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spk03: Hello and welcome to Epizyme's conference call. At this time, all participants are in a listen-only mode. There will be a question and answer session after the prepared remarks. Please be advised that this call is being recorded at Epizyme's request. I would now like to turn the call over to Bill Slattery, Jr. You may begin.
spk07: Thank you, Operator. This morning, Epizyme issued a press release providing a business update in addition to fourth quarter and full year 2020 financial results. That press release, as well as slides to accompany today's call, can be found in the investor section of the company's website at epizyme.com. On the call with me today is Rob Bazemore, President and Chief Executive Officer, Paolo Tambesi, Chief Financial Officer, and Vicky Bacchiner, Chief Commercial Officer. Matt Ross, Executive Vice President and Chief Strategy and Business Officer, and Dr. Shefali Agarwal, Chief Medical Officer, will be joining us for the Q&A session. As a reminder, today's discussion will include forward-looking statements related to Epizyme's current plans and expectations, which are subject to certain risks and uncertainties. Actual results may differ materially, due to various important factors, including those described in the risk factors section of our most recent forms 10-Q, 10-K, and other SEC filings. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to publicly update these statements. At this time, I would like to turn the call over to Rob Bazemore. Rob?
spk10: Thank you, Bill, and thank you all for joining us today. 2020 was a pivotal year for Epizyme and encompassed remarkable progress toward our mission of rewriting treatment for cancer through novel epigenetic medicines. I'd like for history to reflect that achieving two back-to-back FDA approvals within five months, enrolling our clinical trials, and launching TASVERIC, all while working entirely remotely through a pandemic the likes of which none of us on this call has ever had to experience, reflects a level of execution that signals to people living with cancer, to the physicians treating them, and to our shareholders that our mission at Epizyme is something we take very seriously. For that, I'd like to thank our incredible employees here at Epizyme. Our sales, clinical, and research teams all quickly adapted to our new environments. and it's because of their efforts that we were able to execute across all of our 2020 initiatives. Despite the many challenges the global pandemic brought to physicians, people living with cancer, and our ability to access them, we successfully transitioned Epizyme into a fully integrated commercial enterprise as we launched our first product, Tasveric, following our accelerated approvals of epithelioid sarcoma, a solid tumor cancer, and follicular lymphoma, a common heme malignancy. From a clinical perspective, we advanced the development of Tazometastat to support label expansion in FL and in additional solid tumor indications. In fact, all of our 2020 clinical initiatives were achieved on time or ahead of schedule. We also continue to progress our early stage pipeline, which you can expect to hear more about this year. In addition, we raised sufficient cash to fund important growth initiatives and extend our operating runway into 2023 based on our current operating plan. Our two approvals last year made TASVERIC the first and only treatment specifically indicated for ES patients and the first and only FDA-approved EZH2 inhibitor on the market. The clinical utility of TASVERIC was quickly acknowledged by the oncology community and payers alike. Within three weeks of both approvals, TASVERIC was incorporated into the NCCN clinical practice guidelines in ES and FL. Today, TASVERIC is covered in over 90% of insured lives in the U.S. for use in both ES and the FL indications. Earlier this month, the NCCN guidelines for relapsed refractory FL patients were amended to recommend TASVERIC for patients whose EZH2 status is unknown. This revised recommendation reinforces that there is no requirement to test for EZH2 status before prescribing Tasveric, which is in line with our current label and supports that our education efforts are reaching the KOL community. In the face of the COVID pandemic, the launch of Tasveric has been anything but conventional. Our commercial team has continued to adapt to the virtual environment, ensuring that Tasveric reaches all eligible patients as quickly as possible. by finding new ways to engage with academic and community physicians. As expected, we saw the greatest initial adoption of TASVIRIC in large academic centers, but we're now seeing broader adoption among the many community practices as physician awareness and understanding of our labels improves. While the resurgence of COVID-19 cases in the fourth quarter extended the challenges that we described last year, adoption of TASVIRIC in ES and SL continues to expand. TASVERIC net revenues for the fourth quarter were $4.5 million, a 31% increase over Q3, driven primarily by increased adoption in FL. Beyond revenue, we continue to see positive signs of our commercial execution and novel approaches to overcoming these challenges and ensuring patients have access to this drug. During the fourth quarter, monthly new prescriptions for TASVERIC continued to grow, and we observed a 50% increase in new prescribing accounts. our largest quarter-over-quarter increase to date. Overall, I'm encouraged by how we've executed given the circumstances, and I remain enthusiastic about the long-term potential for TASVERIC in ES and FL. I am pleased to be joined today by Vicki Vecaner, Epizyme's Chief Commercial Officer, who will elaborate on our commercial success momentarily. As I noted earlier, we've also made progress throughout 2020 advancing our clinical programs, to further develop Tazometastat, completing all trial milestones on time or ahead of schedule. We completed enrollment in the safety run-ins of our ES confirmatory trial, evaluating Tazometastat plus Toxorubicin in frontline patients, and for our SL confirmatory trial, evaluating R-squared plus Tazometastat in second-line and later patients. We are now moving forward to initiate efficacy expansion portions of both of these studies. Our post-marketing commitments for ES and FL also remain on track. We also completed enrollment in the safety run-in portion of our metastatic castration-resistant prostate cancer study, evaluating tazometastat in combination with enzalutamide or abiraterone. We plan to report safety and early activity data from all three safety run-ins this year. Scientific interest in this novel mechanism has also grown. and in 2020, enrollment was initiated in several investigator-sponsored trials and collaboration studies of Tazometastat, with many others being approved or currently under review. Studies such as the trial of Tazometastat in frontline diffuse large B-cell lymphoma and FL, which we are working on in collaboration with the Lymphoma Study Association, continue to enroll