Travere Therapeutics, Inc.

Good afternoon and welcome to the Travere Therapeutics fourth quarter and full year 2024 financial results conference call. Today's call is being recorded. At this time, I would like to turn the conference call over to Victoria Prescott, Manager of Investor Relations. Please go ahead, Victoria.

Thank you, Chloe. Good afternoon and welcome to Travere Therapeutics. fourth quarter and full year 2024 financial results and corporate update call. Thank you all for joining. Today's call will be led by Dr. Eric Dubé, our president and chief executive officer. Eric will be joined in the prepared remarks by Dr. Jula Inric, our chief medical officer, Peter Hirma, our chief commercial officer, and our chief financial officer. Dr. Bill Roth, senior vice president of research and development, will join us for the Q&A. 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 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 statement disclaimer on the company's press release issued earlier today, as well as the risk factor section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, February 20, 2025. and trivia 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.

Thank you, Victoria, and good afternoon, everyone. We just completed a remarkable year, one marked by execution, innovation, and a relentless commitment to patients with rare kidney and metabolic diseases. Our exceptional progress cumulated culminated in the full FDA approval of PhilSparry for IGN nephropathy in September, a major milestone for our company and the patients we serve. In the fourth quarter, net sales at PhilSparry grew by nearly 40% compared to the third quarter, and we saw a meaningful inflection in demand following full approval. This is a testament to our sound commercial execution. alongside Pilspari's strong profile with robust long-term efficacy, including preservation of kidney function and two-year safety data. It also speaks to the ability for physicians to now prescribe Pilspari to more of their patients with IGAN with a broader label and supportive draft Cadego guidelines. I'm also excited about the progress we've been making in expanding Pilspari's potential beyond IGAN. As we highlighted last week, We recently completed our Type C interactions with the FDA and plan to submit our SMDA for a potential FSGS indication around the end of this quarter. This submission, supported by compelling data from our duplex and duet studies that we believe are further validated by the findings from the Paracel group, could lead to the first-ever FDA-approved therapy for patients with FSGS by year end. We continue to believe that FSGS represents an even greater potential opportunity to help patients, and we look forward to the submission and review process. In addition, we remain committed to generating further evidence to support PhilSparry's foundational positioning in IGAM and broad use, which Jule will touch on shortly. Also in the pipeline, we continue to believe in the disease-modifying potential for PEG-2-batinase and the hope it can bring to the HCU community. We are continuing to optimize our manufacturing scale-up of our PEG to Batinase program, and I am pleased with our recent progress. Looking ahead into 2025, our strategic priorities are clear and focused. We will leverage our recent full approval and broader label to further solidify Pilspare's foundational positioning again as the only non-immunosuppressive kidney-targeted therapy that has demonstrated superiority over historical standard of care. With the unique profile and unsurpassed clinical data, we believe that Filspare will be utilized as a new foundational therapy in IGAN, now and into the future, replacing the traditional role that RAS inhibitors have played. We will also focus on submitting a high-quality SMDA for FSGS, working with the FDA throughout the review process and preparing for a potential launch later this year. And lastly, with PEG to Batinase, we aim to maintain the momentum in our CMC efforts to enable reopening enrollment in our Phase 3 Harmony Study, and we are on track to achieve that next year. Following our successful financing near the end of the year, we are well capitalized to execute on these key strategic priorities. Let me now turn the call over to Jula for the clinical update. Jula?

