Global Blood Therapeutics, Inc.

Greetings and welcome to Global Blood Therapeutics Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the prepared remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to Mr. Stephen Emmergut. Please go ahead, sir. You may begin.

Thank you, and welcome to GBT's conference call to discuss the company's financial results for the fourth quarter and full year 2020, and to provide a business update. I'm Stephen Immigrant, Head of Communications and Investor Relations. Joining me on the call are Dr. Ted Love, our President and CEO, who will provide a high-level update on our progress in the fourth quarter and over the full year 2020, Jeff Farrow, our Chief Financial Officer, who will provide an overview of our financial results, and David Johnson, or DJ, our Chief Commercial Officer, who will give an update on the OxBrighto launch. Ted will then close with an update on our pipeline activities and other long-term growth initiatives. Earlier this afternoon, we issued a press release announcing GBT's progress in financial results for the fourth quarter and year-ended December 31st, 2020. Before we begin, I would like to remind you that certain statements we make on this call that are not historical facts may be forward-looking statements that are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are contained in our SEC filings, including but not limited to our most recent annual report on Form 10-K, as well as in today's press release. from the investors page of our company website at gvt.com. The forward-looking statements made on this call are only as of the time they are made and should not place undue reliance on such statements. Future events or simply the passage of time may cause our beliefs to change, and we disclaim any obligation to update any forward-looking statements other than as required by law. With that, I will turn the call over to Ted.

Thank you, Stephen, and good afternoon, everyone. 2020 was a historic year for GBT, headlined by the launch of Oxprida and significant progress on our R&D pipeline. We are in a position of strength, and we continue to build value with multiple commercial, regulatory, and clinical milestones in the coming months and years. It is clear that Oxprida's fundamentals are strong. This is supported by several facts. First, strong adoption and awareness. During the first full year of the launch, we generated nearly 124 million in revenue, making it the most successful launch in sickle cell disease history. This happened despite a once-in-a-century pandemic. In addition, physician and patient awareness of OxyPrata is extremely high. Nearly 100% of healthcare professionals who are aware of OxyPrata either have prescribed it or plan to. Second, robust data. The growing body of clinical data, including the HOPE study, shows that OXFRADA resulted in durable improvement in hemoglobin and hemolysis over 72 weeks of treatment. Both the HOPE study and the published real-world experience data shows most patients taking OXFRADA report improvement in overall health status. We've seen, in real-world data, statistically significant reductions in blood transfusions and VOCs. And I know many patients that have returned to their normal daily activities, including getting back into the workforce. And third, broad access. Our analysis of prescription trends confirmed that HCPs are starting a broad range of patients on Oxprida, irrespective of their baseline hemoglobin, VOC history, and age. We established broad payer coverage in less than a year, one quarter ahead of our 2020 goal, which demonstrates that payers understand the benefits of Oxprida. Based on these points, we believe Oxprida is well on its way to become foundational in SCD care. In every launch, you learn and adapt. COVID-19 has accelerated this process for our team, and we believe this will put GBT in an even stronger position coming out of the pandemic. Until that time comes, we believe we can continue to sustain our current levels of new prescriptions and look forward to the opportunity to accelerate our growth when the pandemic subsides. We have a deep appreciation for the disproportionate impact of COVID-19 on sickle cell patients and the racial inequalities in healthcare, which have been magnified by the pandemic. As part of our long-term commitment, GBT support for the sickle cell community has increased each year, and we are proud to have helped this community in a variety of ways in 2020. Total financial support was more than $2 million, and a couple of specific examples include, number one, GBT, our employees, and members of our board contributed nearly $400,000 to directly support the urgent patient and family needs related to the COVID-19 pandemic. Number two, we also provided funding to nonprofit organizations working to improve access to care in SED through our ongoing Excel grant program. And thirdly, we hosted the ninth annual Sickle Cell Disease Therapeutics Conference to further advance healthcare for people living with sickle cell disease. Overall, we are very happy with our launch progress. GBT is a clear leader in sickle cell disease, and we are poised to deliver for patients in 2021 and beyond. With that, I will turn the call over to Jeff to provide an update on our fourth quarter and full year results.

