Pharming Group N.V.

Hello and welcome to today's Farming's Fall Year 2022 results call. My name is Bailey and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Simon De Vries, Chief Executive Officer.

Please go ahead. Thank you very much, Bailey. Good morning or good afternoon, ladies and gentlemen, to our 2022 results call. I would like to start taking you through that, but before I do that, I would like you to pay attention to the next slide, which contains a statement on forward-looking statements. As we may be making forward-looking statements in this conversation, they are statements based upon are expectations and assumptions and involve known and unknown risk and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in these statements. And you can read the rest for yourself, I assume. I'm today here. Next slide, please. I'm joined by my colleagues, Dr. Alan O'Grallon, our chief medical officer, and Jeroen Wackermann, our chief financial officer. And we also have here, although not speaking on the conference, but to answer questions, our Chief Commercial Officer, Steven Torr. And I would now like to start with the next slide, please. And then the next one. So where are we? We have developed over the years a very strong base with potential for significant growth. And that is based upon the commercialized asset RUCNESP, recombinant human C1 esterase inhibitor for the treatment of acute hereditary angioedema attacks, which is commercialized by ourselves on both sides of the ocean, as you can see in a lot of other markets as well outside of the U.S. and the European Union and, of course, the U.K. The potential for growth. is represented here initially by the anticipated approval and a launch for lanioli PI3 kinase delta inhibitor in development on the regulatory review for APDS where we anticipate in the not too distant future the FDA approval and later on during the year the European approval. And we are developed, we have morphed ourselves into a company that is focusing on development and commercialization of rare diseases. And the first thing that goes beyond the APDS indication for laniolisib will be that we are quite far along with investigating laniolisib for additional rare disease indications. We are based in Leiden, the Netherlands, and we are here actually in our US headquarters in Warren, New Jersey, where we speak to you from. And, of course, we are a public company since 1990 in Amsterdam and since 2020 on the NASDAQ. So let's look at our business model on the next slide. We're really on our way to building a sustainable rare disease business, whereas we are now commercializing Brukenest, albeit on both sides of the ocean. The vast majority of sales come from the United States. So we're now a one-product company with one geography. But that's We expect to be changing very soon with the anticipated approval of Lenny Olissen for APDS, which will represent not only a possibility for very significant growth of our US commercial footprint and revenue base, but also a very significant revenue generator outside of the US. So we're looking forward to this year being a transformative year from which we transform from this one product, one geography, company into a multiple products, multiple geographies company. And of course, like I said before, we are quite far on our way and we'll update the market as and when later in the year to actually start additional development programs for laniolisib and additional diseases. And then last but not least, since we have a very scalable commercialization infrastructure in both Europe and in the US, we're actively hunting for additional products. in rare diseases to either in-license, that is our preferred mode of action, and if not otherwise possible, mergers and acquisition transactions to basically bolster that pipeline further and get that flywheel, really get that flywheel going that we have here with our scalable commercialization operations on both sides of the ocean. And in the next slide, you can see the pipeline, and you can see immediately what I mean with that, whereas Ruconest is on the market and Leniolisip very close to the market. And of course, if we start clinical trial programs in secondary indications for Leniolisip, there's still a considerable gap between those two products or those three products in the near future and the preclinical assets that we have in the form of OTL105. the HAE gene therapy, and alpha-glucosidase from our transgenic platform, just like Ruconest for pompous disease. So let's look at Ruconest being the strong foundation under our company. We returned it to growth again after the COVID pandemic. We returned to growth in 2022 as we were guiding single-digit growth over 2021, and that is something we are very proud of. Ruconest was launched at the end of 2014, so it's already quite a mature asset and has found its unique place in the market. It is the only recombinant treatment that targets the root cause of hereditary angioedema by replacing the missing or dysfunctional C1 esterase inhibitor. And over the years, it has proven to be very well tolerated and effective and continues to be a very effective treatment for the treatment of acute hereditary angioedema attacks, including, and that becomes increasingly important, those breakthrough attacks that people suffer from when they use prophylactic treatments. And that is indeed continues to be an issue, but although prophylactic treatments have become, and I'm especially referring to the United States market, of course, where the vast majority of our sales come from. And although the prophylactic treatments have become a lot better, they all have the same issue that up to half of those patients suffer from breakthrough attacks. And breakthrough attacks can come very frequently or very rare, but they come always at a moment that you don't expect it. That's why it is always the case, it is good practice in the United States that when you are in prophylactic treatments, you always have acute medication at hand, at home, to actually inject yourself in the case of Ruconest with the rescue therapy. And that becomes increasingly important. And that is also why we see increasingly that Ruconest is being used by more doctors and used by more patients to actually treat those breakthrough attacks. And it is, we can very proudly say, the second most prescribed product that is detailed for acute attacks. And as you can see here, the efficacy numbers speak for themselves on this slide. and we are finding that our patients feel very, very confident to administer the treatment themselves. It's a slow IV injection and the very vast majority of patients do inject themselves or by their loved ones in the privacy of their own homes. So Ruconest, it has been on the market for a long time and will continue to play a very important role supporting our business with sales, and with important cash flows that enable us to invest in all those future programs that we are embarking on. So with that said, I would like to now switch over to the promise for significant growth of the company in the very near future. Lenny Olisip for APDS, and I would like to hand over to Dr. Anurag Rallon, who sits here next to me, to take you through the story of APDS and Lenny Olisip.