patients as expected. As we look forward into 2021 and beyond, we believe that there are four pillars necessary to driving enhanced and sustainable long-term growth for Epizyme. The first, maximizing our commercial effectiveness to ensure adoption of Tazveric in as many appropriate FL and ES patients as possible. As importantly, building Tazometastat's pipeline in the drug potential to benefit people living with cancers well beyond ES and FL. We will also expand our pipeline bringing novel oncology therapeutics into clinical development and transforming Epizyme into a true oncology portfolio company. And finally, working collaboratively and leveraging all available options to expand patient reach and increase shareholder value resourcefully and responsibly. While today's call will focus on our fourth quarter results and the first of these four pillars, We are excited to announce that we will be hosting a call to unveil the next episode for Epizyme next Tuesday, March 2nd, at 10 o'clock a.m. Eastern Time. During this call, we will speak further to our next five-year strategy, provide updates related to our TASBERIC development plans, and provide further detail regarding the advancement of our epigenetic pipeline. Because of this, we will be deferring much of the discussion relating to ongoing and planned clinical trials along with pipeline expansion plans to next week. The vision call will provide insights into how we are thinking about our pipeline, milestones, potential new data, and focus areas over the next five years. You should expect to see more information about this call in the next 24 hours, and we look forward to your participation. And with that, I'd like to turn the call over to Vicki, who will provide additional color on our ongoing launch efforts, followed by Paolo, who will briefly review our fourth quarter and year-end financials before we open the call for Q&A. Vicki?
spk01: Thanks, Rob. And good morning, everyone. TASVIR continues to gain traction, and we are seeing encouraging prescription and awareness trends in epithelial sarcoma, and we are pleased with the uptake we are seeing in follicular lymphoma given the challenges we faced with COVID. This morning, we will go into greater detail on our progress in both indications. After a long career in big pharma, I decided to join the team here at Epizyme, and I came here specifically because of the focus on the science of epigenetics as an interesting and promising way of addressing cancer. But more importantly, I came because I recognized that this specific medicine, casometastat, had the potential to help people with cancer in both solid and hematologic tumors. And now, as Epizyme's chief commercial officer, it's a privilege to lead our efforts to bring TASVARIC to patients. We launched TASVARIC as the first and only treatment specifically indicated for people who have epithelial sarcoma, or EF, after receiving accelerated approval from the FDA in January 2020. EF is an extremely rare disease affecting people primarily in their 30s and 40s. We estimate that there are approximately 800 people in the U.S. who have been diagnosed and are living with ES, of which 300 or so have metastatic disease and are eligible for TASVARIC. We observed strong adoption in ES during the first half of 2020, driven by the significant medical need in this rapidly progressing cancer, along with the fact that we started introducing TASVARIC traditionally roughly two months before we experienced the full effects of the COVID-19 pandemic. This provided us with the opportunity to initiate an in-person dialogue with our priority accounts before the environment shifted to the virtual world we have all become quite familiar with. As we transitioned to the second half of the year, growth in EF began to plateau. While we continued to see new patients starting therapy in the third and fourth quarters, some of the early patients treated in later lines of therapy began to cycle off treatment. Patients with multiple relapsed refractory disease have shown an average duration of therapy with Tasveric between four and five months, consistent with our phase two clinical data for second line and later patients. While we are seeing utilization of Tasveric across all lines of therapy in EF, the majority of initial usage has been in second and third line or later patients due to the significant need for new treatment in this setting. As physicians become more familiar with Tasveric in our reporting positive initial experiences, we expect that utilization will expand to earlier lines of therapy. Thanks to the ongoing education efforts of our team, awareness of Tasveric among physicians who treat EF has grown to over 80% as of Q4. This is exactly where we want to be in the months following approval. To wrap up EF, I want to emphasize that this year, we are continuing to focus on bringing this medicine to patients in the first-line setting where our clinical data showed more favorable efficacy, providing the most benefit for these patients with limited treatment options. As use of Tesveric in earlier lines of treatment expands, we expect duration of therapy will increase as well. Now let's turn to our follicular lymphoma or FL progress since approval. Last June, we obtained a second FDA accelerated approval for Tevveric to treat adult patients with relapsed refractory FL. Unlike our launch in EF, the FL launch was completely virtual from the start. Launching any oncology medicine during this pandemic has required overcoming a number of obstacles. For our team, there have been two distinct challenges. First, Patients are visiting their doctors with less frequency, which is accentuated in FL compared with other cancers due to the indolent nature of the disease and the general age of the patient population. While patient visits remain down compared to pre-COVID levels, during the first quarter, physicians and practices reported that they have recently started to encourage in-person visits again. However, we continue to see a 20% to 30% reduction and new FL patient treatment starts on any therapy in the fourth quarter compared to pre-COVID levels, which is understandable, as most physicians are reluctant to change therapies without seeing their patients in person. This obviously has had an impact on our ability to gain new patient starts for TASBERIC following our approval, but we believe this will eventually improve with broader vaccination and given that many of these patients have been without a treatment change for some time now. The second major hurdle has been our field team's limited face-to-face access with treating physicians and their staff. To date, our launch in FL has been almost entirely virtual. While our teams have been able to reach all of their top-tier accounts, frequency of access to physicians is challenging, and our ability to reach other account stakeholders has been less efficient in the virtual setting. So here's the thing. It has taken more time to get traction with physicians than might otherwise be the case in person. And compounding this, while our