Travere Therapeutics, Inc.

Good day and welcome to the Travere Therapeutics Third Quarter 2023 Financial Results and Corporate Update Conference Call. Today's conference call is being recorded. At this time, I'd like to turn the conference over to the Vice President of Investor Relations, Naomi Eichenbaum. Please go ahead, Naomi.

Thank you. Good afternoon and welcome to Travere Therapeutics Third Quarter 2023 Financial Results and Corporate Update Call. Thank you all for joining. Today's call will be led by our Chief Executive Officer, Dr. Eric Dubé. Eric will be joined in the prepared remarks by Dr. Jule Enrig, our Chief Medical Officer, Peter Herma, our Chief Commercial Officer, and Chris Klein, our Chief Financial Officer. Dr. Bill Root, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation and Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statements disclaimer on the company's press release issued earlier today as well as the risk factors section in our Forms 10-Q and 10-K filed with the SBC. In addition, any forward-looking statements represent our views only as of the date such statements are made, November 7, 2023, and Travere specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Naomi, and good afternoon, everyone. During the third quarter, we executed our key corporate priorities to further strengthen our leadership position in the rare disease community. Notably, during the quarter, we made progress with our launch of Filspari and IGAN and reported two-year data from the PROTECT study that we believe will position Filspari to play an important foundational role in the IGAN treatment landscape. Additionally, we completed a successful end of phase two meeting for our PEG-debatinase program putting us on track for the phase three study initiation of PEG to betonase by year end. And we completed the divestiture of the bile acid product portfolio, enabling us to further focus on our key priorities. Regarding the ongoing launch of Philspari, we continued to execute our strategy for Philspari to become a new foundational treatment in IGAN. In the third quarter, we helped to reach even more patients. And every week we hear stories from physicians and patients of how well PhilSparry is working for them. Over the course of a quarter, we identified that additional patient education and support could improve the performance of the launch, specifically in onboarding new patients after a patient start form has been submitted, and we quickly adjusted. Notably, we are seeing early positive trends from these adjustments through October, and Peter will provide additional details shortly. Overall, we have built a solid foundation of physician demand, with growth in new patient start forms and payer coverage. And together with the initial signs of a positive impact from our enhancements in the quarter, we have confidence in the successful future of the TIL SPARI launch. We are just returning from ASN Kidney Week, the largest nephrology congress of the year. It was truly exciting and humbling to have both of our phase three studies of sparsentin in IGAN and FSGS presented as late breaker oral presentations and published simultaneously in the Lancet and New England Journal of Medicine, world-renowned peer-reviewed scientific journals. Key opinion leaders who were at the Congress spoke positively about these groundbreaking results and recognized the role of sparsentin in providing deep and durable reductions in proteinuria and kidney function preservation compared to an active comparator for patients with IGAN and FSGS. This, in conjunction with the Lancet publication on the PROTECT study, should further lay the groundwork for potential inclusion into KDGO guidelines for IGAN and should enable SILSFARI to become a new foundational therapy for this disease. Consistent with previous guidance regarding our U.S. regulatory engagements, we remain on track to provide updates for both FSGS and IGAN this quarter. In parallel, our team is compiling the Supplemental New Drug Application, or SNDA, for IGAN. so that we're in a position to submit in the first half of 2024 for full approval in the U.S. In Europe, the Conditional Marketing Authorization Evaluation for sparseness in the NIGAN is progressing. Together with our partner CSLB4, we continue to anticipate a review opinion around year-end for the CHMP. Regarding our exciting PEG to BATNAGE program, we are on track for an expected Phase III study initiation by year-end. In late October, FDA hosted a patient-focused drug development panel on classical HCU. We are grateful for the HCU patients and their caregivers for sharing their stories about living with HCU. The need for better therapies, the ability to improve diet, and improve testing was incredibly clear, and we feel the sense of urgency to execute our phase three program. Our confidence and the potential For PEG-2-Batinase to become the first and only disease-modifying therapy for people living with classical HCU continues to grow, and we're looking forward to sharing additional updates on the program in the near term. Lastly, during the quarter, we completed the sales of bioasset portfolio to Merum Pharmaceuticals. This transaction further strengthens our balance sheet and our focus on our key priorities of achieving success with Tilspari and advancing PEG-2-Batinase into Phase III. Let me now turn the call over to Jula for a clinical update. Jula?