Anurag, over to you. Thank you, Simon. In the next few slides, what I'd like to do is review some information that we have on our understanding of the condition APDS, our understanding of the patient journey, and what we've done in terms of developing laniolisib for APDS, and then using all of this information to help identify patients. And then lastly, provide an update on where we are in terms of regulatory status. So on the next slide, we can see a schematic here of how this genetic defect in one of these two genes leads to this hyperactivity of this pathway. You can see that within the cell there on the left. And that hyperactive pathway then leads to this dysregulated B and T cell development. So these key components of the immune system do not develop properly. And as a result of not developing properly, patients suffer from a number of symptoms and conditions that you can see on the right. Most prominently, these patients develop recurrent infections. They also, because of this abnormal development of their immune system, have what's called lymphoproliferation. So they get swollen lymph nodes. Their spleen is enlarged. They have problems with expansion of lymphoid tissue, especially in the gut, and that can lead to a condition called enteropathy. And not only do these immune system cells not fight infection, they actually lead to the opposite problem where they lead to a condition called autoimmunity. And this can lead to autoimmune anemias and cytopenias and other autoimmune disorders. But it's also important to note that APDS is a progressive condition. So over time, the disease worsens. And many of these patients, even at a young age, develop a condition called bronchiectasis, which is essentially scarring in the lungs that is irreversible. And many of these patients, unfortunately, go on to develop lymphoma, again, due to this unchecked lymph proliferation and this abnormal development of their immune system. On the next slide, we can actually see what the consequences of this are on the patient themselves. Of course, we've talked about the physical consequences of recurrent infections. I mentioned bronchiectasis, and that can result in shortness of breath, coughing. just difficulty to do their normal activities. And you can see that that can impact their social wellbeing and as well as their mental wellbeing, but there's a significant treatment burden. These patients are frequently hospitalized. They have numerous surgeries, many of them unnecessary, especially when they've not been properly diagnosed, numerous doctor visits. So it's a condition that impacts many facets of these patients' lives. On the next slide, we see what's possible now in the current management of APDS. And that's really trying to address the consequences of the condition. So not addressing the root cause, but trying to address the symptoms. So what the symptoms of the manifestations are infections. So these patients are frequently on antibiotics, either prophylactically or to treat their infections. Most of these patients are on immune globulin replacement therapy. And then again, on the flip side, when they have autoimmune complications or immune dysregulatory complications, They're put on steroids, other immunosuppressants, or a class of drugs called mTOR inhibitors to try to modulate their immune system. None of these therapies, of course, are FDA approved for this specific treatment of APDFs. And again, the worst condition, worst possible outcome for these patients is that they need a stem cell transplant. And unfortunately, even stem cell transplants, although potentially curative, have significant morbidity and mortality associated with them. On the next slide, we can see the future now and what we're developing is Leniolisib, which is a targeted disease-modifying treatment for APDS. And Leniolisib specifically blocks the PI3K pathway and thereby modulating and trying to return to normal the activity in this pathway. A consequence then of that should be that we can actually develop the immune system properly and then again impact all the other things that are the downstream effects of that abnormal immune system development. And we've gone on to study that together with Novartis, and you can see in the next slide the overall clinical development plan, which includes a number of studies, dose-finding studies, a placebo-controlled study, and at the bottom, a long-term extension study. There are patients now in that long-term extension study that have been treated for a number of years, several patients over five years, one patient who's been in the study now for seven years. So we have extensive data on the use of Laniolus, both in a long-term perspective, but also in a placebo-controlled fashion. And