Thank you, Ted. GBT delivered solid results in the fourth quarter and full year 2020, and we have continued to maintain a healthy balance sheet. It is also exciting to see the investment we have made in our SCD pipeline evolve as we move two new assets into the clinic. Total net revenues from sales of Oxbrita was $41.3 million, for the fourth quarter of 2020 and $123.8 million for the full year 2020, despite the ongoing impact of COVID-19. Fourth quarter revenue grew by $4.4 million, or 12%, over the third quarter. The sequential revenue growth was driven by patient demand for Oxbrida, primarily from prescription refills. This was partially offset by the impact on new prescriptions due to the pandemic and the Thanksgiving and Christmas holidays. Our gross to net adjustment was approximately 12% in the fourth quarter. As previously noted, we continue to expect our gross to net adjustment to increase over time, driven by patient insurance coverage, prescriptions filled by 340B pharmacies, the Medicare Part D coverage gap, and patient co-pay assistance. Our gross to net adjustment and fourth quarter revenue benefited by approximately $600,000 related to a reversal of our return reserve for Oxbrita. As we come to the end of our first year of launch and review actual levels of returns, which have been de minimis, we've adjusted the return reserve to appropriate levels. In terms of inventory, days on hand at our distributors was approximately three days higher than the elevated level of inventory we experienced in the third quarter. So as we think about the first quarter of 2021, this could result in less bottle purchases as distributors utilize the inventory built up in Q3 and Q4. Overall, I'm pleased with the revenue from Oxbrita in 2020. As we think about the first quarter of 2021, we anticipate flat revenue compared to fourth quarter 2020, which includes the expectation of a higher gross to net adjustment. We also expect new prescriptions to remain flat, and we do not expect to see significant growth until the pandemic subsides. Based on the latest thinking, our best estimate is that this may not occur until the second half of this year, after which we anticipate we will be able to incrementally increase new prescriptions quarter over quarter. DJ will talk more about some of our ongoing efforts. Cost of sales for the fourth quarter was approximately $1 million, and for the full year was approximately $2 million, as compared with $48,000 for the fourth quarter and full year 2019. Cost of sales was low in the prior year, as the majority of the manufacturing costs related to Oxbrite sales were incurred prior to FDA approval and thus were recorded as R&D expense. We continue to expect that the cost of Oxbrite sales as a percentage of revenues will increase as fully expensed product manufactured prior to FDA approval is utilized. We continue to believe that we have a robust commercial supply of Oxbrita to sustain estimated patient needs into 2022, and the production of Oxbrita by our contract manufacturers has not been impacted by government-mandated COVID-19 vaccine production orders. R&D expenses for the fourth quarter of 2020 were $41 million compared with $65 million for the same period, 2019. For the full year, R&D expenses were $155 million compared with $175 million in the prior year. The fourth quarter of 2019 included $20 million in expense related to the Cirrus Pharmaceuticals Collaboration Agreement signed in December 2019. Excluding the Cirrus expense, the decrease in R&D expenses in the fourth quarter was primarily due to lower manufacturing costs for Oxbrita as, following FDA approval, we capitalized manufacturing inventory. This decrease was partially offset by an increase in external costs related to our NCLACMAP program and preclinical research activities related to our seros collaboration. Sales, general, and administrative costs for the fourth quarter of 2020 were $59 million, compared with $45 million for the same period in 2019. For the full year, SG&A was $211 million compared to $117 million in the prior year. The increase in SG&A expenses was primarily due to increased employee-related costs, including non-cash stock compensation and other professional and consulting services associated with the build-out of our commercial operations and launch of Oxbrida. Our increased patient and HCP education and promotion efforts are also reflected in SG&A expenses in 2020. Net loss for the fourth quarter was $62 million compared to $96 million for the same period in 2019. Net loss for the full year was $248 million compared to $267 million in the prior year. Basic and diluted net loss per share for Q4 was $1 per share compared with $1.59 per share for the same period in 2019. Basic and diluted net loss per share for the full year was $4.04 per share compared to $4.57 per share in the prior year. We ended the year with a strong balance sheet and with cash, cash equivalents, and marketable securities of $560.9 million compared with $535.2 million at September 30, 2020. In summary, an unpredictable year. I'm extremely pleased with GBT's 2020 results. Our revenue from Oxbrida has far exceeded pre-pandemic street expectations, and we're in a strong financial position. I also remain confident that when COVID-19 subsides, our growth will accelerate, and our positioning for the long term will remain strong. And with that, I will now turn the call over to DJ.

Thank you, Jeff, and good afternoon, everyone. We ended 2020 by delivering another quarter of solid progress with the Oxbrida launch. We achieved this in spite of growing COVID-19 cases across the U.S., which is a testament to the passion and dedication of our team. I want to thank all of our employees for the effort throughout the launch. As I've done in prior quarters, I will provide an update around the three key metrics that, combined with net revenues, will give you further insight into our progress. These metrics are new prescriptions for Oxbrita, which informs underlying patient demand, the number of healthcare providers prescribing Oxbrita, which captures the progress we're making in adoption, and payer coverage, which speaks to the access environment for Oxbrita. First, new prescriptions. Nearly 5,000 new prescriptions were written for Oxbrita between launch and the end of 2020, including approximately 950 during Q4. This is despite a continued decrease level of sickle cell patient and healthcare provider interactions due to the pandemic. We're pleased that we were able to maintain this level of new prescriptions in the fourth quarter given the dramatic and rapid rise in COVID-19 cases, coupled with the normal impact of the holidays. As we continue to increase the number of patients in our patient claims and lab data, it now reflects more than 2,400 patients, we continue to see a broad patient profile for Oxbrita. Nearly half of Oxbrita patients have an average base hemoglobin above 8 grams per deciliter, and about one-third have a baseline of three or more annual VOCs. In addition, more than half of Oxbrita patients are on a combination regimen. These trends bode well for the future of Oxbrita as it shows a broad range of use. Beginning in Q3, we rolled out several new websites and drove social media that increased our interactions with healthcare providers and patients in the second half of the year. At the end of 2020, we had more than 425 visits per day to our HCP-focused websites. We recorded more than 14 million digital impressions from HCPs in the second half of 2020, with 75% growth in the impressions in Q4 over Q3. And our patient-focused disease awareness program, Sickle Cell Speaks, has now grown to more than 60,000 followers on Facebook. We think that's a great indicator of our ability to educate on SCD. We continue to roll out new content in 2021, leveraging a broader toolbox of marketing and educational materials. For example, we now offer getting started guides and brochures, which can be provided to patients to support discussions on Oxbrita. For GBTSource solutions, we now exclusively offer our high-touch model, which has shown to result in better adherence rates. And we recently launched the GBTSource.com website, to provide information for patients, caregivers, and healthcare professionals about starting and staying on Oxbrita. We also recently partnered with the iconic magazine brand Essence to educate and motivate our patients and caregivers via sponsored content and digital advertising. And finally, after following the requirements of the FDA pre-submission under Oxbrita's accelerated approval process, we will have new patient tools, including everything from treatment journals, side effect management tip sheets, and smart bottle cap stickers and alarms with the goal of improving overall adherence. In addition, our field teams have been trained on the 72-week analysis of the Phase 3 Hope Study, which was presented at ASH in December, to use in the field supplementing our already compelling 24-week data. Our medical field teams also are trained on the emerging real-world data and have been educating HCPs on these important findings. In addition, The team recently launched a new MSL on-demand capability so that they can interact with healthcare professionals in real time. This new offering allows us to address the challenge of limited in-person meeting opportunities with healthcare professionals while maximizing the impact of our interactions. We believe our digital and field engagements will continue to build awareness with patients as well as support for more physicians prescribing Oxbrita while also helping them keep their patients on therapy in hopes of achieving better outcomes. Which leads me to my second metric, healthcare provider penetration. In the fourth quarter, COVID-19 continued to be a headwind, causing decreased in-person interactions by both patient and our field teams. We continue to drive in-person interactions in the geographies where we are able to do so, and virtual engagements continue in all areas. While interactions were curtailed during the quarter due to the pandemic, We continue to engage in discussions with HCPs with a focus on fostering deeper relationships and gaining an even better understanding of the patient journey. We continue to bring greater awareness to GBT and Oxbrita. And I want to flag what Ted mentioned earlier. Of those HCPs who are aware of Oxbrita, nearly 100% have either prescribed it or plan to in the future. Our efforts in 2020 have contributed to achieving 1,365 unique healthcare providers who have written a prescription for Oxbrita from launch through the end of the year, including about 190 new prescribers in Q4. This is important because we know that new writers typically start multiple patients on Oxbrita. When we look at the breakdown of writers, we continue to see prescriptions being written by both specialists and non-specialists, which we believe is a positive trend for the long-term trajectory of the launch. This is a great start in a solid base of prescribers and consistent with all the launches in my career. As we enter year two of the launch, we are optimizing our sales efforts with learnings from year one. This includes better targeting of our most active HCPs and adjusting territories to maximize access, referral trends, and institutional dynamics. We believe these improvements will position us even better for the future. Turning to payer coverage. As we previously reported, as of September 30th, we achieved broad payer coverage one quarter ahead of our goal. This coverage provides access to 90% of covered lives in the United States. In Q4, we made small incremental gains, and we will continue to work to optimize coverage. In summary, we have acted nimbly in the face of COVID-19, and we have taken the learnings from the first year of launch to enhance how we approach the market. We've also rolled out new materials that focus on expanding adoption and supporting adherence. I believe we are in a stronger position as an organization because of these actions, and I continue to be confident in the long-term potential of Oxprida. I will now turn the call back over to Ted to discuss the potential expansion of Oxprida and our pipeline. Thanks, TJ.