approved label allows for very broad use of TASVARIC in patients with relapsed refractory FL, it can require some explanation given the two unique indication statements. To address these challenges, we have initiated a number of educational programs and non-personal promotion programs to support the team's efforts with physicians. We've adapted with novel tools for field interaction and focused on innovative peer-to-peer programming in multiple formats, such as virtual speaker events, local workshops, and medical education programs. We've partnered with patient advocacy groups to support programs focusing on disease awareness that empower patients to be an active participant in their care. We have also increased our digital presence by investing in a diverse mix of media, traditional, online, and social, that are all focused on reaching healthcare professionals and patients. As a result of our efforts, casveric use is coming from all lines of relapsed refractory therapy. The largest growth and share has been in the third line and later patients, where we exited December with the highest share of new patient starts of any individual treatment. But we also see growth in the second line setting, especially in patients with EZH2 mutations. We recorded our highest number of new prescribing accounts in the fourth quarter, which grew over 50% from the third quarter. In the context of the pandemic, we are pleased with this sequential growth. While revenue grew 31% in the same period, Tasveric total bottle demand, including free goods, grew 42%. Free goods were from our patient support program, Epizyme Now. which provides TASVIRIC free of charge to eligible patients without the means to pay for therapy. We are committed to helping patients in need, and in December, it is common to see some increase in free goods, which was accentuated by the economic conditions created by the pandemic. Even with this December increase, the overall percentage of free goods is in line with our annual patient assistance program utilization assumption for 2020. Overall, we are pleased with the team's performance given the ongoing challenges presented by the COVID-19 pandemic. The ability to reach healthcare providers has been severely impacted for all companies, but our new field team of seasoned professionals has achieved the highest share of voice in person and virtually relative to others working in FL. Tasveric awareness has increased more than 60% since approval, and physician intent to prescribe remains high. irrespective of a patient's EZH2 mutation status. Our teams continue to adjust their approach to reach prescribers and have shown remarkable tenacity and creativity. Tesveric prescriptions for FL are now being written for patients with EZH2-activating mutations, wild-type EZH2, as well as in untested patients. Utilization is continuing to grow in academic accounts, and more importantly, we're seeing large community prescribers expanding their adoption of TASVARIC. With the recent amendment of NCCN guidelines for relapsed refractory FL patients earlier this month that recommends TASVARIC for patients with no satisfactory treatment options and whose EZH2 status is unknown, we expect we will continue to see increased TASVARIC utilization and usage by physicians as they reengage with their patients. What's more, Payer coverage has continued to be very positive and reflective of our clinical data generated for TASVARIC, supporting broad use by physicians. Over 90% of insured lives in the U.S. are currently covered for TASVARIC in both ES and SL indications, and the majority of prior authorization requirements are aligned to the patient population in our label. While we expect some challenges to persist in 2021 due to the pandemic, We are focusing on what we can control, growing new accounts and prescribers, educating academic and community physicians about TASVERIC's attractive safety and tolerability profile, continuing to identify appropriate patients who can benefit from TASVERIC, and ensuring a positive physician experience. Now I'll pass the call over to Paolo to talk about our financial results. I look forward to addressing your questions during Q&A. Paolo?
spk14: Thank you, Vicky, and good morning, everyone. We closed the year in a very strong position financially with $373.6 million in cash, cash equivalents, and marketable securities. Our total non-GAAP overrating expenses for 2020 were $209.6 million, below our guidance, as we managed to spend carefully and continued to see a reduction in travel and other expenses due to the majority of employees working virtually. Non-GAAP R&D and SG&A operating expenses for 2020 were approximately $101.3 million and $106.2 million, respectively. Turning to revenue, we recorded full-year 2020 revenue of $15.8 million. which includes $11.5 million of TASVERIC ES and FL net sales and $4.3 million of collaboration revenue. For the fourth quarter, we recorded a revenue of $8.4 million, which included $4.5 million in TASVERIC net sales revenue and $3.9 million of deferred collaboration revenue, which was recognized following the termination of the collaboration agreement with Celgene. Our cash position was strengthened in the fourth quarter through a $150 million expansion of our loan facility with Pharmacon Advisors, which was executed in November. This additional tranche further strengthened our balance sheets and will fund a number of critical growth initiatives for EpiDesign, including continuing TASVERI commercial execution, ongoing and planned TASVERI development in new indications and combination regiments, and advancing our research effort and early pipeline. As a reminder, we retain the option to expand the loan facility by an additional $150 million following mutual agreement with Pharmacon. We expect non-GAAP adjusted operating expenses to be in the range of $235 to $255 million for 2021. to support additional clinical development and continued investment in our commercial launches, including investment in manufacturing capabilities to ensure uninterrupted supply of Telsveric for commercial patients and our clinical trials. Finally, we are well financed today with cash and cash equivalents to support our current operating plans into 2023. We are not providing for the moment any revenue guidance given that our launches are in the early stages and uncertainty related to the evolving COVID-19 pandemic. I'd like to turn the call back over to Rob for closing comments. Rob?
spk10: Thank you, Vicky and Paolo. While not without its challenges, 2020 was a remarkable year for Epizyme, where we executed exceptionally well, all things considered. We are encouraged by our progress in the ES and FL launches, and remain confident in the long-term potential of Tasveric to change the lives of patients living with cancer. As a reminder, we hope that you will all join us next Tuesday, March 2nd, for our call to discuss the next episode for Epizyme, where we will be elaborating further on our next five-year vision for Epizyme. And we'll now open the call to your questions. Operator?