Thank you, Eric, and good afternoon, everyone. Before walking through our recent data presentations at ASN Kidney Week, I'd like to recognize and thank our internal teams and external collaborators. Their significant efforts led to us achieving an impactful ASN Kidney Week and world-renowned peer-reviewed publication of both duplex and protect in a very short period of time. This rapid dissemination of data will help educate nephrologists on the strong clinical profile of filspari and expeditiously provide the published data required for inclusion in clinical practice guidelines, such as an up-to-date NKDIGO. We are empowered by the data shared in the 11 ASN abstract including two high-impact late-breaker oral presentations with simultaneous publications on the phase three studies of sparsentan and IGAN and FSGS. Dr. Rovan, a globally recognized rare kidney disease expert, presented our late-breaking phase three PROTECT study data that demonstrated the significant effect of Filspari in slowing disease progression in IgA nephropathy. These results were met with broad support by the nephrology community and provides us with increasing confidence in Philspari's prospective position as a foundational treatment in IgA nephropathy. Simultaneously published in the Lancet, these data demonstrate that long-term treatment with Philspari has the potential to preserve kidney function and thereby significantly delay the time to kidney failure. Faced with limited safe, effective, and approved therapies without significant side effects for IGAN patients, this represents a significant medical advance. Let me highlight select data from the presentation and publication. Treatment with Silspari provided patients with an absolute 3.7 mils per minute higher EGFR at two years versus erbisartan. This in conjunction with the minus 2.7 and minus 2.9 mils per minute per year chronic and total EGFR slope respectively tells us that treatment with Vilspari can provide patients with meaningfully slower rates of kidney function decline. particularly when compared to historical or recent phase III IGAN trials. Additionally, these treatment effects on EGFR slope were consistent across baseline EGFR and proteinuria, supporting the potential for Filspare as a foundational treatment across different stages of kidney disease. Treatment with Filspare demonstrated lower rates of the composite kidney failure endpoint, a 40% decline in EGFR, kidney failure or death compared to erbisartan. Filspari resulted in a significant reduction in proteinuria and higher rates of complete remission compared to erbisartan. And the reduction in proteinuria with filspari was durable over the two-year study. The safety profile of sparsentin was consistent across all clinical trials conducted to date and comparable to erbisartan. Importantly, with no drug-induced liver injury and no safety concerns related to fluid overload. We also presented important new data at ASN that we believe help further build understanding and confidence in the clinical profile of sparsentin. These include the SPARTAN study, which is evaluating sparsentin in newly diagnosed RAS-naive IGAN patients. Initial results to date indicate treatment with sparsentin was well-tolerated, and we've seen an approximately 80% reduction in proteinuria over 36 weeks and with minimal to no change in kidney function. In the ongoing PROTECT open-label extension, when SGLT2 inhibitors are added to stable filspari treatment, the combination has been well-tolerated with a consistent safety profile and showed incremental proteinuria reduction benefits. These data strengthen the growing body of evidence that sets spilspari apart from standard of care in IGAN, suggesting early initial treatment with spilspari therapy alone or in combination with other medications has the potential to preserve kidney function, with this benefit accruing over time in patients with IGAN. Looking to next steps in IgA nephropathy, we believe these data from PROTECT should support an SNDA for traditional approval, potentially with label expansion to reflect the broader population and long-term benefits of Vilspari. Also at ASN, Dr. Rowe, a leading rare kidney disease expert, presented the full phase three duplex study results in a late-breaker oral session that was also simultaneously published in the New England Journal of Medicine. The broader results show a consistent and durable effect of sparsentin on reducing proteinuria, greater rates of complete remission, positive trends on EGFR, including fewer sparsentin-treated patients reaching the kidney composite endpoint, including kidney failure, as compared to erbisartan. While the duplex study didn't meet statistical significance on the EGFR endpoint, the totality of data continued to build on our previously announced clinically meaningful results and showed a consistent and a well-tolerated safety profile. With no FDA-approved medicines indicated for FSGS and a growing incidence, the unmet need in FSGS is incredibly high. We remain on track to provide an update on our regulatory discussions this quarter. Shifting to PEG-tobatinase for the treatment of classical homocystinuria, or HCU, we made advancements on our clinical and regulatory objectives. At the leading International Metabolic Conference, or SSIEM, we presented additional data from the Phase I-II Compose Study that showed that PEG-tobatinase provides a clinically meaningful reduction in total homocysteine of 67.1%. and that the treatment effect was consistent across patients. One patient achieved normalization of total homocysteine to less than 15. This threshold allowed for increased dietary protein, which can significantly enhance quality of life for patients who are otherwise on highly restrictive low protein diets. Additionally, our teams had the opportunity to engage with global HCU thought leaders who are eagerly anticipating the study initiation. We've recently completed a successful end of phase two meeting with the FDA, and final preparations are underway in anticipation of a pivotal phase three study initiation by year end. At that point, we will also look forward to sharing the key study design elements. With that, I'll turn the call over to Peter.

Thank you, Joanne, and good afternoon, everyone. We continue to make sound progress in establishing the commercial fundamentals for field sparring to achieve our ambition of making it a new foundational therapy for IgA nephropathy patients at risk of rapid progression. Since the beginning of the launch in February, we have engaged with over 5,600 nephrologists who are becoming increasingly knowledgeable on the promising clinical profile of field sparring. These face-to-face interactions have resulted in new prescribers and additional uses within practices. Physician demand continues to increase, and in the third quarter, we have 430 new patient start forms. This represents nearly 1,000 patient start forms since the initiation of the launch. This speaks to the confidence nephrologists have in the clinical profile of FESPARI and how they are using it to help reduce their patients' proteinuria. Notably, this patient start-form growth occurs even with the slower summer season, when fewer patients typically visit physicians, as is common dynamic observed in benchmark launches, and we observed growth following the summer months. As you heard from Zula, 13 of medical science reassurance have received positive feedback from the recent two-year results from the PROPECT study, and that is consistent with our market research. In fact, recent market research conducted after the top-line press release of the PROPECT two-year data analysis shows that after reviewing the two-year data, a significant number of nephrologists that prescribe Cholstarine expect to increase their utilization, and 60 percent of surveyed nephrologists that do not yet have the prescribed experience indicate a plan to prescribe Chospari in the next three months based on this new data. The pathologists also mentioned that they are encouraged by the rapid and sustained proteinuria reduction and that the EGFR results indicate a clinically meaningful long-term benefit on kidney function and delay in disease progression. The market research also indicates that a two-year safety profile could provide confidence for physicians furthering their intent to prescribe. This feedback gives us confidence that we will continue to see growing demand through the balance of the year and into 2024. During the quarter, we also continued our progress in payer engagement, with 67% of the U.S. lives covered by the end of Q3. Importantly, we nearly doubled our Philzpari-specific formularies. from 50 by the end of the second quarter to more than 90 by the end of Q3. And we continue to be very pleased with the quality of these specific formularies and authorization criteria. From a revenue perspective, we reported still sparring net sales of 8 million for the third quarter. We are beginning to see the expected upward inflection in revenue, but it is not yet closely matching demand seen from patients' court forms. The main component of this is that there is a segment of patients who, without increased education and support on the ramps, either have not yet initiated therapy or have taken longer to receive their first shipment. Importantly, our teams recognize the need for additional patient education and support in the fulfillment process for this segment of patients, and we adjusted quickly during the quarter. We enacted targeted approaches to enhance communication and increase patient support, including physician guidance materials for their conversations with patients that are candidates for self-suffering. We provided educational, patient-friendly communication materials in print and online, and additional patient support through TREVIA Total Cares nurse educators to walk patients through the REMS certification process. Notably, we are seeing early signs that these efforts on providing additional support for this segment of patients are working. Both the number of patients completing their RAMP certification shortly after receiving a patient start form and patients initiating state therapy have been increasing. As we discussed on our approval call in February, your storage launch would be a rolling one. that unfolds over the first nine to 12 months, punctuated by important milestones, such as the two-year data and peer-reviewed publications. Looking ahead, we see further growth opportunity with the growing body of sparse symptom evidence, and in combination with SDLT2. The potential inclusion in prescribing guidelines, such as Cadego, to be updated next year, and most importantly, the planned submission of an SMBA for the full approval of TIL-SPARI and IGAM in the U.S. Too close. We have great confidence in the future trajectory of TIL-SPARI based upon key fundamentals. First, TIL-SPARI's profile. TIL-SPARI has a superior treatment profile compared to active compared to herb-based Arcon and addresses the needs of patients with IGAM and risk of rapid progression. Two, demand from nephrologists. Prescribers are excited about the filspirid profile, which is demonstrated by the high patient stock forms and the increasing new and repeat prescribers. Three, the payer progress. Quarter over quarter, we have shown increasing payer coverage growth. Now two-thirds of the lives are covered, and we're seeing high level of payer approvals for filspirid. And four, patient experience and adherence. We continue to hear feedback that patients on therapy have positive clinical results in their proteinuria levels. And once a patient starts Fils Fari, we are seeing that both compliance and persistence is high. Importantly, our team is focused on delivering a strong force forward that we will continue to adjust based on ongoing learnings to achieve our ambition of Fils Fari. becoming the foundational treatment for IEM patients at risk of rapid progression. Let me now turn the call over to Chris for the financial updates. Chris?

