 2023, compared to $23 million for the same period in 2022. Now revenue this quarter consisted of $5.4 million of collaborative revenue related to our profit from CSL v4's net sales of Corsuva injection, $1.4 million of commercial supply revenue, and $123,000 of royalty revenue representing our royalties from net sales of Capruvia. Now revenue in the same period last year included a $15 million milestone payment for the approval of Cupruvia by the European Commission, as well as 8 million of collaborative revenue related to our profit from CSLv4 sales of Corsuva. Cost of goods sold during the three months ended June 30th, 2023 was 1.4 million and relates to our commercial supply shipments of Corsuva injection to CSLv4. There was no cost of sales during the three months ended June 30th, 2022. as there was no commercial supply revenue from CSLV4. R&D expenses were $30.3 million for the three months ended June 30, 2023, compared to $19.9 in the same period of 2022. The increase in R&D expenses is primarily due to the increased clinical trial spend related to our three late-stage clinical programs, partially offset by decrease in stock-based comp. G&A expenses were relatively flat at $7.5 million for the three months ended June 30, 2023, compared to $7.6 in the same period of 2022. Cash, cash equivalents, and marketable securities at June 30, 2023, totaled $101.7 million, compared to $123.4 million at March 30, 2023. The decrease of $21.7 million this quarter was primarily due to cash used in operating activities. We expect that our current unrestricted cash, cash equivalents, and available for sale marketable securities are sufficient to fund our currently anticipated operating plan for at least the next 12 months. This guidance assumes all the spend related to our three late stage clinical development programs and Coursera revenue profit share contribution. We continue to work to extend our runway past the guidance by focusing on non-dilutive funding sources. Now, back to you, Chris.
spk07: Thanks, Ryan. I want to again emphasize our confidence in the commercial potential of Corsuva, Capruvia, and Europe, as well as the tremendous upside of our pipeline for oral diphelic hepline. We continue to believe that our long-term strategy will make care of the leader in the treatment of chronic pruritus and will deliver meaningful value to our shareholders. With that, Ryan, Joe, Scott, and I will be happy to take your questions. Operator, you could please open the line for Q&A.
spk01: As a reminder, to ask a question, you will need to press star 1-1 on your telephone. Again, that's star 1-1 on your telephone to ask a question. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Dennis Ding of Jefferies.
spk10: Hi, good afternoon. Thanks for taking our questions. Congratulations on all the progress in the second quarter. Two questions for me. Maybe, you know, how do you guys think about the trajectory in the second half in the shape of the launch curve? Outside of the, you know, outside of depleting inventory, what else needs to happen for the trajectory to really inflect in the back half of the year? And then my second question is around the CMS draft documents. Maybe remind us what you are looking for or pushing for in the final ruling in the fall and what would be considered a big win for CARA. Thank you.
spk07: Yeah. Thanks, Dennis. Nice hearing from you. So the first question, expectations for the remainder of the year. You know, while we and our commercial partner, CSLV4, are not providing forward-looking guidance at this time, you know, here's what I will say. You know, we're certainly very encouraged with the accelerating trends in our key metrics, namely vials being ordered by clinics that increase 46% versus the prior quarter. And, you know, in addition, I mentioned in my prepared remarks, we're also seeing more and more clinics dosing patients. Specifically at the two LDOs, we're at FMC, Dennis, We're at 1,300 clinics dosing. That's roughly a 50% penetration. And at the VITA, we're about 410 clinics now dosing. But importantly, that's up over 40% versus the prior quarter. And most importantly, IV Corsuba is really holding up in the clinic, and the feedback from both patients and providers has been highly positive. The reorder rates, meaning once a clinic starts dosing patients, there is significant buy-in to the product as over 70% of these clinics continue and consistently place additional orders. And I'll just conclude with this, Dennis. Although we're kind of early in third quarter, I can tell you that the growth we see coming out of the second quarter, we are seeing continue in the early part of the third quarter. And our commercial partner, CSLV4, continues to be highly motivated, and their promotional efforts continue in full force. That's what I'll say about the second half of this year and our expectations. On CMS, let me introduce Scott, who heads up our government relations in addition to being our general counsel, who has led the efforts with CMS over the last couple of years. So, Scott, maybe you could address what we're doing with CMS. Sure.