in the next slide, we can see some of those results. We see that the randomized control study met both primary outcomes, which was, number one, to increase the number of naive B cells. Again, these are B cells that were not developing properly as a result of that underlying disease. hyperactive pathway. We were also able to achieve decreased lymphadenopathy. Again, this was a primary manifestation of APDS. On top of that, when we look over in the randomized study, as well as over longer periods of time, these patients' spleen size shrinks. We see improvements in those autoimmune complications. We see in general that the drug was also well tolerated. In the data package that we submitted to FDA, for example, we have a median exposure of of two years for the patient population. On top of that, when we start looking at the longer term outcomes, we see that these patients are getting less infections and they're using less immunoglobulin replacement therapies. So despite using less of the therapies that needed to control infections, they're actually getting less infections. So it's actually very nice to see how impacting that pathway can impact the immune system and then can actually have an impact on all of these clinically relevant endpoints in terms of infections and also reduction of immune-globulin replacement therapy. On the next slide, we can see where we are now in terms of safety. And what we see when we look at the randomized controlled trial data is a comparison of laniolisib on the left with placebo on the right, and you see a very similar profile in terms of the grade of adverse events that were experienced by these patients. And that mimics what we see in the long-term extension data. So, in general, lineals has been well-tolerated. And again, as I mentioned earlier, we have some patients on the therapy in the study for several years now. On the next slide, we can see the activities that we've been conducting to help find patients. And there's a number of activities as we begin to understand the disease and this patient journey that help us inform how to go about finding these patients. We, again, estimate that based on a prevalence of one to two per million, there's more than 1,500 patients in the key markets where we intend to commercialize laniolisib first. We've already identified 500 patients in these markets. Much of this has been done through a partnership with Invitae, which involves a genetic testing program that is at no cost to patients that can make a definitive diagnosis for these patients. We also have a number of partnerships with medical organizations, patient organizations, and these are critical in helping us to uncover these patients who have this rare primary immune deficiency. And we've received tremendous support in these partnerships. Again, these patient organizations who are who really have the same goal that we do, which is to help improve the lives of these patients with these rare and ultra-rare diseases. On the next slide, we can see where we are now with our regulatory status. As Simon mentioned, we have filed in the US. It's under review with a priority review designation for patients who are enrolled in the in the programs that I described, which were adults and adolescents age 12 and over. We also have an ICD-10 code in place, and we have a number of physicians already using that code. So that's also nice to see. And we have coming up at the end of this month, the expected decision from FDA on the 29th of March. And we expect that later this year, still in the second quarter of this year, we expect to be able to commercialize pending a positive decision from it. In Europe, we've also filed an application there. We also have a positive designation on our pediatric investigation plan, which, of course, is necessary to begin the filing process. We originally received accelerated assessment. This has now been switched to a standard assessment as EMA have requested additional data. We still, however, anticipate that CHMP will be able to provide an opinion later this year, in the second half of this year, with an approval to follow approximately two months later. And with the UK regulators, we expect to be able to file soon after the CHMP. And on the next slide, you can see this over time, some of the key anticipated milestones. Earlier this year, we were able to begin the first of two pediatric studies. And again, we have FDA regulatory decision coming later this month with the U.S. commercial launch soon after that. We're also going to be getting a new study in Japan, and we expect that to also occur in the first half of this year. And as I mentioned earlier, we're expecting a CHMP opinion as well as a UK filing in the second half of this year.