As you've heard today, we made significant progress with the launch of Oxprida, and we continue to refine our tactics in 2021. We also continue to make good progress in our regulatory efforts to broaden access to Oxbrita. We continue to plan to file our regulatory application with the FDA to expand the Oxbrita label to include children ages 4 to 11 by mid-2021. Providing Oxbrita access to younger patients is one of our top priorities. We believe that mitigating red blood cell sickling and destruction early in life will modify the course of the disease and alleviate serious and life-threatening complications. In the U.S., we recently enrolled the first patients in our Pediatric Expanded Access Program, or EAP, to provide access to Oxprida prior to its potential approval for younger children. In January, we announced that the European Medicines Agency accepted our submission for Oxprida for regulatory approval. Based on standard timelines, including clock stoppages, we estimate their review will take about 12 to 15 months. As the EMA works through their review, physicians are able to gain experience with OXBRETA through an EAP that we launch for eligible patients in Europe and other regions outside the U.S. In the six GCC countries in the Middle East, We continue to work with our distributor partner, BioPharma MEA, to make Oxbrita available. We intend to establish a similar partnership for Latin America, including Brazil, where the bulk of the region's SCD patients live. Now turning to our R&D pipeline, I'm really thrilled about the progress we've made this past year. In December, we announced the appointment of Dr. Kim Smith-Whitley, as EVP and head of research and development. Kim is a highly accomplished global leader in sickle cell disease with an impressive track record. She joins our leadership team from Children's Hospital of Philadelphia, where she will continue to see patients part-time. She will officially join us in May. Let me take a moment to update you on the pipeline. First, in Clactamab, is potentially the best in class P-selectin inhibitor. This therapy has been dosed in more than 700 patients in a previous non-sickle cell program, which gives us confidence in its safety. At ASH, we share data that shows it binds to a unique site that allows incalcomab to inhibit P-selectin more potently, which we believe will enable quarterly dosing versus the currently available monthly intravenous dosing. For an intravenous infusion, quarterly versus monthly dosing is a very important distinction for patients. We plan to initiate two pivotal studies, phase three studies for inclocomab in the first half of 2021. The first study will focus on reducing VOCs over a 48-week treatment period. The second study, Enable Thionic Inclacumab's Quarterly Dosing Potential, will focus on reducing 90-day hospital readmission following an initial VOC hospitalization. The two studies are designed to potentially enable two independent regulatory submissions for separate indications. Moving to GBT21601 or 601, our next generation hemoglobin polymerization inhibitor also has the potential to be best in class. At ASH, we presented data that shows 601 has the potential to normalize hemoglobin through improved red blood cell survival and improved organ function. If this plays out in the clinic, 601 has the potential to provide a functional cure in a once daily pill. We have enrolled patients in a healthy volunteer study And our goal is to have proof of concept data in sickle cell patients by year end. In closing, I want to reiterate three key points regarding the outlook for GPT. First, we are continuing on our path to be the leader in sickle cell disease. Every day, our team is focused on discovering, developing, and delivering highly effective, safe, and scalable therapies for patients living with this terrible disease. We have a strong track record of execution and a deep commitment to the SED community. We are proud to make a difference and determined to end the disparities in healthcare these patients suffer. Second, the Oxprida launch has been a great success. The fundamentals are strong, and we believe this first-in-class oral therapy will become foundational in SED care. Lastly, we are building for the long term with our pipeline and global expansion. Our two lead clinical candidates have best-in-class potential. Enclacomab with potentially more potency and quarterly dosing, and 601 with early data suggesting it may provide a functional cure for sickle cell disease. We could not do any of this without our employees, and I want to thank them for contributing to the impressive progress we made in 2020. and the continued passion they bring every day. We continue to be driven by our mission and we're getting closer to our goal of transforming SED into a well-managed condition. With that, we'd like to open the call for questions. Operator.