Thank you, Eric. I'd like to start with sharing some feedback from physicians following Phil Sparry's full approval in IJ nephropathy. Nephrologists are expressing a greater urgency to get their patients with IGAN into complete proteinuria remission, or less than 0.3 grams per gram. This is driven by the complete remission data from both PROTECT and SPARTAN studies that demonstrate that Phil Sparry particularly if used earlier, can get more patients into complete remission, as well as the updated draft CADIGO guidelines that recommend earlier diagnosis and treatment to lower proteinuria targets. These data also show that patients reaching complete remission can achieve kidney function loss close to that of normal aging. Additionally, more physicians see Filspari as a foundational therapy. When we speak to nephrologists, foundational treatment is defined as non-immunosuppressive, kidney-targeted, and nephroprotective that can be used chronically in nearly all patients with IGAN. The foundational role of Filspari is supported by the fact that it targets directly two pathways causing kidney injury. is non-immunosuppressive and can be used safely long-term, and has efficacy based on superior kidney function preservation from a head-to-head comparison over a historical standard of care medicine, erbisartan. Also, with the removal of the 1.5 gram per gram threshold from the label following full approval in IgA nephropathy, We're hearing that nephrologists are seeking use in a broader eligible patient population. The new evidence presented at ASN Kidney Week demonstrating Filspari's efficacy in patients with lower proteinuria levels and the long-term safety profile continue to reinforce physician confidence in Filspari as a long-term treatment option for this larger segment of IGAN patients. Our medical teams are continuing with education on the data that supports Filspari's position as a foundational treatment for IgA nephropathy. This education focuses on the benefits of treating IgA in patients earlier and to lower proteinuria targets in line with the updated draft KDGO guidelines. And it also highlights evidence that supports earlier and broader use of Filspari, as well as clinical studies on Filspari use in combination with other available medicines. For example, the phase two Spartan study evaluates early use of Filspari as a foundational treatment with anti-inflammatory properties. Data from the study has shown a nearly 70% reduction in proteinuria and approximately 50% reduction in urinary inflammatory biomarker soluble CD163 over 24 weeks in newly diagnosed patients with IgA nephropathy. We expect additional data from this ongoing study later this year. I'm also excited to share that preparations are underway to expand the START-SPARTAN study to include post-kidney transplant patients with recurrent IgA nephropathy. We also plan to initiate a new open-label study of sparsentin to generate additional data with its use in post kidney transplant patients with recurrent IgA nephropathy or FSGS. These patients are already on chronic immunosuppressive therapy to prevent organ rejection and remain at high risk of disease progression. There is clearly a significant need for a safe and effective non-immunosuppressive treatment option directly addressing the injury in the kidney And we're looking forward to generating more data in this area of high unmet need. Turning to FSGS, we continue to believe that Filspari, if approved, could become a new treatment standard in this highly progressive disease. It is important to note that FSGS is heterogeneous. And one of the distinct advantages we have seen in our development program is that Filspari has consistent efficacy data across disease subtypes. including in patients with genetic FSGS who are historically not responsive to treatment. This applicability is particularly important given the diverse patient population affected by FSGS and could uniquely position Filspari for broad use if approved. Importantly, our robust clinical data in FSGS is aligned with the findings from the Parasol group, and has demonstrated a clear correlation between proteinuria reduction and decreased risk of kidney failure. As we highlighted last week, we are very pleased with the progress on the regulatory front. Our recent interaction with the FDA provided clarity on our submission, and we are confident in the strength of our clinical data and believe it provides an opportunity for Filspari to potentially become the first approved therapy for patients with FSGS. As Eric mentioned, we plan to submit our SMDA around the end of the first quarter of 2025. Our medical teams are also preparing our physician education initiatives with an emphasis on the biologic plausibility of proteinuria as a causal marker of the disease and its impact on hard outcomes such as kidney failure. This will enable physicians to further understand the important role of proteinuria in FSGF. Turning briefly to our PEG-2-Batinase program, as Eric mentioned earlier, we continue to believe in the potential for it to become the first and only disease-modifying therapy for patients with HCU. We are pleased with the progress on the optimization efforts for manufacturing scale-up and expect to restart enrollment in the Pivotal Harmony Study next year. With that, I will now turn the call over to Peter for the commercial update. Peter?