spk04: Thank you. To ask a question, you will need to press star then one on your telephone. To withdraw your question, please press the pound key. Our first question comes from the line of Michael Yee with Jefferies. Your line is now open.
spk05: Hey, guys. Good morning. Thanks for the update, Rob. Two quick questions. Yeah. One is appreciate the color on the launch. When I think about a launch, usually it's – decision prescribing, patient demand or reimbursement are really the keys. Do you think out of all the information you just gave us that one of those is most important that you think that you need to better block and tackle around to get things to pick up a bit? Maybe just talk about that. And then the second question is a finance question. You gave some nice OpEx guidance. You have current cash. I think I can do some math around where you might be at the end of the year. Can you just remind me on that $150 million credit line, how does that work? Is it just really available? There's no real financial criteria you have to hit to be able to do that. Can you just maybe remind us about that credit line? Thank you so much.
spk10: Yeah, Mike, certainly. Let me start with the first question. So with regards to how we're performing in the market right now, what's driving demand and what we see as the big thing that's needed to unlock this. First of all, Yes, it is. Patient access continues to be terrific. We announced in the opening remarks that we have over 90% of lives covered for both FL and ES. Those payer policies cover according to the label, so it allows for use as early as the second line according to the label without requirement for testing, all of the things that our label says. We were encouraged that earlier this month the NCCN guidelines were updated to reflect that, that there is no requirement for testing even in the second line settings. So patients who choose to use TASVERIC in either wild-type mutant patients or those who are unknown can do that without testing, and Bayer policies cover that. Second, I think with regards to the uptake and the adoption we're seeing, we're actually very pleased with that. You know, we said on the call that in the third line and later setting, which is where the predominance of our data is, we actually exited the year at a higher share of new prescriptions than than any other product in the category in that line of patients. And we're also seeing growth in the second line setting as well, predominantly in patients who have EZH2 mutations. So we feel like that's a really great place to be six months into a launch where we've had a difficult time communicating with physicians. And I think, so there comes the challenges. If patients aren't coming in to see their physicians, we're still seeing that patient visits are down. In the fourth quarter, it was not substantially different than the third quarter. And so, in the third line setting, if, you know, patient new prescription starts for any product and we need that new patient start in order to get a prescription for Tazveric, in the third line setting, that remained down about 40% in the fourth quarter compared to pre-COVID levels. Overall, if you look at the relapsed refractory population, it's 20 to 30% in the second line and later. So, we have to have the opportunity for a new prescription to be written for Tazveric to be written. And so a lot of that will correct itself, as we've said before. This isn't forever. We believe that this year with the wider use of the vaccines, many of these patients have been away from their physicians for quite some time. Physicians are calling now and trying to get these patients back in so they can see them and initiate a new therapy if they need it, if they're having a bad experience, if their disease is progressing. And that really is the key to unlocking the growth of TASVERIC in the way that we envision. But it's really more about that than execution. We're quite pleased with where we are, you know, five or six months into the launch. Your second question had to do with financing. So we are, you know, we're in a strong position going into the year. As we said, our cash position remains into 2023. We're in a solid financial position. The extra $150 million that you asked about the loan facility is This is purely an option. There is no specific criteria that has to be triggered for that. It's upon mutual consent between us and Pharmacon should we decide to use it. But there are not specific criteria that have to be satisfied in order to use the second tranche of that.
spk05: Okay, great. Thank you and appreciate it.
spk10: Thanks, Mike.
spk04: Thank you. Our next question comes from the line. Your line is now open.
spk11: Great. Thanks for taking my question. So, Robert, I got maybe a couple things. The first one is sort of following Mike's question. Can you give us a little bit of a sense, in third line, do you have any sense how many patients are sort of failing COVID? extend the care, you know, annually so we can kind of put in context. I mean, volume is obviously down because of COVID. So we get a sense kind of where you are and who starts relative to the overall opportunity. You know, on the one hand, you know, your team is, to your point, your team is actually doing pretty well. Getting the message out there in this environment and the statistics you're putting up are encouraging and impressive. And then secondly, just on SG&A, the $125 million, Give us a little bit of a sense, kind of maybe, if you can, how are you, how much wiggle room do you have with that? And, you know, how are you spending that money right now overall, maybe based on a few buckets? Thank you.
spk10: Yeah, Jeroen, let me start, and then maybe I'll ask Vicky as well to add a bit of color on the patients that we're getting. So, The market size, you know, we've always said this market size is around 12,000 laps refractory patients, of which 5,000 or so plus of those are in the third line and later setting. We don't expect that there are any differences there. It's a matter of how often those patients are coming in. As we said, we closed the end of the year with new prescription share, getting a higher share of those patients than any other single agent in the space. We're getting more of the mutant patients than wild type, and you would expect that just based on our data. I think we've always – expected that our share would be higher in the mutant patients and in the wild type. And in fact, that's what we're seeing. But we're also seeing, as I said, use in the second line patient population as well, predominantly in the EZH2 mutant patients where our data was the strongest. And so that's, you know, generally speaking, where the patient volume is coming from. And I'll ask Vicki to add a bit more color in terms of what we're seeing so far.
spk01: Yeah, no, that's great. Nice to meet you remotely here. Just to add to Rob's comments, I know in the third quarter we shared our estimated new patient share at the time was about 8%, and we're estimating for the fourth quarter that we were between 15% and 20% of new patient share, which, as Rob said, was the fastest growing new drug, or not new drug, or therapy. in terms of the utilization. So we're very pleased with that, that we're continuing to see that growth.