Thank you. We will now be conducting a question and answer session. To start, please limit yourself to one question. If we have time remaining, we will take follow-up questions If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation code will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Gregory Renza with RBC Capital Markets. You may proceed with your questions.

Hi, this is Yingluo for Greg. Thank you for taking our question and congrats on the quarter. Maybe just a question on the feedbacks on patients and Doc Assistant program, which has been very positive and notably aggressive. I was wondering how should we foresee that push being sustained and what is the right level of support at steady state? Thanks.

Were you asking about the feedback that we're getting from physicians? I just wanted to make sure I understood the question. This is Ted.

Hi, Ted. Yeah, just feedback from physicians and maybe from patients, too, if possible.

Yeah, yeah, happy to take that. The feedback has been excellent. I mean, as you know, every drug can have side effects, and our side effects have been generally well manageable related to reversible GI issues. And that is a minority of patients from the hopes that I think it was about 25% of patients had GI side effects that were always manageable. But in terms of the patient's feedback, I think one of the abstracts that I would point you to was from ASH. And it reported, I think about 80% of the patients reported that their health status was significantly or at least moderately improved after being on therapy. And that was actually quite consistent with the blinded placebo-controlled data that we gathered in the HOPE study. So we have excellent data to show that it's not just anecdotal that these patients feel better. It's documented through blinded placebo-controlled work. And then as I mentioned in the prepared remarks, We've definitely seen patients also who were unable to work, who've been able to get back into the workplace. So that's all very exciting for us, and I think it's great news for patients.

Great. Thank you, and congrats on being on the quarter.

Thank you.

Our next question comes from the line of Leanna Musatos with Wedbush Securities.

You may proceed with your question. Leanna, your line is live.

Hey, sorry, I was on mute. So you had told us that Q4 would be flat over Q3, and now you're telling us Q1 will be flat over Q4. Just wondering, the success for Q4 revenues, was that due to what you were describing as increased handholding with patients, that you were gonna show them more attention, And apparently, if that's it, it worked. But now you're saying flat over, you know, because of some inventory for a couple of days. But it seems to me that it might be higher than that since Q4 was higher than Q3. Any comments?

So, Leanna, thanks. This is Ted. Thanks for the question. I think I'll ask Jeff to speak to some of the specifics. Sure, yeah.

No, I do think some of the DJ's team's efforts have been helping. As we move forward, clearly the pandemic really reared its ugly head in the second half of Q4. Despite that, we were still able to get 950 new RXs. But there was a couple sort of, I would characterize them as non-routine events that happened in Q4 that if you take them out, it really is more of a flat quarter in Q4. We did have the inventory buildup that you had mentioned earlier. in the fourth quarter of about three days. So we do expect, and we've seen it quite frankly in the first month and a half here of the quarter, where the distributors are not buying as much initially. Now that could change towards the end of the quarter, but currently it's a little bit less than the run rate we saw in the fourth quarter. We also had the impact of a reduction in the gross net given our return reversal of about $600,000. We won't have the benefit of that in the first quarter. And we also expect that gross to net to continue to move up incrementally quarter over quarter. So those are really sort of the reasons that we expect a flat Q1 as it compares to the fourth quarter.

All right.

Thank you very much.

Our next question comes from the line of Alicia Young with Cancer. You may proceed with your question.

Hey, thanks for taking my question. And, you know, kudos to you guys for kind of working through all this. It's a lot to work through. I guess when you're script, you talk a little bit about, like, you know, demand associated with script refills. Is it sort of fair to think that that's picking up a little bit? You know, fundamentally, and I guess in terms of like as it relates to the doctors that you see are coming on, do you feel like there's kind of going to be a kind of another small bump up as we go through the year, you know, as you kind of continue to add doctors and perhaps they add a new tranche of patients? Thanks.

Thanks, Alethea. I'll ask DJ to respond to that.

Sure. Alethea, yeah, we did see refills were strong in Q4. And that helped us out. So we do think our tactics are helping there. And, of course, we have many more tactics that we rolled out throughout Q4 and into Q1. We just had a really effective national meeting this month where we rolled out the 72-week hope data to the field, lots of new materials, including the starter kits, including the patient brochures. And, of course, we're activating our hub to do even more. for patients. So all of this is going to help us. That said, Q4 with the spike in COVID, we did see a decrease in the number of interactions between patients and healthcare providers in the sickle cell community in Q4 from Q3 because of that spike. But that said, we do have some tailwinds that we think are going to help us. So we're very confident about this year being able to be able to grow, especially once we get past the pandemic.

Great, thanks.

Our next question comes from the line of Ritu Barrow with Cowan. You may proceed with your question.

Hi, this is Lila on for Ritu and thank you for taking the question and thank you for the update. If maybe in terms of your rollout and switching to exclusively using the high touch model, could you maybe remind us what left you have with this plan? and when exactly you would anticipate potentially seeing an impact to NRXs with this high-touch model. Thank you.

Thanks, Lila. DJ?