Thank you, Dula. I'm pleased to share our exceptional commercial performance for PhilSparry during the fourth quarter, which marked our strongest period since launch. As expected, the conversion to full approval in the US with an expanded PhilSparry label has accelerated our growth. In the fourth quarter, we received 693 new patient start forms, representing a 37% increase from the prior quarter. clear evidence of PhilzPARI's growing adoption in the IGaN community. This growth has been driven by both new prescribers and increased depth among repeat prescribers. On the patient access front, we continue to have excellent coverage, and I'm particularly impressed with the advancements we have seen in payer formularies. This is best exemplified by updates of authorization criteria, reflecting the broader PhilzPARI IgA nephropathy label, which will further ease access for patients with lower proteinuria levels. This will also be beneficial as we see more therapies come to market, which we expect will be mostly indicated for patients at high risk of disease progression or proteinuria levels of 1.5 gram per gram or above if under accelerated approval. In addition to the strong demand and access, we continue to see improvements in our fulfillment process, as well as high compliance and persistence rates, all key fundamental drivers of a successful launch. These elements resulted in achieving approximately $50 million in net product sales of PhilzPari for the fourth quarter, nearly 40% growth over the previous quarter. To start 2025, we have been pleased with the continued strength in demand, and we are confident in PhilzPari's future uptake as we look ahead. For the foreseeable future, we expect PhilzPari will be the only foundational, kidney-targeted, non-immunosuppressive, and long-term treatment option fully approved for IgA nephropathy. Furthermore, it is the only medicine that has demonstrated superiority versus an active control, maximally dosed historical state of care and has the flexibility to be combined with other modalities. This means that TIL-SPARI will be uniquely positioned as the only medicine of its kind indicated for all adult patients with IgA nephropathy at risk of disease progression. As the IgA nephropathy landscape continues to evolve and more therapies may get accelerated approval, we expect many of them to be complementary to filspary and for them to have an initial label that will be limited to patients at high risk of progression, which has been defined as generally a proteinuria level of 1.5 gram per gram and above. While we are continuing to have success with filspary in this high-risk segment, Our estimates suggest this group of patients above 1.5 gram per gram is approximately 30% of the addressable patients with IgA nephropathy and is likely to diminish over time as more approved therapies may become available. We believe about 70% of the addressable patients with IgA have proteinuria levels between 0.3 and 1.5 gram per gram. Notably, this segment is expected to grow with earlier diagnosis, increased biopsies, and lower treatment thresholds target set by Cadego. Consistent with our growth driver, The median starting platonuria level for patients initiating filspirase is now below 1.5 gram per gram, which is a signal that we are making good headway in this population in the first few months following our full approval. And then we have a good opportunity ahead of us. The updated draft Cadego guidelines for IgA nephropathy are also expected to continue to be a large driver of change in physician behavior. This guidance encourages earlier diagnosis and treatment with more ambitious treatment targets of 0.5 gram per gram or, preferably, complete remission. As you heard from Zulab, this will ultimately result in patients getting access to medicines earlier with the goal of achieving complete remission. The updated draft Cadeo guidelines also highlight filspary as the only kidney targeted therapy that has shown superiority over an active control and maximally dosed Ras inhibitor. Positioning Silspari as the only treatment option to replace the traditional role ACE and ARBs have historically played in IgA nephropathy. We expect this to continue to drive adoption among physicians and payers as the guidelines are finalized. Finally, The potential modification of the liver monitoring requirements, if approved this summer, could further ease the process of adoption and enhance the patient experience. Now, let me briefly talk from the opportunity for Phil Spirey in FFDS, if approved. As Doula outlined earlier, FFDS is the most progressive glomerular disease and is often manifested with extremely elevated proteinuria levels. The high and urgent unmet needs of approved treatments for FSDS is well established across the nephrology community. Depending on label language and indication, we estimate up to 30,000 patients in the US with FSDS could be addressable for field sparring if approved. Based on our assessments, we anticipate that over 80% of our targeted nephrologists are treating patients with IAGI nephropathy and With this high overlap of potential prescribers, the urgent need for medicines to lower proteinuria, and with Phil's very strong established position in IgA nephropathy, we are confident that we will see a strong uptake in FSDS if approved. I'll now turn the call over to Chris for the financial update. Chris?