Thank you, Peter, and good afternoon, everyone. Following our third quarter results, we're in a very strong financial position. From an operational perspective, we continue to grow revenues, and we focus our investments for the future. We also completed the bile acid portfolio transaction, which has brought forward several years of value from the products and meaningfully strengthened our balance sheet. In our financials, the transaction is being reflected as discontinued operations, and as a result, the following discussion will be focused on our continuing operations unless otherwise noted. For the third quarter of 2023, net product sales were $33.9 million compared to $25.4 million for the same period in 2022. The increase is primarily attributable to an increase in net product sales from the ongoing launch of Filspari and IgA nephropathy. Thiola and Thiola EC also continue to perform well and contributed $25.9 million in net product sales in the third quarter. This growth continues to be driven by organic patient demand. During the quarter, we also recognized $3.2 million of license and collaboration revenue, which translates to $37.1 million in total revenue for the period 2019. compared to $28.1 million for the same period in 2022. Research and development expenses for the third quarter of 2023 were $60.6 million compared to $57.1 million for the same period in 2022. The difference is largely attributable to the continued advancement of the company's PEG2Batinase clinical program as it prepares for phase three initiation, including clinical trial expenses and manufacturing, as well as increased headcount. On a non-GAAP adjusted basis, R&D expenses were $53.8 million for the third quarter of 2023, compared to $51.9 million for the same period in 2022. Selling general and administrative expenses for the third quarter of 2023 were $67.8 million, compared to $52.4 million for the same period in 2022. The difference is largely attributable to commercial launch-related activities following the accelerated approval of PhilSparry in February 2023, as well as legal fees. On a non-GAAP adjusted basis, SG&A expenses were $51.8 million for the third quarter of 2023, compared to $43.5 million for the same period in 2022. Total other income net for the third quarter of 2020-23 was $3.4 million, compared to total other expense net of $1.3 million in the same period in 2022. The difference is largely attributable to an increase in interest income during the period. Net income, including from discontinued operations for the third quarter of 2023, was $150.7 million, or $1.97 per basic share, compared to a net loss of $69.7 million, or $1.09 per basic share, for the same period in 2022. On a non-GAAP adjusted basis, net income, including from discontinued operations for the third quarter of 2023, was $173.5 million, or $2.27 per basic share, compared to a net loss of $55.3 million, or $0.86 per basic share, for the same period in 2022. As of September 30th, 2023, the company had cash, cash equivalents, and marketable securities of $634.6 million. This includes gross proceeds of approximately $210 million received during the quarter in conjunction with the closing of the buy-lasted portfolio divestiture. To maintain our strong cash position, we're following a disciplined capital allocation approach that is expected to reduce our cost base from this year while ensuring the appropriate investments are made in the ongoing PhilSparry launch and advancing PEG-2-Batinase into Phase 3 development. Importantly, with these efforts and our reported cash balance at the end of the third quarter, we believe we can manage our balance sheet to support operations beyond 2026. I'll now turn it back over to Eric for his closing comments.

Eric? Thank you, Chris. The Trevier team has accomplished and executed on a remarkable number of milestones, making significant progress towards delivering innovative treatments for patients with rare diseases. Overall, for the third quarter, I remain incredibly proud of our team's execution. We have successfully delivered a quarter demonstrating demand for Philspari, and with the Protect Phase 3 data in hand, we remain confident in our goal of enabling Philspari to ultimately become the foundational therapy in IGAN. Feedback from the scientific community at ASN is deeply encouraging as we continue our Philspari launch and continue our plans to pursue an S&DA to convert Philspari for traditional approval. We remain on track to provide an update on our FDA engagements for both IGAM and FSGS this quarter. Additionally, the data packages from the Phase 1-2 COMPOSE study for PEG-2-batinase continues to support its potential to become a transformative disease-modifying therapy for the HCU community. We are excited to continue our efforts in this program, and we remain on track to initiate a pivotal study by year end. As we approach the end of the year, Our efforts are concentrated on finishing strongly. We are focused on executing continued progress with the Vilspari launch, advancing peg to batonets forward, and remain committed to delivering on our promise of making profound differences in the lives of individuals living with rare disease. I'll now pass the call over to Naomi for the Q&A question. Naomi?