Sure. Yeah, the high-touch model was turned on, and we've always had a high-touch model throughout last year. We gave patients a choice when they enroll in the GBT source solution to do high-touch adherence program or more of a low-touch. What we found in year one is the high-touch model works better at encouraging patients and giving them the information they need to stay on therapy. So we've done away with the low-touch model, and we just simply enroll folks in the high-touch model. We did that. That was initiated at the end of Q4 last year. So all the patients going forward this year will be in that model. In addition, we've pushed some services down to the SP level as well because we know that some patients through the 340B program or whatnot will go straight to our SP partner. as opposed to straight to the hub. And we want to make sure they get the same support. So co-pay assistance, some adherence programs, and things like that are also going to be initiated at the SP level as well. So through all of these efforts, we would expect patients to benefit from these services throughout this year. And the high-touch model is just more outbound phone calls, text messages, reminders, especially in that first month of initiating therapy.

Thank you. Very helpful.

Our next question comes from the line of Yatin Suneha with Guggenheim Partners. You may proceed with your question.

Hi there. Thank you for taking my question. Just two questions for me. Number one for Jeff, if you can help us, you know, if you can maybe quantify how should we model growth to net going up. We understand you have this, you know, reversal, but, you know, how much high you could go. I know in the long term you have set 25-ish percent. What is the trajectory? And then I apologize if I missed it. I think in the past you have provided a little bit more color on three or four metrics like abandonment rate, adherence rate, phasing, and lag time in picking prescription. Can you maybe give us an update relative to the December update that you provided during ASH? Thank you.

Thanks, John. Jeff, you want to speak to the gross net? And maybe, DJ, you could speak to some of the other metrics

Sure, happy to. Hi, Jotun. Yes, I think absent the return reversal, we would have probably ended up pretty close to what we had for Q3, which would have been around 13%, 14%. I think we will see incremental increases in Q1, and it's tough to model just given the that when the 340B pharmacies come online, that's when we'll start to see more of that larger discount taking place, the 23.1% discount that they are eligible for. So if we think about sort of when we expect new RXs to pick up, we would expect that to start to pick up again sometime in the middle to second half of the year. And then I think once we get to steady state, we will probably end up around the 25% range. So it'll be stepwise, you know, as we move through it and ramping up probably a little more significantly in the second half of the year. And then at steady state, which we hope will be sometime in 2022, will be around the 25% rate.

Yeah, and Yatin, we didn't comment a lot on those metrics, mainly because there wasn't anything appreciably different from our Q3 metrics. You know, conversion rates still remain very high in the 75% range in terms of patients coming into the and being converted into a new patient start. So that remains consistent in Q4. You know, abandonment rates kind of still at that same level it's been at, but we are very successful at converting the vast majority of patients to a new start. Adherence rates are consistent, right? We're still well within that range of first year products being within 50 to 70% adherence rate for an annual rate. And we ended the year, again, well within that rate. So no changes there. And then start times, I think we've kind of optimized our start times to about two weeks. From the time we get the prescription, it takes about two weeks for us to work with the payer, the prior authorization process, applying a copay assistance or any other support the patient needs, and then it's converted into a shipment. And so it was consistent in Q4 at about two weeks with Q3.

Very helpful, thanks.

Our next question comes from the line of Jason Gerberry with Bank of America. You may proceed with your question.

Hi, this is Sadia Rahman on for Jason. Thanks for taking the questions. Just wondering if you can talk about the current market environment in a little more detail as far as patient flows, percent of normal you know, interactions with a healthcare provider more recently.

Yeah, thanks for the question. I think that, you know, we've, it's pretty much what we would expect. As we've seen the COVID cases rise, we've consistently seen physician-patient interactions go downward. And as Jeff referred to, that was certainly something that was very significant. in Q4. So that's why we're, quite frankly, very happy that we've been able to hold our enrollment in the 1,000 range, 950 specifically in Q4. We obviously expect that to improve as COVID, as we get beyond COVID, and maybe there will even be a bit of a recovery because many of these patients probably have gone a significant period without seeing the physicians. DJ, do you have anything you want to add to that?

Just that our overall engagement with our field teams and our target list was a little bit lower in Q4 than Q3, and some of that had to do with the two holidays in Q4. In addition, we were able to maintain, despite the increase in COVID, about 25% of our interactions were in person, higher in some markets like New York, where it was about half of our interactions in Q4 were in person, and lower in other markets where it's a little bit more shut down. So, but we're doing, of course, virtual engagements across the board as well. So Q4, because of the holidays, a little bit lower on the engagement and because of COVID.

Okay, great. Also on the durability of patients remaining on drugs, just from the early adopting cohort specifically, you know, those who started the drug on in the first quarter of 2020, do you have numbers for what percentage remain on drugs?

Well, I think we really only report out one-year numbers because that's the only thing you can really compare to. As DJ likes to say, persistence always goes down, right? Because patients get older, they die, you know, so persistence ultimately will go to zero if you follow people long enough just through the mortality effect. So to be kind of consistent and have something to compare to, we compare to the one-year number and really want to just educate that when you look at the one-year number, we are consistent with other comparable products.

All right. Thank you. Our next question comes from the line of Mark Bradenback with Oppenheimer. You may proceed with your question.

Hey, guys. Thanks for taking the question. Just wondering if we should expect Oxbrita's European label to be materially different from the U.S. label since the EMA isn't requiring a post-approval confirmatory trial. And I just wanted to also make sure that of the 950 new prescriptions that you recorded in 4Q, does that include any contribution from the Early Access Program in Europe or other ex-U.S. territories, or is that those are all U.S. prescriptions? Thanks.