spk10: The 15% to 20% is the average over the quarter. Right.
spk01: So we're pleased with that. The other thing I want to mention is where these patients are coming from because I think As you know, early on, we were seeing more academically-based, the institutions were prescribing more. And another really positive signal that we've seen in the fourth quarter is the community practices are starting to come online and utilizing PESBARIC to the point now that our split of academic to community-based prescriptions is about a 60-40 split. which is 60% academic and 40% community, and that's continuing to increase. So just the fact that we're finally seeing that share of voice as high as it is and the intent to prescribe and we're getting to the community, that's really important for our continued growth. So we feel very pleased with that.
spk10: And then on the expense question, I'll start and then maybe ask Paolo to talk specifically to the SG&A component, but just a reference point for the expenses. We had already managed our expenses pretty tightly in 2020 to reflect the uncertainties about the pandemic. Also, the remote working environment, that eliminated a lot of our travel-related, field-related expenses. So, we had managed 2020 down pretty tightly because of that. We expect some of that to return in 2021. And also, in 2020, the FL launch, we had a six-month basically investment in the launch of follicular lymphoma with the June BDUFA date. This year we'll have a full year of launch. That being said, we've held flat most of our fixed costs. We've held flat. In fact, we've actually reduced GNA in 2021 compared to 2020. And now 2021 accounts for a full year launch expense for follicular lymphoma. So the areas that we will grow in 2021 largely is in the area of clinical trials, new investments in our clinical studies, as our safety run-ins transition into the full phase three efficacy expansions, and then also manufacturing to support our commercial need and to support our clinical trial demand. Paolo, I don't know if you'd like to add a bit more color on the G&A portion of Jerome's question.
spk14: Yeah, sure, even though you already answered most of the questions. So basically, as Rob said, we already managed quite tightly in 2020. So if you look at the exit rate, we just this morning announced the Q4. And so really there is not a significant increase on 2021. The only difference is the one full year. of launch activities. We reduced last year, but we still invest in the launch because we still believe in the full potential of the product. Our sales force is now the full 12 months. Last year started in March. But for the rest, G&A has been actually reduced compared to last year.
spk11: All right. Thanks so much. I appreciate it. Thanks, Jerome.
spk04: Thank you. Our next question comes from the line of Mohit Bansal with Citigroup. Your line is now open. Mohit Bansal Great.
spk06: Thanks for taking my question and thanks for providing all this morning. So maybe just trying to do some math here. So looking at, you know, 4.5 million number for the quarter, analyzing at about $18 million. Obviously it is early, but if you think about this being a 15% share of new market, new patient market, that only gives me about $120 million annual run rate, even at 100%. And if I, even if it increased by 30 to 40% accounting for COVID, I still get to $170 million tops. So I'm just trying to understand, does this mean the market opportunity is still like sub $200 million in this patient segment? how should we think about that? Because, I mean, it seems like everything is going in the right direction, but it is not translating into sales.
spk10: Hi, Moet. Thank you for the question. And, no, in fact, our view of the market hasn't changed at all with respect to the attractiveness of TASVERIC in this market or the market size. Again, keep in mind, if the market is 10,000 to 12,000, And considering that, so just look in the third line alone. The third line portion of that patient population is about 5,000 patients. We estimate that those patients on average tend to turn over roughly once a year on average. So that means that of those patients, they're always drug treated at some point because they have changes of therapy. That's the number that, you know, if you use that as the market size would be the appropriate size, just a third line and later if you annualize revenues. Keep in mind, the numbers that we're reporting are over the course of an entire quarter, so some of those patients don't have the benefit of three months of sales. They came at the end of the quarter. But even in that, if you assume that patient population in the third line and later is roughly 5,000, that's roughly 400-plus patients per month that would normally be cycling through a new therapy. That's the number that's down by 40%. It remained down by 40%. It was down more than that earlier in the year. but it remained down by 40%. So those are patients that if they're not coming on to a new treatment, we don't have access to them, but it also affects the overall size of the market. But it's not a size, it doesn't change the size of the market. We expect those patients will eventually come back. And as I said, many of those patients have been away for many months. Physicians are starting to indicate that they're trying to bring those patients back in now because they realize they need to be seen, they need to be brought back and assessed. And I'll let Shefali talk a bit more about conversations that she's having with them But when you look at it that way and look at the total annualized value of that size of that patient population, it's consistent with what we've already said. But it also is a part of the limitation of why getting to total share takes a bit longer if you have a 40% reduction in the new starts that are happening on a month-by-month basis because the patients just aren't coming in. Shefali, maybe I'll ask you to speak to some of the conversations you are having with physicians that they're having with their patients now.
spk02: Sure. Good morning, Mohit. I think it's an important question because I talked to the physicians, both community and academic. You know, because of COVID, the number of visits, you know, as you know, especially around April, May, June, was very, very low. It actually increased a little bit in the third quarter, a little bit. But then, again, we had the second surge. So the number of, you know, these are elderly patients. It's an endocrine disease. It's not like an aggressive tumor like DLBCL. And because of that, you know, these elderly patients don't want to go to the clinic or to the hospital anymore. physicians have daily visits and, you know, they talk to them. Only if they're symptomatic and they're progressing, they would go into the clinic. But now, you know, it is a tumor. It is cancer. So physicians try to see and encourage the patients to come in. And so what we expect is as the COVID vaccination is increasing, these patients are getting now based on the category vaccination, we hope to see the increase of these patients coming into the clinics. And it's an important factor for us to access that because they have to come to the clinic for us to be able to access or change the therapy. So, again, I think it's going to change as the COVID environment changes, and we are very encouraged by that.