And I will now...

I'll turn it over to my colleague Jeroen Walker, our CFO.

Thank you very much, Anurag. So the financial highlights for 2022 versus last year related to the P&L. To start off with, our sales grew by 3.4% in 2022 to $205.6 million, and in Q4, Sales were 54.6 million, also a growth of 3% in line with the single digit growth guidance that we've given throughout the year. Gross profit increased from 178 million to 188.1 million. That's an increase of 5.8%, and therefore we improved our gross margin. an increase of 10.5%, and the operating profit grew to 18.2 million, which is an increase from last year of 34.5 million. The net profit decreased from 16 to 13.7 million in 2022, which is a decline of 14.5%. In the next few slides, I'm going to give you a bit more color and detail on the results on what happened. So next slide, please. The overall message is that we grew our sales, and we also grew our investments in the launch and the preparation of the launch in Lennie Ellesip. Revenue grew to 205.6, and that was supported by a price increase, which was well below the CPI level. but also an increase in the number of doctors prescribing recognized and an increase in the number of patients. Regional split is that we had a growth in the US of 3% and the EU sales were flat over the two years. And moving to gross profit, gross profit increased and that was amongst others, obviously by the sales growth, but also by the improvement in gross margin from 89% to 91%. And that was driven by favorable production results, but also an impairment on the inventory in 2021 of 2 million that we didn't need to take this year. The other income is you see a sharp increase from 2.6 million to 14.5 million And that includes the transaction that we did with Bioconnection, our fill and finish partner, in which in Q2 we reduced our minority stake from 44% to 23%, and we had a gain on disposal of 12.2 million. The remainder of that other income is mainly grants that we receive in the Netherlands on research and development. The operating costs increased from $166.8 million to $184 million. And you see that overall the costs were flat on a like-for-like basis, so to say. And you see the growth in Lani Elisip out-of-pocket expenses. So we consider out-of-pocket expenses mainly third-party providers. And that almost doubled from $18 million to $34 million. Please be reminded that in that normal operating cost, there are also Laniolisib costs. For example, the 25 disease educators for Laniolisib that started on the 1st of August last year. So the overall cost for Laniolisib increased more than what you see here. Going to the course category development, R&D in this picture declined, but I'd like to remind you that last year we had a one-off impact of 18.5 million, so we deduct that from the 70 million to come to a like-for-like number. That one-off was related to OTR 105, the collaboration agreement with Orchard Therapeutics. and also an impairment on intangible assets. So on a like-for-like basis, the R&D costs were largely flat. G&A costs, we increased, and that was mainly because of payroll and IT costs, just to strengthen the backbone of the organization with the growth that we foresee in the near future. And we see a growth in marketing and sales costs. 26 million up from 59 million to 86 million almost, and that was mainly in laniolisib and mainly in categories like marketing and market access development. The operating profits increased from 13.6 to 18.2, and that's the effect of the increase in the gross profits, the bioconnection gain on disposal, and offset by the higher cost from our investments in the Lenny Elisip launch preparation. The net profit reduced, and that is mainly because of the financial results that reduced from 8.8 last year to minus 2.2, and that is mainly foreign exchange driven. And moving on to the next slide, where you can see in a different way what happened to the profit before tax. Last year it was 23.1 million. We had some one-off costs in 2021, again, due to LTL 105 and some impairments. So you could argue that the like-for-like profit before tax last year was 43.1 million. So what happened in 2022 starting from that base? We grew the gross profit by 10.3 million. As I said, the R&D expenditure was relatively flat. although within that pot, there were quite some changes. So we increased the investment in Leniolosib, we increased the investment in OTL 105, we had more costs for AKI and CATL, the program that we have stopped by now, so that will reduce in 2023, and we reduced the cost in 2022 on POMPA and on the COVID R&D. So, a mix of things, and I think a good reflection of our strategic intent. The increased G&A expenditure was mainly, as I said, because of payroll, additional people, and IT costs, and the marketing and sales was largely driven by Lenny Elisip. See, again, the bioconnection transaction results and a decrease in the financial results. And hence, we come to a profit before tax of 15 million in 2022. Not on this slide, but important for those who are modeling, you will see that we have a low tax rate, low effective tax rate in 2022. It was only 9% versus 31% the year before, so that's very positive. And the reason for that is that the gain on disposal on the bioconnection transaction was tax exempt. Then the cash flow development on the next slide, please. We started off the year with 192 million of cash. The operational cash flow was plus 22.9 with working capital almost flat during the year, so no cash outflow. The investment cash flow was largely related to two items, capex in both PP&E and software, but very limited. It was only 2 million in total, and cash from the cash, incoming cash from the bioconnection transaction. The cash flow from financing activities was largely related to interest on the convertible and some regular lease costs. We had negative exchange rate effects on the cash, and we ended up with a cash and cash equivalent balance 50 million more than we started the year with at 207.3, finishing the year at 207.3. And we can confirm that we have full access to all of this cash, all our cash deposits. Then on the next slide, the outlook for 2023. We continue to see low single-digit growth for recognized revenues. The key event for 2023 is obviously the developments on online ELACIP. So we expect a US FDA approval in the first quarter. In fact, it's 13 days from now. The PDUFA date is the 29th of March and the US launch and commercialization will start shortly after it in the first half of this year. For the EU, we expect a positive CHMP opinion from EMA in the second half of this year and a marketing authorization for Europe that will follow two months later. For the UK, we will file afterwards after the EU approval with the UK's MHRA following the European Commission decision reliance procedure. To accelerate future growth, our investments, mainly in LaniolaSIP, will continue to impact profits in 2023, as you have seen in the previous slides that I've showed. And we're working hard on lifecycle management for LaniolaSIP, so the new indications besides for APDS. And further details on our plans to develop LaniolaSIP in additional indications will be provided in the second half of this year. And as Simon said, we continue to look for potential in licensing and acquisition opportunities and focusing on late stage developments and assets in rare diseases. So overall, we've had a good year. We've had sales growth. We have had an increase in operating profit. We've had good cash generation and cash in excess of $200 million. And we are 13 days away from the laniolisid PDUFA date. With that, I would like to go to the next slide and open up for Q&A with my colleagues, Simon de Vries, Anurag Moran, and also our CCO, Steven Thor. Thank you very much.