So, no. The early access program is non-revenue, so we would not count that as an enrollment. Even in the U.S., we would not count early access enrollment of children as enrollments. And we also don't count patients that are restarting therapy as enrollments either. All of the enrollments are new enrollments. patients that are within label that would, in the majority of cases, be pain patients. The question with regard to the EMA is a good question. We obviously don't know how things will work out ultimately with the EMA, but we've had obviously very good interactions with them to date. Our requested indication in Europe is for the treatment of of the anemia and hemolysis of sickle cell disease. So it's a slightly different wording than in the U.S. Essentially all patients with sickle cell disease have anemia and hemolysis. So it's not a terribly different label, but it is a label that speaks to something that we know the drug does in fact. And to your question about requesting of a confirmatory study, We've had no such discussions with them on that topic. We don't anticipate that, but of course, you know, you don't know what's going to happen in a regulatory process until you get through it.

Got it. Thanks for taking the question. You're welcome.

You're welcome. Our next question comes from the line of Joe Poven with Wells Fargo. You may proceed with your question.

Great. Thanks for taking our questions, guys, and congrats on the progress. DJ, for patients who have not persisted on therapy, maybe can you provide us any color on efforts you're taking to get patients back on therapy? And then quickly, Ted, maybe just for next-gen 601, with the proof-of-concept data coming by year-end, can you just remind us how hemoglobin occupancy translates into improved efficacy and maybe what's the target profile there?

Right. Maybe I'll start first and then transition to DJ. Okay. A lot of the information about what kind of occupancy you want is derived from genetic data. For example, in individuals with persistent expression of fetal hemoglobin, we find that those individuals are essentially normal when about 35% or more of their hemoglobin is fetal hemoglobin. And we know from a lot of work that we did initially with Oxbrita, but ultimately it's relevant for 601, that modifying a sickle hemoglobin molecule is functionally the same as introducing a hemoglobin F molecule. So we'd be looking for similar levels of modification in the 35% range. The data that we actually showed at ASH, which showed that the sickle mice were essentially being cured of sickle cell disease, was in fact targeting about 35% modification. So we think that's the right target. And then finally, with regard to what we would expect to be showing in proof of concept data, we would be looking for occupancy. We'd be looking for kind of a maximum effect on hemolysis and maximum effect on raising hemoglobin. And we're also likely to do some functional looking at the cells using things like the Lorca technology to look at how flexible the cells are, how much you can elongate them, their reaction is essentially the oxidative stress. So we'd be looking at some of those functional data as well.

Yeah, and then regarding discontinuations, First, by way of background, we wouldn't classify someone as a discontinuation based on missing a shipment and missing a few phone calls. We do a lot of follow-up over the course of weeks and even months before we would classify someone as a discontinuation. That said, if somebody does discontinue, we still don't give up on them. And we really approach them from four different support mechanisms. Educating the doctor's office to continue to reach out to the patient and encourage them to re-engage. Our GBT Source Solution Hub does outpatient outreach to engage with patients to reconnect. Our SP partners are very engaged in talking with the patient and trying to re-engage the patient. And lastly, we have a very strong advocacy team that is in touch with the community, and we engage the advocates and the community to educate them on the importance of staying on therapy. So we have those four mechanisms, and we've been successful. About 20% of our discontinuations ultimately restart. We found that out throughout last year.

Very helpful. Thanks, guys.

Our next question comes from the line of Paul Choi with Goldman Sachs. You may proceed with your question.

Thank you. And let me add my congrats to your progress as well. My question is with regard to your commercial efforts, I guess, As you get feedback from your Salesforce and patient feedback, I guess over the near term in the course of 2021, which of the sort of levers do you think are most addressable and actionable by your Salesforce? Is it with regard to the abandonment rate at the top of the funnel, or do you think it's payer coverage or payer rejections? And just maybe on that last part there, what has been the recent coverage rate by payers? Thank you.

You may want to take that, and I'll add in if you like. Sure. Well, I think our sales force is very focused on filling the funnel. So their biggest impact is always going to be on driving demand. We just had an incredible meeting this month where lots of new materials for them to go out and use and educate on. We found a 28% increase in enrollments with physicians that are trained through our physician speaker network and attend a speaker program, for example. So we're increasing our speaker programs. We're increasing the amount of information we can share now that we have 72-week data. And then the patient support materials that we're distributing, including starter kits, are going to be very helpful. So driving enrollments is the name of the game for our sales force. But we don't have just one field team. We also have an access navigator team and a medical science team and a field-based payer team. So they're all working within their channels to also support patients. Our access navigators are kind of our GPT source solution field team that are out making sure patients, um, are engaged and don't discontinue therapy and have the best chance of, um, of starting and staying on therapy. So that's what their focus is on. And we think that with their new materials, they will be able to impact things like abandonment and adherence. So they're very focused on that. And the payer team has done a great job. We're not done there. We've, you know, we, we have 90% coverage, right? Um, And but it's not always perfect. And there's still 10 percent that, you know, that we're not covered in. So they're still very active, engaged with payers. Of course, we're very excited about our next expansion of our labels into pediatrics. And the payer teams can start those conversations early with payers. We're planning for that this year to make sure payers aren't caught off guard with that. And and the payer coverage picture has been very, very good. but we do still have a very active team out there educating payers on a daily basis.

Okay, great. Thank you.

Our next question comes from the line of Matthew Harrison with Morgan Stanley. You may proceed with your question.

Great. Good afternoon. Thanks very much. I guess I just wanted to confirm sort of your underlying assumptions for the demand picture. It sounds like I know you've obviously highlighted a handful of one-time headwinds heading into the first quarter, but it sounds like to overcome them, you expect actually the underlying demand picture to get a bit better for patients, I realize maybe marginally. So could you just comment on that and how you're thinking about that relative to the pandemic over the next sort of two quarters before you think there's a significant pickup in the second half?