spk06: Very helpful. Thank you very much for this. One other question. To the extent a physician who has been detailed by you is prescribing or not prescribing Tesleric, what are the reasons why physicians to choose something else over Tasveric at this point, especially in third life setting?
spk01: Yeah, that's a great, everyone's looking at me. That's a great question, Mohit, and nice to meet you again. We typically, I think it's a couple of factors, right? And we do a lot of advisory sessions and talking to physicians. And what we hear from them often, believe it or not, is especially in a COVID environment, they say they're creatures of habit. And in the community setting, you know, believe it or not, we see a lot of Rituxan monotherapy used, which is surprising, and they use it over and over and over again. The good news is that now they have another option. And so, like I said, it just takes us, in my prepared remarks, I made the point about frequency, right? We've reached all these counts. We've reached over 60% of our top tier physicians, top two tiers, But it takes frequency, right, of getting that message across multiple times for them to change habit. And so we're doing a lot of things from the peer-to-peer perspective, as I mentioned, to get in front of them in different ways. because it is challenging for the field team. Some of these accounts are still closed. So we're providing them novel tools, like I said, the peer-to-peer engagement, doing other things to help with the educational piece of the label. And once they get an experience, what we're finding is they really are like, wow, you know, they want to use the drug again. So getting that first experience is really important.
spk02: Very helpful.
spk06: Thank you very much. Sorry, go ahead, Shafali.
spk02: No, and one thing more, that I don't think it's using it over taseric overall therapies. Like, I think I'd want to go back, especially in this situation, it's just getting the chance to change therapy. And it's an important point for these patients right now. I don't think they're choosing some other drug over taseric at this moment. I think they're just not going into the clinic and trying to have a change for therapy. So it's important to remember that during the situation.
spk06: Very helpful. Thank you very much. Really, really appreciate it.
spk04: Thank you. Our next question comes from the line of David Lebowitz with Morgan Stanley. Your line is now open.
spk08: Well, thank you very much for taking my question. Given the nature of the environment, is there, I guess, any way that we could see, I guess, getting closer to a normalized launch in the current environment as you get more used to running with the virtual launch, or do we really need to wait until the pandemic kind of runs its course into 2022 until we can kind of see the launch get more normalized?
spk10: David, thank you for the question. Let me start, and I'll ask Vicki to add if I miss anything. But there are a couple of parts to your question. First of all, with respect to how we're executing and does the market need to return to somewhat normal for us to be able to be effective? I think we're taking a completely different point of view. We've taken the point of view that we don't know how long the pandemic and the effects of the pandemic will be here. So we are adapting everything we're doing to be even more effective in this current environment. working remotely the way that we are. The challenge is the frequency is harder to get to, and when you have a new product and you're educating on a new mechanism, frequency does matter. But we're finding ways to do that. Some of the really interesting peer-to-peer work we're doing, it's physicians who've actually used the product in front of other physicians who haven't, especially in the community setting, and we're finding those have been very effective in helping physicians understand the label of the data and when and how to use TASFERIC. But we're certainly not waiting for the environment to change. We are learning how to work more effectively in this environment. I actually think some of the things that we've done differently because of it will help us be more effective going forward because I'm not sure the access to institutions will completely go back to normal. Some of the institutions were starting to limit access anyway. But with respect to the patients coming in, because that's really the big trigger, we are starting to see that change. It didn't change in the fourth quarter, and we talked about that on the call. We haven't seen a big change in the first quarter this year, but again, the vaccinations really are starting to just be rolled out to the next wave of patients. But we expect that with two things, the vaccinations being more fully distributed, number one. And number two, these patients, as Shivali was saying, they've just been away now for so long. These are patients that although they were told up front, it might be better to take a watchful waiting approach. That works for a few months, but they can't go many, many months without seeing their physician. These are cancer patients. And because of that, the physicians are now starting to ask these patients to come back in and they want to see them. So we expect that that will start to change this year. The only reason we're not giving revenue guidance for the year is the rate to which that happens is just, you know, it's completely unclear. We do expect that it will begin to change for the reasons that I said, wider vaccination and the fact that these patients ultimately need to be seen by their physicians.
spk01: Yeah, and I would just add to that to say that that was why we, you know, We're trying to focus on what we can control. We can't necessarily control, it's hard for us to impact patients coming back in, although we are doing some work with advocacy to see if there's an opportunity there to help with that. But we need to focus on controlling what we can directly control, which is educating the physician, getting new patient starts focused on getting new accounts to get experience with the drug. And that, like I said, once they have experience, we believe, and based on that experience, they're going to use more. So that's what we're focused on, what we can control at this point.
spk08: That makes sense. When it comes to, I guess, doctors typically like to see their patients before making a change in therapy, right? Doesn't that also mean they would typically like a comfort level of knowing the patient will be able to come in subsequent to that point, given that if the patient has a tolerability issue, that they might need to see the patient in relative short order at a subsequent point to that? So they don't just need to see the patient initially, but they need to know they'll be able to see the patient subsequent to that in the coming months.
spk02: Yeah, this is Shefali. Let me address it. So absolutely, I think what happens is they have televisits, and I'm hearing that from the physicians. They have initial televisits, and they discuss the symptomatic progression if there is happening something. And if they feel that there is symptomatic progression, they absolutely ask the patient to come in. They do their scans. They understand if the patient is progressing. And if they are, they change the therapy. There is frequent follow-up initially to ensure that there is no safety issue, especially if they're changing into new drugs. But, you know, knowing the profile of Tasveric, as you know, I think that concern is very low, right? So the monitoring is, and that's the strength of Tasveric, you don't require that kind of monitoring. If you're giving an IV therapy or something like that, of course you require monitoring and IV, you know, administration. But I think that's where we feel Tasveric is important based on safety profile and requires less monitoring.