Thank you, Pieter, and good afternoon, everyone. In the fourth quarter and entering the new year, our operations have continued to strengthen. As you heard from Peter, we've seen a meaningful inflection in net product sales of Filspari following full approval, and the outlook for the launch remains strong. We also continue to be measured in the investments we're making to drive our growth. I'll start with revenue, where we generated net product sales of $73.5 million in the fourth quarter, representing significant sequential and year-over-year growth. For the full year, net product sales were $226.7 million, a nearly 80% increase compared to 2023. So SPARI continues to be the key growth driver, generating $49.6 million in net product sales during the fourth quarter and $132.2 million for the full year 2024, which outperformed benchmarks for the first full year of launch. Sciola and Sciola EC also contributed $23.9 million in net product sales for the fourth quarter and $94.5 million for the full year 2024. The slight decrease in thiolinette product sales in the fourth quarter is a result of generic dynamics. Given there were several generics approved in 2024, for this smaller segment of our product sales, we do anticipate further headwinds throughout this year. During the quarter, we also recognize $1.2 million of license and collaboration revenue, which results in total revenue of $74.8 million reported for the fourth quarter and $233.2 million for the full year 2024. Turning to operating expenses, our research and development expenses for the fourth quarter of 2024 were $62.1 million compared to $59.7 million for the same period in 2023. On a non-GAAP adjusted basis, R&D expenses were $58.6 million compared to $55.3 million for the same period in 2023. Selling, general, and administrative expenses for the fourth quarter were $69.5 million compared to $63.6 million for the same period in 2023. On a non-GAAP-adjusted basis, SG&A expenses were $51.6 million for the fourth quarter compared to $49.7 million in the same period in 2023. Overall, we reduced our R&D and SG&A expenses meaningfully in 2024. This was driven by the restructuring enacted at the end of 2023, as well as reduced clinical expenses as the Filspari Phase III studies advanced towards completion. This was partially offset by additional investment to support the commercial launch of Filspari and IgA nephropathy as well as PEG-2-Batinase initiating its Phase III program, and some early work to support a potential FSGS indication. Total other income net for the fourth quarter of 2004 was $0.4 million, compared to $5.7 million in the same period in 2023. The difference is largely attributable to lower interest income during the period. Net loss, including discontinued operations for the fourth quarter of 2024, was $60.3 million, or 73 cents per basic share, compared to $90.2 million, or $1.18 per basic share for the same period in 2023. Net loss, including discontinued operations for the full year 2024, was $321.5 million, or $4.08 per basic share, compared to $111.4 million, or $1.50 per basic share for the same period in 2023. The full year 2023 includes a $265 million gain on sale that was recorded following the sale of our BioLabs business. On a non-GAAP-adjusted basis, net loss, including from discontinued operations for the fourth quarter of 2024, was $39 million, or $0.47 per basic share, compared to $71.8 million, or $0.94 per basic share, for the same period in 2023. The net loss for the full year in 2024 was $241 million, or $3.05 per basic share, compared to $20.6 million, or $0.28 per basic share, for the same period in 2023. As of December 31st, 2024, we had cash, cash equivalents, and marketable securities totaling $370.7 million. This includes net proceeds of approximately $134.7 million from our successful financing completed in November. As we look ahead, we expect our business to strengthen further. From a revenue perspective, we expect a moderate increase in gross to net discounts compared to 2024, but we believe net product sales at Pillsbury and IG Nephropathy will grow significantly in 2025. and continue to outpace benchmark launches. We will also remain disciplined in our investments as we continue to support the successful launch in IGN nephropathy, prepare for a potential launch in FSGS, and further optimize our CMC efforts to restart enrollment in our Pivotal PEG to Badness program. Additionally, we anticipate incoming milestone payments from CSL v4 upon conversion of PhilSparry to full approval in Europe and achieving market access milestones later this year. With this plan, we project that our operating cash use will continue to decline over time and that our balance sheet will be able to support these investments aligned with the key priorities to advance our growth. I'll now turn it over to Eric for his closing comments. Eric?

Thank you, Chris. In closing, 2024 was a year of great execution and progress by all of our team members and partners. The bar is high, but we are positioned for another great year in 2025. Our team is starting the year focused on the three key priorities I outlined at the outset of our call, We believe these will deliver value for patients and all of our stakeholders in the near and long term. And we will look forward to keeping you informed as we reach key milestones throughout the year. Now, let me turn the call over to Victoria for Q&A. Victoria?

Thank you, Eric. Chloe, we can now open the lineup for the Q&A.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask the question, please press start and the number one on your telephone keypad. And if you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. And also as a reminder, we ask that you limit yourself to one question. And if you have another question, please rejoin the queue. We will now take the first question from Malcolm Rama from J.P. Morgan. Your line is open.

Hi, this is Malcolm Kuno on for Anupam Rama. With the expanded FOSPARI label, what are you seeing in terms of patient uptake?

Thanks, Malcolm, for the question. I will turn that one over to Peter.

Yeah, I think the most important aspect is what I called out in the prepared remarks is that we saw a meaningful increase in new patient start forms with 37%. But we also see that we have more use now in patients with lower proteinuria levels. And I think that makes sense, given that our accelerated approval was really focused on patients at risk of rapid progression, generally a proteinuria level of 1.5 grams per gram or higher. And in the full approval, you have no longer like a proteinuria threshold. we start to see that being reflected also in the patients that are being prescribed TILS-VARI.

Yeah, thank you, Peter. Malcolm, the only other thing that I would add is that we've seen a continued increase in the number of new prescribers, you know, particularly those that were waiting for full approval on that broader label. And so I think as Peter has discussed this in prior calls, it gives us great confidence that with that clinical experience, we're going to continue to see uptake as they find new patients.