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from the line of Julia Hernandez from Kempen. Please go ahead. Your line is now open.

Thank you for taking my question. I just have two questions. The first one on lanyosinib. So you have identified now more than 500 patients with a confirmed APDS diagnosis. Can you comment on what a realistic target is for the number of patients that you can identify and can receive lanyosinib once approved? And could you also provide an update on your reimbursement discussion? Thank you.

And this is the first part of the question. On the potential numbers. I think you're referring to the label is now 12 and upwards, right? So we've started our first pediatric trial and I'm looking here at Anorak. I think it's about 25% of patients are below 12 years of age. So they would initially not qualify for treatment until such time that we have the pediatric approval in our hands. Furthermore, I think all of the other APS patients We have not seen so far APDS patients that would not qualify for treatment because the diagnosis is made by this genetic test, and that's basically a yes or no answer.

It's pretty clear in that respect. And there's a small number of patients, of course, that have already been transplanted, some of those successfully, so those also would not qualify. But again, the vast majority of the other patients that Simon mentioned would potentially be eligible for treatment.

And then with regards to your second question about reimbursement, obviously these discussions are relevant for outside of the U.S. Those have not started because we're not approved yet. And in Europe, normally speaking, those discussions start after you have the approval for the product. In the United States, we will be bringing LenioliSIP to the market. as soon as possible after the due for date. And we'll, of course, inform the market about the pricing in the United States as and when.

Okay, thank you. And then just one more question. Yes, thank you. And just one more question. When can we expect to see additional assets entering your pipeline via internal projects or in licensing acquisitions? next to a second indication for lineosolib or your gene therapy candidate?

Yeah, so basically, you know, the secondary indications for lineosolib, second half of this year, we'll be informing the market about that. And with regards to in-licensing and acquisitions, we're very active. We have a small but very efficient business development group turning over a lot of incoming assets that we get offered slash that we find. ourselves. We've had evaluation in several stages. We've done a few due diligence even over the last year. And of course, you know, as you can see, nothing has resulted in a deal. So until such time, you know, we keep working, beavering away at it and trying to find those assets that fit our portfolio. And we're really looking for serious rare diseases. I think laniology is a very good case in point where We are very comfortable to take a phase three risk, because we only could look at the first cohort of patients that had to undergo the dose finding study, and the phase three study was ongoing. We're very comfortable with that, provided that we have a good clinical proof of concept in our hands when we actually start to engage with the asset. A preferred mode, obviously, for this is in-licensing, as we are still a relatively small company. And, of course, an in-licensing transaction is much easier to handle than mergers and acquisitions, especially, of course, when you are launching a product like Leniolisip that we do with Leniolisip this year, which requires a lot of our focus. Does that answer your question, Cecilia?

Yes, that's clear. Thank you.

Thank you. Thank you. The next question today comes from the line of Joe Panguinis from HC Wainwright. Please go ahead. Your line is now open.

Hey, guys. Thanks for taking the question. So just looking at some of the internal workings of the company and the decisions that you're making, I've been covering you guys for a while, so now I've been also sort of BC and AC, before cattle and after cattle. Sorry for the bad joke. So with that said, I guess I wanted to get into the continuum of that decision where, you know, obviously you needed that potential capacity to as Rukinest was looking to expand into preeclampsia and AKI. So I'm just wondering what percentage of your decision factored into sort of the projected needs for Rukinest in HAE versus your ability to expand your current rabbit populations for any needs.