spk06: Thanks, Chris. Yeah, as Chris said in his remarks, with regard to the rule, we're pleased that there was new money added. That is great and that's a very meaningful movement forward. In our interactions with CMS, and it's not just us, the broader community is also taking up very similar issues with CMS. There's three things with regard to the proposed rule. that we're going to be looking for. One is having the money follow the patient. That's particularly important with a product like Corsuva, where it is going to be used in a minority of patients. We want to make sure that the funding and the reimbursement is tied to their clinical decision directly to make sure that patients get access to the product. The second thing we're going to be talking about is the 35% discount. Again, we do agree that some sort of set-off for savings for drugs that are not going to be used in the bundle as a result of a new drug ought to be offset in some way. That's good fiscal policy. It makes a lot of sense. However, with a drug like Corsuva, where there isn't any money in the bundle, there isn't any money being spent to treat these patients or manage the condition before Corsuva, we think it's important that the set-off is rational and it's tied to the actual savings. And with Corsuva, there's not gonna be anything there. The third thing we're gonna be looking for is for clarity after the third year, because again, a drug like Corsuva, there is no money in the bundle and what happens afterwards. So we're gonna be seeking clarity on that. The other thing that we're gonna be pushing CMS on and having a discussion about is making sure that there is a Tdapa period for Corsuva that allows the community to use the product in the same, in knowing what the reimbursement and funding mechanism after the Tdapa period ends. Right now, the product is being used in a context where there isn't any, the thought is there would be no money added. So we're gonna be trying to get the extra Tdapa period to try to make sure that there's good data that appropriately lines up to the patient access.
spk10: Got it, thank you so much.
spk01: Thank you. Our next question comes from the line of Annabel Samini of Stiefel.
spk04: Hi. Thanks for taking my question. So I had a few actually. Just while we're talking about CMS, I guess a couple of things. I guess first, can you maybe, so I guess we understand the parts that they've also got an extra year. of Tadapopamine, and I was just wondering if you can outline what similarities or differences you might have had with Parsabiv, given that's pretty much the only other drug that's gone through this, and how they got that additional year. And then if Corsuba stays within the bundle the way that they've described, with this structure, do you envision incentives for dialysis providers to not use the drug and just collect the payments, as they might have done for parsibiv. So I just wanted to understand the dynamic that we might see post-Tdapa. And then I might have another follow-up. Thanks.
spk07: All right, Annabel. I think, let me unpack. The first one is around extending our Tdapa period and the rational why and why that is the same or different than parsibiv. Let me give that to Scott, and I may... have a couple words after.
spk06: Yeah, sure. So with regard to parsitive, it's not a great analog in one sense because the parsitive, obviously, there was an oral generic that was used afterwards. But there is one similarity with regard to why it would make sense and be consistent. And with parsitive, CMS was looking to get accurate information to understand how much it might add to the bundle. And that's the same argument we're going to make, that at the end of the day, We don't believe that the utilization and the uptake is going to be accurate in an environment where there would be new money added at the end of the SIDAPA period. So we think the precedent there with that regard, which is get better data, is consistent with parsitive.
spk07: Yeah, and Annabelle, I think on your second question, hopefully I got it right, basically, if I understood the question right, the proposed methodology from CMS could suggest a reverse incentive meaning that some of the dialysis organizations would be incentivized just to pocket the additional money and not use Corsuva. I'll say a couple things. One is it's certainly they could do that. Our belief is that that will not happen. Dialysis organizations are very much used to working in decapitated environment, meaning they're going to lose some money on some patients and make some money on others. So we remain pretty confident that the appropriate patients will continue to have access to Corsuva. And, you know, listen, we all have the same North Star around patients being at the center. And our kind of what we could control here at CARA and what we're really focused on is making sure that there is adequate and accurate funding so patients are going to have access to this drug. That's what, you know, Scott alluded to in his earlier comments, and that's really our focus.
spk04: I guess also just to be clear that the payment also is recalculated every year, correct? So if utilization goes down, that's going to go down.
spk07: Well, technically, based on their proposal, that could happen, correct. But it would be calculated on an annual basis.