Sure, Matt. Thanks for the question. DJ, feel free to add, but I'll start out by saying that the biggest challenge that we've really been up against is sickle cell patients are afraid of getting infected. And the higher the infection rate in the country or in their community, the more likely they are to sequester at home and not even venture out to have an interaction with a prescriber and be able to be prescribed the medication. We think that is going to relax as the infections in the country go down and patients feel it's simply safe to get on mass transit and to get out into the world and interact with people that they obviously don't know and could be people that could infect them. So I think we really don't anticipate that that's gonna change very much in the first half of the year. We're hoping obviously that in the second half of the year, the whole country begins to feel a lot more comfortable about interacting and less concerned about getting COVID.

So that's really the big issue.

Our next question comes from the line of Danielle Brill with Raymond James. You may proceed with your question.

Hi, guys. Thanks for the question. I guess as a follow-up to the last one, You commented in your press release that you expect new prescriptions to improve in the second half of the year and surpass pre-COVID levels over time. Do you still think that you can get back to your pre-COVID levels this year is the first part of the question. And then also just curious now that vaccines are ramping and We're seeing some signs of recovery from the pandemic. If you have any early insights into how things are tracking within the sickle cell community. Thanks.

Thanks, Danielle. I think one of the reasons that we've tried to really restrain ourselves to commenting just one quarter ahead is because we really have no idea what's going to go on with COVID. Every day, you and all of us listen to the news and we hear about new strains We hear about things going on. So we'd really rather not try to get out and predict quarter by quarter. Based on what we're seeing right now, we really don't think we'll be able to do much more than 1,000 enrollments in Q1. As we make progress, Danielle, we definitely will want to give you as much sight into the future as we think we can get. But we just think it's really difficult for us to try to anticipate what's going to happen with Truly, the country getting to 70, 80 percent vaccinated. What's going to happen with these new strains? We don't have enough insight into that to really, really, really predict the future that far out. We do feel very confident that we will get back to and exceed the Q1 performance. But that's really going to be driven by the change in behavior of people related to lack of fear of getting COVID and dying.

Our next question comes from the line of Matthew Holtz with JPMorgan.

You may proceed with your question.

Hey, guys. Thanks for taking my question. So, just a quick one for me. I'm curious if we can get an update on the status of the confirmatory phase three trial for Oxbrita.

Sure. Matthew, it's a great question. I can tell you all these trials that I know of in particularly orphan diseases, are not enrolling. They really aren't enrolling because when patients have a reasonably long survival in front of them, as opposed to somebody who's dying of cancer in the next six months, they're trading off a high risk of dying if they get COVID for a benefit that's less certain, a longer-term benefit. So it's very, very difficult to ask the sickle cell patients to come into hospitals and clinics for blood draws and visits and risk getting COVID. So these trials really are not enrolling. We think that we've been doing a great job, however, of getting the infrastructure up. So for example, we've been spending a lot of time making sure that we're doing remote learning to really educate the sites around the world really well to do high quality TCDs, for example. But we're not trying to get those sites to bring those children in because we really wouldn't want to be responsible for anybody dying of COVID.

Great. That makes sense. Thank you.

Our next question comes from the line of Raju Prasad with William Blair. You may proceed with your question.

Interesting question. Maybe a follow-up on the one that was asked earlier, but given how engaged you are with the sickle cell community, how is the vaccine distribution going with them? Have you noticed any apprehension with taking vaccines with the sickle cell community? And just given what you've learned from the U.S. launch, how are you thinking about the launch into kind of the other age groups as well as EMA in a COVID world? Thanks.

So I'll take the vaccine question. And DJ, you can comment after that. So there is absolutely an issue of vaccine hesitancy in this country and actually around the world based on what I read. And it's probably highest in minority communities. And that relates to a lot of the things that you know as well as I know about historical by the healthcare system. So, that exists. I've been told by some individuals that in major hospitals, the rate of declining the vaccine has been as high as 60, 65% in certain groups. It's not great in any group, but it's been as high as 60, 65%. I do think, however, this could get much better because a lot of this is not necessarily I'm unwilling to take the vaccine. It's I don't want to be the guinea pig. I don't want to be the first one to get it. So many of these individuals may come around to take the vaccine. They just may not want to be in the front group. I can also tell you that we have a hodgepodge of rules around who's even eligible for the vaccine today. And I don't think many sickle cell patients have been even offered the vaccine in California until very recently. So I think it's early days to be conclusive, but your question about vaccine hesitancy, it's a real concern, but it's not just in the sickle cell community, but I would say that it's probably even more acute in communities of color.

Our next question comes from the line of Jim Lee with Tourist Securities. You may proceed with your question.

This is Miguel Correjo, filling in for Jim Lee. Thank you for taking our question. So for the two patients that had one gram increase in hemoglobin but failed to show clinical improvement, is there any other information as to why this happened? And could we expect higher numbers of patients to be added to the clinical improvement analysis based on the tenfold higher numbers of patients you show for the 72-week VOC. And what is the readout from the lentiglobin Bluebird trial pause? Any tailwind for Oxbrita here?