Yeah. Yeah. Thanks, Joe. So the answer to that is that there is more than sufficient production capacity, manufacturing capacity in the Revit platform to serve air terrier and geodema, and even has significant growth possibilities. It is a very flexible system. It takes a while to upscale, but it is a very flexible system, and it is a very flexible manufacturing process. It takes also a while. And it's a complex manufacturing system, but it is really, has the capacity to actually deliver a lot more products than we currently deliver. So if we were to get a significant increase in market share in Heritage Ujima, we could actually master that.

That's great. And then just a curiosity with cattle, is there any potential here to monetize the platform that you already have in place?

No. Unfortunately, we came to the conclusion that there's no significant increase possibility to actually monetize that. And therefore, we have halted all the activities there. It's a different product, right?

Yep, absolutely. And I guess for your own, you know, obviously, you said, you know, profits might be impacted further based on further investments in linear LICIB. So I'm just curious how much of that is you know, the new indications that you'll give visibility on for the second half of this year versus, you know, where do you stand with regard to right-sizing the marketing and sales costs and investments that you still might have to do?

Yeah, no, exactly. We expect that the marketing and sales costs for Laniolosub will further increase in 2023, Joe. And that's just to support the launch in the EU and in the U.S., obviously. On the lifecycle management, we hope to start with a clinical trial, for example, by the end of this year, but it will depend on the design of the trial, how much money we need to put into that. And probably for 2023, that impact will be fairly limited because if it happens, it would be towards the end of this year anyway. So the impact of that would be more in 2024 than in 2023. But we foresee an increase again in the marketing and sales cost for Lenny Ellison.

Got it. Thanks a lot, guys.

Good job. Thank you. The next question today comes from the line of Hartaj Singh from Oppenheimer. Please go ahead. Your line is now open.

Great. Thank you. And thanks for the questions. Really nice update. We missed you all at our healthcare conference, but glad to hear your voices over the phone today. So, you know, maybe just talk a little bit about the 500 patients. There's a question before. I just want to build on that a little bit. You've estimated about 1,500 patients as your market opportunity. You know, you've already identified 500. You know, how do you think, Simon, off just the overall opportunity sort of, you know, the incident patient and the prevalent patient? I mean, do you think that that 1500 is now a reasonable figure, or do you think it could be larger? And I just had a question, a follow-up question.

You want to? Sure. So we've, you know, when we look at the prevalence, and we have good data, for example, in some European countries, if we take France, for instance, where there's already 60 patients identified in a country that's a population that's about 60 million. So we know the minimum prevalence, again, really without our involvement and without a therapy being available, is about one per million. So we've conservatively estimated about one to two per million in terms of the prevalence, and that's where that 1,500 number comes from. Now, as we've been out there talking about the condition, obviously we're finding more and more patients, including in places like France and across Europe, as well as in the U.S. So that number we expect to continue to increase. I think a big driver also of diagnosis, though, is the availability of a potential therapy, a targeted therapy. So I think as, and hopefully we can have a therapy available for these patients soon, But once such a therapy is available, I think that will drive even further diagnosis. I think we're fairly right now with the estimates that we're providing in terms of the prevalence. But certainly, you know, I don't think it would surprise any of us if the numbers were significantly higher.

Yeah, that makes sense. I mean, just from being at ASH and talking to physicians and whatnot, that's our sense also in doing our call checks. You know, just another question. Got to ask you a regulatory question. I know you're very close to the approval, but just where are you in terms of, you know, any FDA audits or facility inspections? And, you know, have you already had the labeling discussions or not? And thanks for all the questions.

Sure. I can't comment on any specifics other than to say we're engaged in regular contact with FDA, and that contact includes the routine types of things, including inspections, audits, as well as labeling discussions that are occurring.

Great. Thank you, everyone. Good luck, and we'll talk soon.

Bye-bye. Thank you, Eric. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from the line of Christian Glennie from Stiefel. Please go ahead. Your line is now open.

Hi, good afternoon, guys. Thanks for taking the question. First question on, let's start with Rukin S, just to get an idea about the 3% growth last year in the U.S., the price versus the volume mix in terms of what was driving that and what your expectations are for 2023?