spk04: Okay. And then just to switch gears for a bit, would you say that the reorder rate for the VEDA their independent dialysis provider is 70% is that about where you would expect reorder rates to be in a normalized environment for, say, Fresenius when the stories wash out?
spk07: Yeah, it would. I mean, we've seen it pretty consistent, you know, in that 70%. I mean, DaVita is actually this month or this quarter was or second quarter, sorry, with 73%. It's interesting if you look at USRC, which is the largest of the MDOs, they're about an 80% reorder. But I think we feel pretty comfortable that you're going to be in the range in that 70% reorder rate. We've seen that pretty consistently really since the launch. And I've been really pleased, and Annabelle, we've talked before, I've been incredibly pleased with that reorder rate. We don't get patient-level data. We do look at reorder rates as a proxy for you know, call it a really good patient experience. And we see this consistent month-to-month reordering by clinics that have started dosing patients.
spk04: Okay, great. And if I could just squeeze in one more. I did notice that you expected Fresenius to be reordering by the end of the year. Is that a change from your expectation of seeing normalized inventories by mid-year?
spk07: No, I would say we've always expected, I mean, we're looking at the growth trends on the core-to-core basis, and we saw a 48% increase in the number of clinics now exhausting their initial stock from Q3 and reordering. That's roughly 720 clinics. If you see that growth continue, we would expect the majority of these clinics to have exhausted their inventory and reorder. And again, with the 70-plus percent reorder rate, that we would fully expect from percentage once they kind of normalize with that. I mean, it really forms a nice growth annuity as more and more patients, you know, kind of get this product. So we haven't come off of that. We're just kind of analyzing our growth rate and seeing, you know, if this continues, you know, we feel pretty good about the majority of these clinics in the second half of the year exhausting their stock.
spk04: Okay, great. Thank you.
spk07: You're welcome.
spk01: Thank you. Our next question comes from the line of Joseph Stringer of Needham and Company.
spk11: Hi, thanks for taking our question. Now that you're a couple of quarters into the launch, how are you thinking about potential monetization of the IV course of a revenue stream? And what are some of the puts and takes that go into that decision?
spk07: Hey, Joey, so if you are referring to the ex-U.S. royalty revenue, I think, you know, we haven't really been terribly specific about what we plan to do from a financing perspective on the non-dilutive front. I mean, maybe, Ryan, you want to say a couple words on that?
spk08: Yeah, Joe, was that your question? Was it related to non-ex-U.S., or were you talking about the U.S. revenue stream?
spk11: If you could comment on both, that would be helpful.
spk07: Let me take one off the table. In the U.S., that wasn't our focus. We're, from a U.S. perspective, and we get 46% of net sales, essentially, and we're really in the initial quarters of this launch, and we feel there's pretty significant upside. Now we'll have to see how CMS works itself out over the next couple months, but where our focus has been From a financing side, Ryan, maybe you could comment on the ex-US.
spk08: So I think we are in a good position where we do actually have an asset that is generating cash, and this is ex-US. We've discussed in Chris's prepared remarks how well Europe is doing and how both CSL and ourselves are very excited about the potential for Europe going forward. So we are looking at opportunities to potentially monetize that We also discussed the potential approval of Japan in the second half of the year. That's also another potential cash-generating asset. So we've got a lot of options, and we're hopeful that we can execute on those.
spk11: Okay, great.
spk01: Thanks for taking our question.
spk07: Thanks, Joey.
spk01: Thank you. Our next question. comes from the line of Sumant Karkarni of Canaccord Genuity.
spk03: Thanks for taking our questions. I have a few here. So at what point will you or your partner have a better handle on steady state utilization of Kursua IV so you get the best possible reimbursement rates posted up, or how long do you think it would take to get to that rate?