Thank you, Eric. We can now open the line up for Q&A. Operator?

Thank you. If you would like to signal with questions, please press star 1 on your touchtone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. As a reminder, we ask that you limit yourself to one question. If you have another question, please rejoin the queue. And we'll now take the first question from Joseph Swartz with Lear Inc. Partners.

Hi, all. This is Will on for Joe. Thanks for taking our questions today. To just start for us, are there any notable patterns among the nephrologists that you have interacted with after the PROTECT readout? Just wondering if there are any groups of physicians that seem to appreciate the totality of the data more as compared to those who may not be fully comfortable with the profile yet. And then I have a quick follow-up to this. Thanks.

Will, thanks for the question. I will turn that over to Jula for questions. her thoughts in the early reactions. What I can say is that I walked away from the ASN meeting with a very consistent view that nephrologists are excited about the profile. Jule, why don't you share what you heard?

Yeah, I would agree with what Eric just said. I think people were excited to see the results and the full data presentation that shows that sparsentin has the potential to preserve kidney function. and significantly delay the time to kidney failure. The other important thing that was demonstrated is the rapid and the durable and sustained reduction in proteinuria. And when people get to see the totality of data, they feel like it's very promising and has the potential to be foundational treatment in patients with IgA nephropathy. And I would say, and the additional thing that I would say is looking to the future, the additional data that we showed with regard to earlier treatment were from the Spartan trial data, that shows if you treat people early, even before they've seen ACE inhibitors or ARB, you see even more reduction in proteinuria and preservation of kidney function. And if you use it in combination with some of that early data as well, it's safe and effective. So, I believe we saw a fairly consistent response to what we were able to demonstrate and show.

Great, thank you. And just a quick follow-up here. Given the literature suggests that the 40% reduction in protein area should lead to around a 2.7 mil per min per year benefit on EGFR, but we saw a bit of a different relationship in PROTECT. Have you heard any concern from docs on this? And now that you have the published data and have had some more time to review the results, do you have a better idea for what may have drove this outcome? Thank you.

Jule, I'll pass that one over to you.

Yeah, happy to answer that. When you look at the meta-analysis and all the data in combination, you're looking at drugs with different mechanisms of action, some that acutely increase EGFR and some that decrease. This is a two-year study where over two years we saw an absolute difference in benefit of 3.7 mils after two years, favorable for sparsentin, and that's a really important point to take into consideration. Obviously, the slope data is a modeled treatment effect where we see an annual benefit of greater than one mil per minute per year. And with drugs that have a slight acute effect, we know that that stabilizes kidney function over the long term. And the important thing to take away is that benefit accrues over time. So each year you get a benefit. It's 1.1 in one year. It's 1.2 in two years. It's 3.3 the next year. That's the important take-home message that you get. It accrues over the long term, which is very different than other drugs, which might increase the CPR and don't occur over the long term.

Great. Thank you so much.

And our next question will come from Anupam Rama with JP Morgan.

Hey, guys.

Thanks so much for taking the questions. On the patient start forms, maybe you can give us a little bit more color beyond the opening remarks on what you're seeing on the month-over-month growth here. Was there any particular headwind in the quarter beyond the summer seasonality that you talked about? Or was there a group of physicians that were kind of on the sidelines until they saw the two-year protecting GFR test? Maybe give us a little bit more color on that. Thanks so much.

Yeah, thanks so much for the question. I will have Peter talk about what he is seeing in terms of prescribing.

Yeah, thanks, Adam.

I would say overall, we see good continuation of growth during the quarter. And we had a little July inflection when less patients see their physician, and that's what I commented on in the prepared remarks. But overall, we're seeing continued growth from both new prescribers as well as repeat prescribers. And most of these patients are being managed through the community physicians, and that's why we see the majority of the prescriptions coming from as well. But other than what I was talking about from a seasonality perspective, we didn't see any other headwinds, and I'm really pleased with the continued growth that we show today in continuation of demand.

And our next question will come from Maury Raycroft with Jefferies.

Hi, thanks for taking my question. I think Jule just alluded to benefit occurring over time in the PROTECT study. Since patients on sparsentin and PROTECT washout prior to starting the open-label extension, how does this impact ability to show that treatment effect accrues beyond the two-year period? in case FDA asked for longer-term data like this? I guess, is there a way you can account for the washout? Maury, thanks for the question.

Jule, I will pass that one over to you.

Yeah, Maury, it's a fair question because, in reality, that's not how we're going to treat patients over the long term. You would keep them on, but that was a question that wanted to be asked because of the acute hemodynamic effect. And I would say the important thing is that what we saw was a durable treatment effect after patients went back to standard of care, where you saw an absolute overall favorable EGFR in patients who were sent in for washout. Now, we can continue to monitor those patients when they resume sparsentin, and I think the important data that we'll have that comes out of open label is what is the trajectory for those patients who are on erbisartan versus when they switch over to sparsentin. So, it'll be incrementally important information that we'll provide over the long term, but to your point, we believe that the data that we have from the double blind will be supportive of our S&DA filing at this point in time.

Got it. Okay. Thanks for taking my question.

And our next question will come from Greg Harrison with Bank of America. Hi, guys.

Thanks for taking the question. Are you able to give any color on the volume of patient start forms in the periods before and after the announcement of the PROTECT data? And what feedback are you hearing? from physicians on their appetite for prescribing filspari in light of the data. Great.