Great, thank you.

Our next question comes from the line of Amil Devan from Guggenheim. Your line is open.

Great, thanks for taking my question and congrats on the progress. So just one and you touched on this a little bit in the prepared remarks, but just obviously might get a new competitor entering the IGAM space from Novartis. I'm just curious, maybe you can provide a little more just thoughts on how that might impact. Phil Sparey's uptake, how you sort of see the competitive dynamics evolving here over the next several quarters, especially if the liver safety monitoring, if there's a difference between that label and your label. Thank you.

Tom, well, thanks for the question. We remain very confident in the profile and the outlook for growth of Phil Sparey, and I'll hand it over to Peter to provide a little bit more comments on our assessment.

Yeah, thanks for that question. I believe you mentioned Novartis as a potential new competitor. Well, they're actually two. Top Halter was launched last year in the fall, and Q4 was the first quarter that we had Top Halter in the marketplace as well. Despite that, we saw that to be our strongest quarter till date, so we haven't seen much competition there. But it also makes sense because it's a different mode of action, and it's a different treatment category. I think what you may be alluding to is the potential approval of Atras and Tom that would play more in the same treatment category. And a couple of things I would want to say on that. Let me start with saying that it's good to have another company that is talking about the importance of endothelium as a bad actor in disease progression, in particular regarding kidney injury. When I look more specifically within the treatment category of foundational treatment, I am confident in the strong and differentiated filspary profile, both in efficacy as well as in convenience. The reason why is filspary is simultaneously blocking angiotensin as well as endothelin. And that consistent inhibition resulted in the impressive 50% reduction in proteinuria that we saw after nine months that largely sustained over the two-year period in PROTECT. Resulting in an improvement of kidney preservation year over year. We can talk about that full benefit of and how it translates into long term benefits. The new entrance will not be able to do that. There will be. Segmented to like the nine-month proteinuria label, as well as what I mentioned before, likely an initial label will be focused on the more rapidly progressive patients with proteinuria of 1.5 grams or higher. So I think we have a very strong profile. I would also say Filsari offers flexibility in dosing with the 200 and the 400 milligram that I don't think Atterson-Thom will be providing. So all in all, I feel very strongly where we are positioned, and yeah, more to come on this one once they may be approved for IGN probably.

Yeah, thank you, Peter. And Vamil, just to close out on the last part of your question with regard to REMS, I think we need to see what their label, you know, if and when approved, what that looks like. But regardless, for all of the reasons that Peter said, we believe that we have a very competitive profile and will be prepared for any scenario.

Okay. Yeah, thanks for taking the question. Thanks.

Thanks, Bumble.

Our next question comes from the line of Laura Chico from Wedbush Securities. Your line is open.

Hey, guys. Thanks very much for taking the question. This is Dylan. I'm for Laura Chico. So realizing the FSGS launch will change the trajectory of overall Phil Safari revenue, when might you be in a position to provide guidance for the IGAM setting?

Yeah, Dylan, thanks for the question. So we've been very pleased with the uptake, particularly since full approval in Q4. With that said, it's really just one quarter, and we're pleased to see how the first quarter is starting. But we do want to make sure that we have, you know, a bit more, you know, data points to be able to estimate that. So it's something that we consistently are looking at and will provide further updates along the way. But at this point, we're not in a position to provide guidance, but certainly are looking at that.

Thank you. Thank you.

Our next question comes from the line of Marie Raycroft from Jefferies. Your line is open.

Hi, this is Farzinan from Marie. I wanted to ask on the BD side, like you have noted continued BD to diversify the pipeline. So what should we expect this year? Like, will you be looking to potentially in-license assets in the rare renal space, or will it be more focused on the FSGS launch?

Yeah, thank you, Farzan. And, you know, I would say that our teams certainly are looking. It's an exciting time. I've talked about, you know, this area really is a renaissance within the rare renal space. And, you know, we believe that with the capabilities, the experience, and the infrastructure that, you know, we certainly could add value to other potential medicines that are in development. So, something we're looking at. Always hard to be able to provide specifics on timing, but certainly it's aligned with our strategy. With that said, our number one priority is to make sure that we are able to bring PhilSparry to patients with FSGS. And so, our preparation for the launch will remain our top priority. while in parallel looking at opportunities to diversify and bring potential therapies to patients that don't have any.