spk07: So Sumant, it's a tough question because really, We're working with one payer, essentially, right? CMS are the dominant payer in this ecosystem in dialysis. And understanding the funding is going to be really critical that will determine the future trajectory of this drug. And the final rule will be sometime later this year, we're in the 60-day comment period. I think Scott summed it up nice, Zuman. I mean, you know, we found the proposed rule. There's some positives there, right? I mean, they are adding additional funding, and that's certainly a positive. We're certainly moving the needle with CMS to provide access to innovation and properly fund it. But, you know, we do have some serious concerns around the reimbursement methodology that Scott very clearly outlined that would have an impact on funding and potentially could be a headwind for us So I would say, you know, Simone, it's a little too early to talk about the trajectory until we fully understand the CMS final rule and what that could mean from a funding standpoint long term. I mean, one thing that's really crystal clear to us is that there is a significant unmet need, and this drug is very effective, and it actually makes a big difference in patients' lives. So as I said before, you know, patients at the center of everything we do I know I can speak for my partner there at CSLV4 with regard to Corsuva. And our focus during this comment period is really on addressing some of these reimbursement concerns around the proposed rule that they outlined, but also, importantly, as Scott said, requesting an extension of the Tdapa period. Because we do know Tdapa has challenged some of the uptake with some physicians. You know, listen, I mean, their experience is with parsibiv. And they're a little nervous that if they start patients on Corsuva, they may have to stop them if funding is not available. So we're really focused on this over these next, I would say, 60 days till CMS publishes their final rule.
spk03: Got it. And then given the relative difficulty of figuring out an optimal utilization rate, what do you think an optimal number of years of extension of Tdapa would you be asking for, and when would you expect to get more clarity on that, given CMS is already running a process?
spk07: Sure. Let me give that to Scott to talk about our plan with the extension.
spk06: Yeah. Again, we think we have a strong argument that we should get a new Tdapa period, which is essentially two years. because we need to have an amount of time where they can get the full ability to manage the utilization and get the right patient access based on what the funding is going to be. With regard to when we would hear, we expect there's not a specific rule for how that would happen, but we would expect to hear and we would ask to hear in the November final rule what the plan was. Got it. Thanks.
spk07: Thanks, Samant.
spk01: Thank you. Please stand by for our next question. Our next question comes from the line of David Amselem of Piper Sandler.
spk09: Hey, thanks. So I apologize if I missed any color here, but as you think about the cash runway and the upcoming clinical milestones, can you talk about how you're thinking about oral DFK strategically in terms of whether this is something you'd look to monetize in some way or keep it and commercialize it. I'm just trying to get a better sense of how you're thinking about the asset just given the cash runway and resource constraints. Thanks.
spk08: Hi, David. This is Ryan. I'll start out and kind of give some color on our investment in oral diphylocathlin, and then I'll pass it over to Chris to talk more about the long-term strategy for it. So the good news is that we can fully fund diphylocathlin in these three late-stage programs, and that's critical, and that's what we actually are working on here at CARA. You know, obviously, CSL is running the launch for Corsuva, But where we are spending our money, our investment, is on these three programs. So in the guidance I gave you, those three programs, atopic dermatitis, chronic kidney disease, and natalgia peristaltic are fully funded. I'll pass it to Chris now to talk about how we think about it.
spk07: Yeah, David, I mean, we still remain very focused on developing these two franchises. You know, from a commercialization standpoint, You know, we've been very public in saying we would certainly look, and we would look for ex-U.S. partners. We do not have an intention right now of commercializing ex-U.S. And I would remind you, and I know you know this, that, you know, we own the rights to oral diphalocaphalin outright. So we would certainly look outside the U.S. for a partner. In the U.S., you know, our intention is to stand up a commercial organization that to maximize the potential of these products and do it alone.
spk09: Okay, that's helpful. If I may sneak in one more. This is unrelated on Europe. Just remind us what pricing for the drug is. Obviously, it varies market to market, but how should we think about pricing in Europe? in the big markets, at least, relative to the U.S.?
spk07: Yeah, I mean, so, David, you're right. I mean, it varies market to market. What I can tell you in Germany, for example, the price per vial, I believe, is around 48 euro per vial. So, you know, kind of a third of what we have in the U.S. It's probably a good way to think about it. I think, you know, where we're really encouraged in Europe is, you know, the patient population in the E.U., five predominantly, is not that dissimilar to the U.S. And we're seeing, you know, Ryan alluded to it earlier, we're seeing pretty good uptake, a very good uptake, actually, since we launched in Germany in the fourth quarter last year in terms of both growth and patient sales. So we're actually really encouraged what we're seeing. You know, reimbursement is very different. Again, you don't have a Tdapa sort of system or a cliff, so to speak, on Tdapa. So, you know, and CSL has got a very good commercial footprint executing really nicely.