Thanks for the questions. I would say, before handing it over to Peter to provide a bit more perspective on what he's hearing, including some market research that his team quickly did, it's really too early to be able to look at projections sort of before or after protect in terms of prescribing. What I can say qualitatively coming out of ASN where, you know, there was much greater exposure to the actual data was a real excitement, you know, particularly for those that attended ASN, much more academic. Peter's team did some really great research quickly to understand that. So, Peter, why don't you share a little bit more about what your team learned?

Yeah, thanks very much for that question. I would say, first of all, the patient starts from 430 in the third quarter. I think it's a really good number, and that's leads to like a thousand patients in only the first seven and a half months. I think we're making really good progress there. To Eric's point, it's too early after the top line data announcement to see any change in inflection. But I think overall, what we saw in the market research, and this was a PILS market research right after the press release of the top line, is that there is good confidence in the profile of Charles Parry. And having been at the ASN and having had many of the conversations with physicians, I think there was a really good reception of the Phil Spirey profile, the totality of the data, and what Phil Spirey can mean for those physicians' patients.

So I think overall, good reception and, yeah, more to come. And our next question will come from Vommel Divan with Guggenheim Security.

Hi, Greg. Thanks for taking my questions. I'm just curious if you can share some more feedback on the REMS and safety side of things. I think you said you've now touched about 5,500 nephrologists, I believe, was the number you shared. Can you share anything in terms of how many nephrologists are now sort of worked their way through the REMS program or certified to prescribe it? And then again, just kind of the theme of some of the other questions, just any feedback on the safety side of things now that we've seen in the poll data both unprotected as well as duplex.

Vamal, thanks for the questions. Before I hand it over to Peter, what I'll just share is that we can provide some qualitative and directional feedback on the REMS as well as the safety profile. We are not providing metrics on REMS certification. But, you know, we continue to see that grow. Peter, why don't you talk a little bit about what the reaction and what directionally you're hearing, both from the physician and the patient perspective. And certainly, Jule, you know, if there's anything further you want to add on reactions to safety coming out of ASN, by all means, add that. Peter?

Yeah, certainly, Eric. And I think you were referring to the amount of nephrology that we have seen in face-to-face interactions. And indeed, I did call out 5,600 nephrologists that we have seen in face-to-face interactions with our field force in the launch. And that is, I think, a very good progress because as we announced during the launch call, we are consistently want to call on about 6,000 nephrologists and discovering about 85% of the patient population. And so I think we are making really good progress. We are nearly there from overall nephrology perspective. With regards to the safety profile, I think that was the 2nd part of your question. Maybe July. That's a more appropriate question for you to answer.

Yeah, I think that I would respond. Significant reassurance with regards to the safety profile around across the program to date both protect and duplex where we saw the exact same. safety profile with regards to the liver elevations of three times upper limit of normal and really no new elevations since our interim from protect. And so where physicians rapidly move to is, can this be changed over time? Which, of course, we will readdress this as we continue to accrue data and go back, but that's where physicians quickly move to. So we feel reassured by the safety profile at this time.

Well, maybe I can just add one other insight that I think might be helpful, and it's really behind some of the comments that Peter shared in his prepared comments. And that's really the reaction of physicians versus patients to the REMS. Most physicians are familiar with, you know, how to read prescribing information, what a box warning is, and what a REMS is. And in fact, you know, many nephrologists have familiarity and are accustomed to REMS. For patients, on the other hand, some of them may just be accustomed to going to their local pharmacy and picking up a prescription for, you know, an ACE or an arm or others. So, for some patients, it requires a bit more education, a bit more hand-holding through the process. For that segment of patients that Peter talked about, it really does require a bit more information, education, and support. And so, there is a segment, as we refer to, where the REMS does take a little bit more time. But overall, what we're hearing from physicians is the REMS doesn't take that much time. It's very straightforward. For many patients, it works incredibly well. But I think we do need to make sure that we're providing all patients the information that they need to be able to move from patient start form to actually fulfilling their prescription. So, I think that was the key insight and the pivot that we had this quarter. to make sure that we're able to move all patients as quickly through the process as possible.

Okay, thank you. And our next question will come from Lisa Baco with Evercore ISI.

Hi there, thanks for taking the question. Can you just give us a little detail on things like growth to net, for example? where you're at there, and then actually how many patients did you have on therapy by the end of the quarter?

Chris, why don't we have you go through gross to net, and Lisa, I'll say that we are not yet in a position to be able to comment on number of patients on therapy or other types of KPIs that you might be looking for, because as you can imagine, in the first year of launch, it is quite variable. You've got patients that are on, you know, free drug as well as just working their way through the reimbursement process. So, we're not in a position to be able to come in at this point. What I can say is that we continue to see very strong demand. We continue to see that inflection in revenue that we expect to continue. and become more closely aligned with the underlying demand of patient start forms. Chris, do you want to comment on gross-to-net? Sure.

So, Lisa, consistent with our prior guidance, we expect that stable-states, sparsentin, or felspari gross-to-nets to be mid-to-high teens. And, you know, that's consistent with what we see today. There's going to be some variability quarter-to-quarter as we're getting all the processes, and as Eric highlighted, the different elements of reimbursement, et cetera. But overall, we feel very confident that we're going to end up in that mid to high teen range, and that's consistent with how we're operating now.

Okay, great. And how many patients did you have on at the end of the quarter roughly?

We did not report on numbers of patients on therapy because, again, during the first parts of launch, it is variable. And so, you know, getting to a steady state would allow us to be able to report on a consistent basis to be able to project forward. So, at this point, we're going to continue to report on those three metrics that we shared and guided to in February of patient start forms, payer coverage, and revenue. And I think as you see from the revenue inflection that we had from Q3 to Q4, that we have many more patients that are on Reimbursed medicine, and we would expect that only to continue through the 4th quarter and beyond.