Yeah, we stated that we took a price decrease below the CPI. That's our normal modus operandi, or has been our normal modus operandi over the years. So I think the price increase, of course, is the biggest driver of this growth. So you could say that the underlying volume growth is more or less flat to slightly maybe going up or down, and there's some quarterly fluctuations there as well. But I think that's how you should see that. So it means that Leukinus continues to basically be prescribed by a wider audience of physicians. We think that's important. As I was saying in my earlier part of the presentation, also used by more patients and used by more prescribers, reflecting the fact that there is a continued need for this product in terms of especially the breakthrough attacks that continue to occur under all the prophylactic treatments that are available on the market. And yes, some of them have improved significantly from the past, but no, patients will always need and always have acute treatment at hand to be treating that unexpected breakthrough attack. Do not forget this is a stress-related disease, and people can be very nastily surprised by breakthrough attacks. Does that answer your question, Christian?

Yeah, thanks, and pretty much some similar outlook then for 23 in terms of that price. Yeah. Okay, and then non-linear listed then, couple here. So just on the 500 patients, you've already said, yeah, about 25% under the 12 years. But what's the rough subsplit of the 500 in terms of the US and Europe?

Stephen, would you like to comment on that?

I would. Maybe I can take that one. So I think they're about equally distributed. Yeah. Yeah. Now, we have begun to check. Yeah, so I will also comment that a lot of the work that was done in finding patients was actually initiated in Europe through this group called the European Society for Immune Deficiencies. So they have done a lot of the work. And in the U.S., there wasn't such a coordinated effort. So we're a little bit behind in terms of the process. But we're quickly catching up, I think, in the U.S., in terms of disease state education and finding patients.

So it's fair to say that Europe had a head start, right, on this whole thing. Exactly. But we're getting there in the U.S.

Sorry, but just to clarify, I thought, is the 500 just Europe and U.S., or I think it included some other markets maybe, or not?

No, it does include other markets. I was saying that if we look just at the U.S. and Europe alone, they're about an equal number.

There's more than five on there by now, right?

Yes. Okay.

And then on the EMA side, obviously, you had the initial shift from accelerated to standard review. The way you described at the time was obviously further, you know, data from the open label extension. Is that, you know, subsequent interaction with the AMA, is that still the case? I mean, is anything additional thrown up there?

There's been no change there. We're collecting that additional year of data and intend to provide it to EMA in our responses, and we're still expecting an opinion from the CHMP in the second half of this year. Okay, thank you.

And finally, if I may, in terms of, thinking about a bit on the modeling side. I mean, obviously the nature of the agreement with Novartis is probably confidential, but an idea of the potential milestones that might be applicable to Novartis on FDA approval and to what extent that might actually be offset by them exercising the option on the priority review voucher that they should get. Just a bit of any insight you can give us there would be helpful.

Yeah, happy to do that and give you some guidance. I think for modeling purposes, it's probably a pretty neutral operation.

Okay, so the PRV might offset the mass time, yeah, okay. Along those lines. Thank you. Okay. Thank you.

There are no additional questions waiting at this time, so I'd like to pass the conference back over to Simon De Vries for any closing remarks. Please go ahead.

Thank you very much. Yes, ladies and gentlemen, as we were referring to, we had a very good year, 2022. We laid a very good base for transferring our company from the one product, one geography company into two products, multiple geography company. We believe that Leniolisip has a very significant commercial potential. significantly larger than the Reconest franchise. And, of course, we're very proud what we have achieved and continue to achieve with Reconest, which is, of course, a very strong supporter and foundation and cash flow generator going forward. And we believe also that the high hurdle to entry, the complex manufacturing, of the recombinant C1S trace inhibitor by means of our transgenic platform. Will therefore mean that there will be for the significant period going forward, RUCNES will continue to create those, generate those cash flows that enable us to invest in all these plans, including laniolus secondary indications and also in licensing of additional assets. to actually start launching products on a very regular basis going forward. Because the other nice thing is we are having a very nice and scalable commercialization operations on both sides of the ocean. And therefore we can easily handle additional assets for commercialization over the coming years. So we look forward to catching up with you later in the year when we have the next set of results available and continue to embark on our journey into 2022, the important transformative year for the company. Thank you very much for attending this conference. And like I said, we look forward to updating you on the next occasion. Goodbye.