So let me try to touch on your question in a few ways. One is that there's no data showing a correlation between raising hemoglobin and lowering VOCs, with the exception, quite frankly, of Oxbrita. What we've seen with Oxbrita is that the more hemoglobin goes up, the lower the VLC rate goes. But that's never really been seen before. That makes perfect sense to me because the reason the hemoglobin is going up is because you are preventing the primary problem in sickle cell disease, which is the hemolysis, which leads to vascular inflammation, and that leads to VLC. But ordinarily, there has not been a correlation of raising hemoglobin and lowering VOCs, although that is what we've seen with Oxypride. We haven't really quantitated it, but I think if you go and look at the most recent abstracts from ASH, you can see our curves where patients with hemoglobins above 12 actually had very, very low VOC rates. So that was super encouraging. With regard to the broader issue, I would refer you back to other abstracts that we presented at ASH and other major meetings. I would probably go back to ASH, not this past year, but the one before, where we've demonstrated a ton of data that shows the lower your hemoglobin, the worse your outcomes. And it doesn't take very big differences. Differences as small as 0.2, 0.3 grams per deciliter decrease in your hemoglobin significantly increase your risk of multi-organ damage, damage to your kidneys, damage to your brain. We've also demonstrated data that shows that as you raise your hemoglobin, your TCD declines. And we know that TCD is a powerful predictor of your rate of having a CNS infarct or a stroke. So there's a ton of data. I really don't have time to go through it all on this kind of call, but there is a wealth of data that shows that low hemoglobin is a bad thing. And raising the hemoglobin by lowering the rate of red cell destruction due to the disease is very likely to be a benefit. And of course, that was the basis of the accelerated approval in the U.S.

And the results from the Bluebird trial was?

Oh, Bluebirds?

I'm not sure what readout are you asking me about from Bluebird? I mean, I probably am not at liberty to say very much about Bluebird since I don't work for Bluebird.

Yeah, just about the pause in the gene therapy trial due to concerns that gene therapy might cause cancer down the road. I would expect that this would be a positive for Oxbrita targeting the same indication.

Yeah, I think I'd reserve that question for Nick and his team at Bluebird. At Bluebird, they're obviously dealing with a situation. I can just tell you on a personal level, it's been painful for me because our goal has been for patients to have more options and for patients to get great outcomes. So it's been sad to kind of watch some poor outcomes. But I know that Bluebird and the FDA are still working through it, and hopefully they'll get through this in a positive way.

Thank you so much for answering our questions.

Our next question comes from the line of Joe Consasaro with Piper Sandler. You may proceed with your question.

Hey, guys. Thanks so much for taking my questions. I want to follow up on a prior question, but maybe ask it a little bit differently. So, Ted, I think you've said in the past that you need to get back to at least the 1650 new prescriptions you saw in 1Q to see meaningful growth in the business. And I understand it's very difficult to predict that. when you might get back there. But is that still the benchmark that we should keep in mind when we think about returning to meaningful sequential growth?

Yeah, I think if we could get back to those numbers, you would obviously start to see the growth be quite robust. And really the only thing that's different between today and Q1 of last year is COVID. The sickle cell population is big. The vast majority of them, of course, are not on Oxbrita. The big variable here is this pandemic, which has tragically affected their community and has tragically greatly diminished their interactions with healthcare professionals. So we're very bullish that once there's a perception that it's safe to leave your home, these patients will leave their homes, and they'll begin to behave like they were behaving in Q1 of last year. Okay, got it.

Thanks for taking my question.

Our next question comes from the line of John Newman with Canaccord. You may proceed with your question.

Hi, guys. Thanks for taking my question. First question I had was for DJ. DJ, could you tell us the percentage of prescriptions that are heading out to patients via mail order, and is there a way that GBT can sort of encourage that going forward. And also, is it possible to prescribe a larger quantity of drug for a mail order prescription? The second question I have is just kind of a broader question, which is, would there be a time going forward where you would potentially consider maybe some targeted DTC advertising? Perhaps it wouldn't last that long, but it just seems like there haven't It's been such a long time since there have been any therapies for sickle cell disease. I'm just curious if that's an approach that you might consider. Thanks.

Those are great questions for DJ, John.

Yeah, and John, I swear I didn't plant those questions, but they're just exactly perfect because, yes, we have thought about DTC and targeted programs. We have a lot of digital targeted DTC going on right now. a bunch of which we initiated in the second half of last year and through the first half of this year. That includes a lot of social media, you know, really driving people. We've seen a dramatic increase, for example, in web traffic to our websites because of it. So that's one form of DTC. But we're looking at everything. There's lots of very targeted, as you know, media that we can use and look at, whether it be, you know, with the proliferation of streaming television, you can be very targeted and and in a cost-effective way on TV now like you never could before, radio and out of home as well. So we're looking at all that, and stay tuned. I'm sure we'll have more announcements on that later this year. Regarding mail order, yes, 100% actually of our prescriptions are mail order. All of our prescriptions are shipped right to the patient's door, so we don't go through any retail channel. We have a very tight and – small distribution channel that's a closed channel. So we have very tight relationships with our SP partners and all of those bottles get shipped right to the patient's house. Now there is, I guess, a small percentage of patients that can pick it up at their institution if their institution decides to order it through their 340B program. So there's a small percentage of patients that access it that way, but the rest are mail order. And in terms of the quantity of mail order, Yeah, we're happy to do that, but John, that's really controlled by the payer. The payer decides, and usually a payer won't let you ship three bottles of a rare orphan, more expensive specialty drug. So it's highly uncommon for you to get approval to send more than a single bottle. That said, around the beginning of the year, we did contact our patients and make sure that anyone that was switching insurance, we wanted to proactively talk to them about their copay and out-of-pocket so that we could manage that and make sure they wouldn't gap in therapy. So we did ship some models out through our free drug program in advance during the new year to make sure some patients didn't gap there.

Great. Thank you.

Ladies and gentlemen, there are no further questions at this time. I would like to turn the floor back over to management for closing comments.

I'd simply like to close by thanking everyone for joining us today. I want to wish you all to stay healthy and safe. and also encourage you to reach out if you have any additional questions. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your evening.