Okay, and then any commentary on or update on the. The new guidelines coming out that could guide the guidelines.

Do you want to take the latest on the guidelines?

Yeah. We're very pleased that we were able to get our PROTECT results published and peer-reviewed. We knew that our interim data was going to be included in the KDGO guidelines, and now that we have the complete data, they will also be able to be reviewed and included in the guidelines. Those will be available for public commentary in the very first quarter of 2024. Okay, great.

And then just final question for me, kind of as we see the landscape evolving, I was really kind of struck by the EGFR results that Osuka presented for Sivaprelimab, which is, you know, one of the B-cell modulators targeting April. I guess in the context of having, you know, that kind of effect on EGFR, like how do you see kind of the need for other mechanisms on top of that if you're able to keep EGFR relatively flat or is there still like you can do better and what about proteinuria and all those other things. But just curious how you're thinking about sparsantan in the context of that kind of a remarkable change in EGFR. Thanks.

Yeah, I'll have Jule talk about the view of maybe hers or of nephrologists in kind of the evolving treatment landscape. What I'll share is that the thing that really excites us about the profile of Filspari is the ability to combine with all of these new classes of therapies that are being developed. And, you know, each of them are being studied on top of RAS inhibition that occurs, you know, to address the overactivation in the kidney. I think now what we've seen with our two-year data is the superiority of Filspari versus RAS inhibition alone. So it really is the question of how and when and in what patients do you combine is really the way that we think about it in the positioning, and that's what we mean by that foundational therapy. I know that a lot of this data is early, but, Julie, do you want to comment on how you view as a nephrologist and what you're hearing from your peers in this emerging treatment landscape?

Yeah, I think it's important. As Eric said, you need a foundational treatment. when you get diagnosed with IgA nephropathy, you have already damage that's ongoing and you need to reduce the proteinuria to preserve kidney function. And what we demonstrated with PROTECT is if you replace your RAS inhibitor with sparsentin, you can get incrementally closer to a normal kidney function in the twos. If you want to then add additional treatment on subsequently, if that patient either doesn't get into complete remission or continues to progress Certainly, that's an alternative treatment option to add on. With regards to the Sibipridilumab data, you know, that's one-year data. We showed similar 36-week data. If you start treatment very early, the Spartan trial data, 80% reduction in proteinuria, two-thirds of patients getting into complete remission and no change in EGFR, early data. So, again, we do need to follow the data that we're seeing from these Phase IIs to further out but I do believe that are sent in as foundational treatment with the increment of other therapies. We want to preserve kidney function as much as we can, and combination therapy is absolutely the future of treatment for patients with IG nephropathy.

And as a reminder, please limit yourself to one question.

Thank you. And our next question will come from Mohit Bonsal with Wells Fargo.

Hey, this is Amman from Mohit. Thanks for taking our question. Would you briefly touch upon the early persistent data you have for patients on Filspare and how you think REMS contributes to this? And then separately, we'd appreciate an update on what you're seeing in terms of step edits and prior auths so that you have more formularies covering Filspare.

Yeah, thanks for the question. Peter, I'll turn to you in just a moment to talk about, you know, what to explain a little bit more about persistence compliance as well as step edits. But before I do, I want to share a story that I heard from a patient who really talked about their journey with IG nephropathy. And he shared this at ASN last week, where I think initially he had, you know, some questions or really uncertainties about what a REMS would mean for him. And this was a patient that struggled to get his proteinuria down for years, and his physician offered him psilosporine. And you can imagine that, like for many patients, having to go and do additional testing and starting a new therapy, there were many questions. What he shared, and I think was really an aha for many of us in the audience, was that he looked forward to those monthly calls with the nurse from our total care center and the ongoing monitoring and support that he felt from our hub services, our patient services, as well as those regular check-ins from his physician. So actually, you know, that may be for many patients a real additional support for that longer-term compliance persistence with therapy. And we know that for many patients, particularly those that are otherwise young, healthy, working, busy, It can be a challenge. So I think that it was really is a real benefit. We've heard lots of questions about the challenges of REMS. I think he did an incredible job to articulate what he found in value of that regular monitoring and really people looking after his health. Peter, do you want to share anything further on the persistence as well as the payer coverage?

Yes, Eric, and thanks, Maurice, for that question. I think your question was on three components. One was on payer approval, one was on compliance persistence, and one was on rent, if I understood you correctly. So let me go one by one. I think really pleased with the payer approval rate that we are seeing for PhilzPari, which closely matches the progress we're making in the overall coverage as well. So I think we have made really good progress there. And also the compliance and persistence, patients that are on products, see clinical results, and remain on product. I know this is one of the questions initially with the monthly monitoring, will patients remain on therapy? And what we are seeing so far, and it's still early days, we see strong compliance and persistent rates. With regard to the REMS and patient perception of the REMS, I think for a large amount of patients, the process is working very well, and these patients receive Felspari well within benchmark numbers. But as Derek mentioned earlier, and I was alluding to that in the prepared remark, there's also a segment of patients that need a little more hand-holding through education and support. And I think you have to realize that it was only until the second half of June that we had the opportunity to educate physicians and patients other than the packet sensors as part of the FDA guidance for accelerated approval. So really, by the end of June, we were able to provide that additional educational support for patients. And with the additional support, we are seeing that the early REM certification for that group of patients is already improving. It also translates them into an increase in paid first-party shipments to patients.

Thanks so much. And our next question will come from Carter Gould with Barclays.

Hey, guys, you've got Edwin Delfin on the line for Carter Gold. Thanks for squeezing us in here. We have a question on pegged botanists for HCU. I know you've completed the end of phase two meeting, but have you guys received clarity from the agency on amount of follow-up and any impact on clinical measures beyond the biomarker impact for the primary endpoint? Thanks.