spk10: Thank you for taking the question. Yeah, David, it was actually a part of the earlier question too was, you know, what's the barrier to a new prescription? And part of it is what you referenced is even with a drug that has a profile that you should be ideal in this situation because patients don't have to come in to get abused. If it's a mechanism or drug that they don't have experience with, if they're not seeing their patient, initially they may be more reluctant to try something new that they don't understand. But what we're hearing from the physicians Once they've tried it, they're seeing that the drug is very well tolerated. They're seeing great responses in their patients. And they're much more open to writing to many more patients once they have the opportunity. So as Vicki said, it really just takes that first opportunity. And it's why the peer-to-peer programs we're doing have been so effective, because they're getting to hear now directly from peers who've written the drug as a surrogate for their own experience to give them comfort in using PASVIRIC in their patients as well.
spk08: Thanks for taking my questions.
spk10: Thanks, David.
spk04: Thank you. Our next question comes from the line of Peter Lawson with Barclays. Your line is now open.
spk09: Hey, thanks for taking my questions. Just a follow-up from that last dialogue. Any sense of the script renewals you've seen?
spk10: Yeah, let me start, Peter, and then maybe I'll ask Vicki to comment further. But, you know, it's... For some of the prescriptions we have that go through the specialty pharmacy channel, we have a lot more visibility as scripts are refilled. For those that go through the specialty distributor channel, we don't. We sell into the channel, and they distribute to the accounts. But from what we can see so far with the FL patients, we're seeing great persistence on the drug, and we would have expected that. Remember, the average duration of response in our Phase II study was about a year for those patients, and we expected that the duration of response might actually be higher in the clinical setting. So we've seen that a majority of the patients in FL who've been written going all the way back to June when we got the approval are actually still on therapy. So we're very pleased by that. Also with regards to just compliance, we've not seen any issues with compliance. Patients are very compliant with their therapy. Again, in the phase two trial, we saw a very high rate of compliance there as well. So we didn't expect to have compliance issues. In epithelioid sarcoma, some of the earlier patients, dropped off after, as Vicky said, I think an average of about five months. But remember, the first patients that we got on drug in the ES launch were those patients who are second, third, fourth line. And those were the patients who tend to have a much shorter survival because of the severity of their disease. And that's why our focus this year is really beginning to push more upstream, getting those patients in the first line setting where we saw a higher response rate and a higher duration of treatment in the phase two study.
spk09: Great. Thank you. And then just Is there any way of kind of breaking out ES versus follicular revenues or scripts? Is that kind of like 50-50 at the moment?
spk10: For the factors that I talked about with the way the scripts, how much of them go through the specialty pharmacy channel and the specialty distributor channel, we have less visibility into the SD. But I can tell you that our view is that the majority of the growth that we saw in the fourth quarter all came from follicular lymphoma.
spk09: Okay, thank you. And then just to Just a final question, just on the last or the first few weeks of 1Q, you've seen a similar kind of trend and traction for tizmatastat, and have you started seeing an impact from that NCCN guideline change?
spk10: Let me address those separately. I think the NCCN guidelines, because it's the first time the question has come up, first of all, the label already allowed for that, so the NCCN guideline isn't new. I think it's good for us in that it reinforces the lack of requirement for testing for some physicians if they might have had some confusion about the label, but the label already allows for that. And for the physicians who've used TASVIRIC, one of the comments has been they really appreciate the flexibility that the label provides them. So we think the NCCN guidelines just reinforces that. It's actually not something new that didn't exist before. But with regard to the first quarter, you know, the trends are positive. As I said, we're not giving specific guidance on first quarter, but Some of the larger trends around patients coming in, we've not seen a major difference in first quarter, but we didn't expect to. We expected it would be after the vaccinations began to take hold more. But with respect to physician adoption, we continue to see the kind of trend that we saw coming out of the end of 2020. Great. Thank you so much.
spk09: Thanks for taking the questions.
spk04: Thank you. Thank you. Our next question comes from the line of David Nywengargen with Web of Securities. Your line is now open.
spk12: Hey, thanks for taking the question. So looking pre-COVID, my question is, you know, about how many times did these patients go in to see the doctor so that we could maybe think about going forward? Are the patients going to, in your opinion, as COVID recedes, see the doctors or see their physician with the same frequency? Or, you know, might there be a bit of a rush to get an appointment to reset therapy? Or, you know, again, would it go back to kind of the pre-COVID frequency, whatever that was? And if you knew what that was, I'd appreciate knowing the frequency of doctor visits. Thanks.
spk10: Yeah, David, this is Rob. So let me answer. There are two parts. I'll talk about the frequency with which patients are getting treatments changed, and then I'll turn it over to Shefali to talk about what would be a normal, you know, regular cycle of how often these patients tend to see their physicians. The third line and later patients, we expect that they, you know, just based on historical trends, based on the data and other drugs that have been approved in the third line setting, because duration of treatment, duration of response tends to be about a year. we typically see that they turn over their therapy on average about once a year. With respect to how often they actually see their physician in the course of the year, I'll let Shefali speak to that.