spk09: Okay. That's helpful. Thank you.
spk07: Thanks, David.
spk01: Thank you. Again, to ask a question, please press star 11 on your telephone. Again, that's star 11 on your telephone to ask a question. Our next question comes from the line of Jason Gerberry. of Bank of America Securities.
spk02: Hey, this is Chi for Jason. Thanks for taking the questions. I guess, you know, regarding a comment about we expect to hear back from CMS on any update or change to the proposal in the final ruling sometime this fall slash winter. Can you remind us sort of like if you do get the, if you do or do not get the addition of the DAPA, can you help us understand, say, you know, if you do not get the addition of the DAPA, how do you think about consensus estimate doubling the sales in 2024 versus 2023? What I'm trying to get at is if the reimbursement mechanism is such that The CMS will look at the prior year utilizations, apply a 35% haircut to it. I'm just trying to understand, do dialysis centers just simply have to give up, you know, other treatments in order to make way for volume? I'm just trying to get a sense of sort of the, you know, the disconnect between what subconscious is forecasting versus the CMS proposal. And so to the extent that you can provide that color, that would be great. And then I'll follow up after that.
spk07: Sure, Chi. I won't comment on consensus necessarily, but I think your analysis on how this works within a capitated system is correct. If nothing's changed, the onus is on the dialysis facilities to fund the product and actually compensate for it by looking at other avenues within that bundled rate. What we expect, and what I say what we're doing is obviously working with CMS now in this comment period, and Scott mentioned earlier around voicing our concerns with the reimbursement methodology. We have some concerns around how they're going to calculate the additional funding, but let's be clear, there is going to be additional funding added to the bundle under the proposed rule. And when we kind of understand where CMS is going to land with that, as well as the extra Tdapa period that Scott mentioned, we'll have a better sense of the trajectory of this drug based on the ability of dialysis facilities to resource it. And that'll be critical, and that will determine kind of the future of this drug. And again, we're encouraged that I encourage, I would say we're confident that we have a strong case for additional to DAPA time that Scott mentioned. We're certainly not going to handicap that at this point. I mean, we are working closely with CMS, or at least providing comments to them, and we'll engage with them during this period of time.
spk02: So, help me as I stand here. So, you have a 60-day comment period, and then you have this proposed so coming out sometime in October, November. Is that sort of like a two-way dialogue between you and CMS, or is it sort of more like you submit a comment and you won't hear back anything until October, November timeframe? Just help us think about sort of the level of visibility you have between now and when the final proposal comes out.
spk06: Sure, let me give it to Scott. Yeah, so we'll be providing, as you said, we'll be providing comments during the 60-day period, we will engage with CMS to provide more information. We would not expect to get anything back from them before the rule. They're in a comment period. They have rules they have to follow. We wouldn't expect there'd be any information back directly to us or certainly publicly before that November rule came out.
spk02: Okay, maybe just one last one from me. Can you talk about, remind us sort of the the connection between the manufacturing supply revenue on Kursuva and the revenue recognition of IV Kursuva. It looks like the manufacturing supply revenue looks a little light this quarter, but there's a sequential increase in the revenue. So is it just the nature of lumpiness, or is it any way a leading indicator of how much you know, IV core super, V4 will order from CARA.
spk08: Gee, this is Ryan. Thanks for your question. I would start by saying they're really disconnected in the short term. The commercial supply revenue is basically us shipping vials to V4 based on the release from quality because we're basically manufacturing, we're acting as the manufacturing CRO for V4 And as we get vials released from quality, we ship them immediately to V4 under a PO. So there's no connection to short-term demand. And as you know, the IV Corsuba revenue is based on shipments from V4 to the wholesalers, and that's how we recognize revenue. So you're correct in the sense that this shipment of commercial supply revenue was down from the prior quarter, but that was simply based on the QA releases we get from our provider.
spk02: Okay, great.
spk01: Thanks for answering the question.
spk08: Thanks, Chi. No problem.
spk01: Thank you. I would now like to turn the conference back to Christopher Posner for closing remarks. Sir?
spk07: Thank you, Lateef. Well, thanks, everyone, for joining us today, and I just wish everybody a great afternoon. With that, I'll end the call.
spk01: This concludes today's conference call. Thank you for participating. You may now.
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