Edward, thanks so much for the question. And we are really excited about our HCU program. and moving into phase three here very soon. Bill, why don't you take that question to share a little bit more to answer those questions. But before I turn it over to Bill, I will say that we'll be sharing, you know, much more detail once we initiate the trial on, you know, aspects of the trial design. But certainly, Bill can share what we've shared publicly at this point.

Certainly, now that I'm off mute.

We've completed the end of phase two, as you noted. We had very collaborative discussions with the agency, and I'm happy to report that we've aligned as we intended to all along on total homocysteine as the primary endpoint for the study. There are various aspects of the program that look at clinical benefit. Some of those are measures of function, Some of those are quality of life. Some of those will be looking at what we're able to do with diet. And as Eric said, we're going to have more detail about this. Once the study starts, we'll give you a full picture of the phase three program. I think you also asked around overall study duration. If we look at the range of other enzyme replacement therapy studies, The period of observation ranges from six months to 18 months. And we'll be in that window. And most of those studies are less than 100. So I think that gives you kind of a ballpark of where we're headed.

And we'll have more once the study has started. Appreciate that. That's helpful. Thank you. And our next question.

And our next question comes from Laura Chico with Wedbush Securities.

Hey, good evening, guys. Thanks very much for fitting me in here. I wanted to go back to the patient start forms for a moment for Phil Spari. And 430 over 417, I guess the question I've got is, have you plateaued in terms of how high you can go with patient start forms? If I look back, for example, at the first year of Tarpeo's launch, I believe they peaked out at 589 enrollments. during those first four quarters. So, I'm curious as to whether you think you can actually grow this much more beyond 430. Thank you very much.

So, Laura, I think the question is unequivocally yes. We have nearly a thousand patient start forms through the third quarter of this year. And as we think about the number of patients that we believe are addressable that will increase. I'll turn it over to Peter, but I want to be able to emphasize our confidence and be able to identify those patients. But equally, the enthusiasm that we hear from nephrologists, not just that anticipate prescribing, but those that have prescribed. We're seeing repeat prescriptions and new prescriptions, new prescribers added every month. That's a really important lead measure for any launch. In my experience, those are critical Those and the clinical experience, the feedback anecdotally we're hearing, we are seeing really positive results there. So we do expect it to grow, and Peter can talk a little bit more about what he's seeing and where we expect to go from here.

Yeah, thanks, Eric, and thanks, Laura, for that question. I think there's really three components here that I would like to highlight. To answer your question, like how far can you go and how many patients are out there? The first one is, I would say there have been limited innovation in nephrology in the last 30 to 40 years. And that's what you see as well with physicians. Nephrologists are relatively conservative in adaptation of new medicine. And part of that is also the education. In particular, in IJ nephropathy, where there have been little investments in education. And I think the radar publication that we discussed actually at the last earnings call, and Joër can provide a little more context on that, really is providing that increase in urgency to treat. Because historically, a lot of the physician thought like IgA nephropathy is a relatively slow progressive disease. But what we are seeing right now based on new data and registry research is that those patients actually progress much more rapidly. So I would expect that the patient population over time will be increasing, also with new guidelines and new guidance. So within that context, I would say I'm really pleased with the progress we have been making. To Eric's point, we have now nearly 1,000 patients in the first seven and a half months of PhilSparry. And I see with all the continued investments and education and community, there is that recognition that this patient should be treated more early and more urgently. So, Jill, maybe we can provide a little more context on your perspective on, for example, radar.

Yeah, I think that as we educate the physicians and they realize that what they historically understood and were trained in their educational program 10, 20, 30 years ago, that IgA is a benign disease and they can send them back to their primary care physician and see them every few years is not the case. and that patients even with 500 milligrams of proteinuria are at risk of progression to kidney failure within their lifetime. We had additional data presented at ASN that confirmed the radar data, and this was US registry data that showed similar results. Patients even with lower ranges of proteinuria are at risk to progression to kidney failure That dissemination of information needs to get out to the community physicians who don't always go to these kidney meetings and don't always read the journals. And as they see this information, that urgency to then treat their patients increases. And to Peter's point, then that translates into the need to treat them with a foundational medication such as Vilspari, which reduces proteinuria and preserves kidney function.

And our next question will come from Tim Lugo with William Blair.

Hi, this is John on for Tim. Thanks so much for squeezing us in. So, with the recent Oxford Sensen data, I was wondering if you could just give us some thoughts on that data and how you might think that might impact the regulatory landscape moving forward.

Yeah, I mean, we certainly expect that there are going to be additional data, potentially new therapies that are going to be approved. I think, you know, it's hard for us to comment because there were no data disclosed, and so I think we'll have to wait to see what is presented from Atrocentin for us to be able to comment. I mean, our working assumption is that it is an endothelin blocker, so it should show benefit. We certainly have demonstrated that with PROTECT with sparsentin, and we've seen that proof of concept with other endothelin blockers. But we've got to see the data on benefit and safety before we can comment.

And our next question will come from Alex Thompson with Stifel.

Hey, great. Thanks for taking my question. I guess in the past you've commented sort of with this uptick in sales in the second half of the year that you're comfortable with consensus numbers for the year, which I think Bloomberg are in the low 30 million range at this point. I guess maybe if you could reiterate your confidence there, that would be great. And then could you also maybe comment on the impact at all of stocking in the revenue this quarter? Thanks.