spk02: Yeah. Hi, David. So normally, ideally, it depends on the line of therapy. And also, you know, if you look at Third Line and beyond, based on the insurance coverage and the number of scans they do, it's ideally every three months that they go to visit the patient, you know, to the doctor, and they just check for scans and things like that. unless there's a safety issue and you have certain drugs that are IV, you know, initially they would go high. Like, for example, I'll give you R-square. It's given every, you know, it's given for a year. It's an IV administration. So you go more frequently because you're getting IV and things like that. But normally, for a normal checkup, it's every three months.
spk12: Got it. And do you think that, like I said, I don't want to say it bolus, but do you think that there would be, you know... you know a temporary blip or whatever you want to call it a temporary increase in those um visits you know as it repeats or you know because it's kind of receding you know gradually or or you know patient perception will receive gradually you think it kind of returns toward just a regular yeah i'll see you in may you know um comment so i think it all depends on lord depends on the cover vaccination and how frequently you know how everybody's covered
spk02: But I think overall, I still believe that, you know, as I talk to physicians, they're talking to the patients, they're trying to get them in. So I don't expect that all the patients would come in one go. I think it will be gradual. And the hospital themselves will open gradually, right? It's not going to happen like everybody gets vaccinated and the hospitals become just normal right away. I think it's going to take time to adapt to normal. I think that's what.
spk12: Okay. Great. Thank you. Okay.
spk04: Thank you. Our next question comes from the line of Andrew Behrens with SVB LeRinc. Your line is now open.
spk13: Hi, thanks. Rob, in your prepared comments, I think it was you mentioned that you're getting uptake in the second line setting, but the uptake is predominantly in EZH2 positive patients. So I have a few questions on that observation. Does that encourage you to promote testing awareness amongst the docs? And I guess what is the status of EZH testing now as a spandalin test and part of a panel? And have you seen the number of patients being tested for EZH2 status going up? And then you may have said this, but what percentage of patients treated with Tazveric for follicular lymphoma are wild type versus EZH2 positive?
spk10: So there are a lot of parts to that question. Let me walk through them one by one. Thanks for the questions. And if I miss anything, I'll let Vicki fill in. First of all, let's talk about EZH2 testing because I think it's relevant to your question around second line. We have seen an increase in testing for EZH2 as we had expected that we would following the approval. We are, from the market research that we do, it looks like about 50% of physicians are testing for EZH2 today. That's up a bit from the pre-launch levels. What we understand from that is they're not testing necessarily as a decision point about whether to use TASVIRIC or not. They just want to understand the type of disease their patient has, and they want to be able to set expectations with their patients. But many times they're ordering the test at the same time they write the prescription, so they're not actually using it as a condition for prescribing TASVIRIC. In the second-line setting, I think it probably is used more that way because most of the use for TASVIRIC has been monotherapy. That's the label. Physicians are expressing a lot of interest in combinations and experimenting with different combinations, but most of what we've seen so far commercially has been as monotherapy. So in the second-line setting, again, given the stronger data in mutant versus wild-type, it makes sense that that's where more of the use would be coming as a monotherapy in the second-line setting. So did that answer your two questions on those?
spk13: Right. Okay. you are seeing about 50% of the patients that get Tesveric tested for EZH2?
spk10: What was the 50%? Yeah, about 50% of the physicians that we did market research with say they are testing for EZH2, not necessarily 50% of the patients, but about 50% of physicians now say they're testing. Okay.
spk01: Getting at the number is quite challenging because, obviously, We do buy claims data, but the claims data doesn't include whether they were tests or not. So we don't have good visibility to that number, although we know that in the third-line test setting, we are seeing more mutant utilization as well based on the market research that we have.
spk10: Okay.
spk01: What percentage? In the unknown or untested or wild type.
spk13: Okay. So just to follow up, what percentage of patients in follicular that get the drug are UCH2 positive?
spk10: I would think you have that number available. We don't have a good breakdown on that, again, because of all, you know, the part of the product, which is over half of the scripts, go through the specialty distributor. So we actually have to do retrospective research to get an understanding of, you know, how we think the drug is being used on things. It's not captured through the specialty distributor, but You know, anecdotally, the feedback we're getting in through market research, all three are growing, both mutant, wild type, and untested, which is actually a pretty big part of the market where physicians don't test at all. All three of those are growing. And as Vicky said, we're getting, you know, roughly over the average of a quarter, 15% to 20% of all the patients in the third line setting in new prescriptions. We exited higher than that. That's the average for the quarter. so that's more than double where we were in the third quarter in terms of new patient starts. But across those, it's mutant, it's wild type, and it's patients who were untested, which is a pretty large group of the total.
spk13: What is the availability of the EZH2 test as a standalone test?
spk10: It's pretty widely available. Remember, the label allows for any FDA-approved FDA test for EZH2 is sufficient. And what we're hearing from the payers is that they also allow for local testing. And so there are many institutions have their own tests that they can use. Also, EZH2 is included on panels with both Quest and other commercial diagnostics. There are panels that include EZH2 in them. So there are many ways that physicians can access EZH2 testing. We think that's a part of the reason that the testing rate has gone up among physicians has gone up from, you know, 30%, 35% prelaunch to around 50% today.
spk13: Okay. Thanks for answering all the questions. Appreciate it. Thank you, Andy.
spk04: Thank you. There are no further questions. I would now like to turn the call back to Rob Bazemore for closing remarks.
spk10: Great. Thank you, Operator, and thank you all for joining us today and for all of your questions. We hope you can join us for our call to discuss the next episode for Epizyme on March 2nd, next Tuesday, and that you all stay safe and healthy. Have a great day. Bye, everyone.
spk04: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
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