Yeah, thanks, Alex. I'll take the first part of that question, and then I'll turn it over to Peter to talk about the impact of stocking. throughout the year. What I can say is that I'm incredibly proud of the progress that we've made on the PhilSparry launch in the ability to continue to grow demand, to be able to show the early signs of that inflection that we expect. And as we've guided in the back half of this year, we'll start to see revenue track more closely with that underlying demand with the number of patient start forms. I think as Peter alluded to, you know, we still have some some room to go in terms of aligning that more closely. We expect that we're going to make that progress in the fourth quarter. And in fact, when we look at other rare renal launches, we've seen that there's a meaningful proportion of their first year sales in that fourth quarter. We fully expect that to be the case with us as well. We've seen the inflection so far And in terms of providing specifics on guidance, we've not provided that this year. We won't for the rest of the year. But we are confident in the continued selection of both patient start forms and of revenue.

And our next question will come from Allison Brotzell with Piper Sandler.

Hi. Good afternoon, guys. And thanks for the update and for taking my question. There's one on the Spartan study update at ASN, and this is kind of a follow-up to a prior question and prior discussion, but just based on your interactions with nephrologists and KOLs, could you help us understand what kind of additional clinical data you think you need to generate to really catalyze or just drive widespread first-line use of FOSBARI in IGAM or just earlier line use more broadly? Thanks.

So, first, let me take part of that and I'll turn it over to Jula and then to Peter. What I would say is, you know, our focus right now is under accelerated approval, we've got to focus very much on the label at hand. You know, we would expect that with traditional approval that we would expect to see that expansion. But, Jule, do you want to comment on, you know, what additional data you're hearing from nephrologists? And, Peter, then perhaps, you know, further what you're hearing in market research.

Well, to Eric's point, right now we're primarily being utilized in prevalent IgA nephropathy patients who remain at risk for progression per our label. Physicians are very excited about the Spartan data because we're one of the only ones that's generating this data. Patients who are newly diagnosed who haven't failed RAS inhibitors yet and the potential for sparsentin to be used as a first-line treatment and the magnitude of proteinuria reduction and kidney function preservation. So I think that the Spartan data can incrementally show that. The other important data that we're going to have in this is some of the biomarker data, the fluid data, the bioimpedance that shows the safety profile, as well as some of the novel data that's going to come out from this study is the repeat kidney biopsies in these patients. So incrementally, the information that's going to come out of SPARTAN will further give confidence with regards to the place of therapy that sparsantin can play in patients with IgA nephropathy.

Thank you.

Building on that, I would say we have very strong data now for patients that basically have failed RAS inhibition, both ACE and ARBs. And we know from market research that over half of the patients that are on ACE and ARBs are not getting to the target levels of proteinuria as a physician would like to. So we have still a lot of patients to go in that segment. But now we also have patient information and very strong data in patients that are last naive. And then I think the third category is really building upon the evolving treatment landscape and being prepared for combination therapies, as Julia was mentioning. And I think the combination data that we presented last week at ASN with FDLG2 provides that additional context as well. So I think we are building the data and the evidence across a broad patient population that could benefit from first-party treatment.

And we'll take a question from Ed Arcee with HC Wainwright and Company.

Great. Thanks for squeezing me in. And Peter and Jula, it's great to see you this weekend in Philadelphia. Three questions for me. First of all, in one of the sessions at the conference, I saw Eliza Thompson discuss the chronic versus total slope and basically acknowledge that there's a hemodynamic effect there early on. And so in light of that, I'm just wondering if you could, you know, discuss your thoughts as you approach the meeting with the FDA and discuss all the other supportive data in the context of the totality of the data for full approval. And then two more just in terms of the ongoing launch of PhilSparry. Firstly, can you discuss the PFS in October if there is any further acceleration from the third quarter. And then lastly, I'm wondering if you can discuss the conversion timeline from PFS to treatment initiation, perhaps now and then also eventually steady state expectations. Thanks so much.

Okay. Thanks, Ed. So, Bill, I'll have you comment on the regulatory perspective and how we are thinking about, you know, the totality of data. And, Peter, you can talk about, you know, directionally what we're seeing in October as well as conversion. Bill?

Certainly. Thanks for the questions, Ed. I thought that was a very good session on IGA nephropathy endpoints. And the question was put to Dr. Thompson about, you know, how is the agency looking at assessing all the different drugs that are in phase three studies now for approval or moving toward that. And her remarks, one, they were very consistent with the discussion that we've had over the years around endpoints that, you know, there are different ways to measure kidney function. EGFR, she pointed out, is a surrogate in itself, but it's a validated surrogate. And for those patients with a high risk of kidney progression, they want to see compounds showing a meaningful effect on the rate of loss across the body of evidence. And they're also looking for compounds that show an accumulation of benefit across various stages of the disease, whether they are early in the disease progression or later in that. And I think that the data package that we have with the chronic slope, the total slope, measurements pre and post, the overall absolute difference at two and a half years, the reduction in hard endpoints, the kidney failure endpoints, the increase in patients that get to complete remission, all of this on a background of a very safe therapy, it's clear mechanistically there's two things going on in these kidneys, angiotensin and endothelin, both driving negative effects. And blockade of both together is really required to have the best outcomes in these patients. So I'm very confident in the fact that we have a very strong case to make with the agency, and I look forward to the review.

All right. Peter, would you like to comment on, you know, direction of what we're seeing in October and the conversions, which we're not providing metrics on, but directionally?

Yeah, I would say to your point, Eric, we have to practice not to comment on metrics within the quarter. With regards to demand, I would say that we see a continuation of new patient source funds coming in, so really pleased with that. And also to what I mentioned in the prepared remarks, we start to see an increase in patientship. So I'm really pleased with the progress and also expect to have that further inflection on revenue in the fourth quarter and moving into 2024.

And that does conclude the question and answer session. I'll hand the call back over to you.

Thank you, everyone, for joining us for our third quarter 2023 financial results call. We look forward to providing additional updates on our progress. Have a great rest of your day, and thank you.

Thank you. And that does conclude today's conference. We do thank you for your participation and have an excellent day.