Okay, thank you.

Thanks, Farzan.

Our next question comes from the line of Tyler VanBuren from D.J. Collin. Your line is open.

Hi, this is Greg on for Tyler. Thanks for taking my question. So assuming the TILSPARI REMS modification will be approved at or around the PDUFA date, What steps remain towards the ultimate goal for full removal of the REMS, and is there precedence for this happening?

Sure. Thanks for the question, Greg, and I'll turn that one over to Bill.

Thanks. Yeah, the first step, as you noted, we'll learn our outcome this summer, the end of August, with our major REMS modification requests where we're looking to change from monthly to quarterly monitoring in the first year. The agency had specified when we discussed this in the past, and from a post-marketing perspective, they wanted to see a certain amount of exposure, about 3,000 patients over two years, in order to have enough data to entertain the discussion around full removal of the REMS. We're not at that point, but we're well on our way and look forward to that in the future. But as I said, the first step is changing the frequency from monthly to quarterly upon initiation.

Great. Thanks again, and congrats on another successful quarter.

Thank you. Thank you, Craig.

Our next question comes from the line of Joseph Squartz from Learing Partners. Your line is open.

Thanks so much. Based on reported sales and the current price, it looks like there might be around 2,000 patients on PhilSparry at the end of the year. And I think the company has received over 3,600 PSFs since the beginning of the launch. So I was wondering if you can provide us with any additional context on the conversion of PSFs to patients on therapy as well as the discontinuation rate. Can you help us envision, you know, what the difference between these figures is accounted by?

Joe, thanks for the questions, and I'll turn that one over to Peter.

Thank you for for that question. It's a good question. I think overall, I would say that we have a very strong fulfillment right now. If you look at our growth trajectory in patient's thought form equals quite nicely what we see in revenue as well. And I think that speaks to. The improvements we have made in our fulfillment last year about a year ago or a year and a half ago. We also committed like, early on in the launch. there was a pocket of patients that required a little more handholding in the REM certification process. In particular, as in the first 60 days, we weren't able to promote filspary and basically only had the label or the packet inserts. Now that we have overcome that, and especially now with the full approval where you have the full data packets, both from efficacy as well as safety packets, To have that conversation with patients and make them more comfortable about the treatment option for Filspari, we have seen really strong improvement in our fulfillment process. Having said that, you also have to realize you never get to 100% conversion of all patients' dark forms. I mean, even in retail, and we have done some research on that, even in retail nephrology products, you have about 85% to 90% of the patients that are picking up their medicine. the rest never pick up the medicine. So there is a certain leakage point. I think we have identified where those leakage points are and were, and we have made good progress on that. So I will expect that you will see continuation of stronger transition of patient start forms to paid performance.

Yeah, thanks, Peter, for that. And Joe, the only thing I would add just as another data point for your question around discontinuation rates, we continue to see very high compliance and persistence rates. So this is not a medicine where you see a disproportionate number of patients that discontinue once they start. So really the focus, as Peter talked about, is having the teams get the patient from patient start form onto therapy. We've seen really good progress, as Peter talked about. Once the patient's on, there's such a consistent positive experience, including, as we saw our label expand, We've been very pleased with that part of the launch. Thanks for the call. Thank you.

Our next question comes from the line of Lisa Baker from Evercore. Your line is open.

Hi there. Thanks for taking my question, and congratulations on all the progress. I have a couple of questions, actually. First of all, can you just give us a sense of growth to net and how you're thinking about it for this year?

Sure. Chris, why don't you take that one?

Sure. So, Lisa, as you might remember, we had previously guided for last year for Phil Spari to have gross to net be in the mid to high teens with the highest part of that occurring in the first quarter and then evening out through the balance of the year. This year, we're expecting it to be a bit higher. And so I think the best way of thinking about that is probably high teens to low 20s. And it's going to be a similar phenomenon where we expect the greatest impact early in the year and for it to be a little bit more even through the balance of the year. So hopefully that helps.

Okay, great. And how is it going in the beginning of the year with kind of having to – are the patients required to renew any prior authorizations or anything like that? Should we expect any bumpiness in the first quarter for that reason?

Yeah, great question. Peter, why don't you take that one?

Yeah, we haven't really seen that to be an issue. I mean, you're right, you have the renewals of payer plans, in particular in the beginning of the year, but we haven't really seen an impact on that so far. I would say what I mentioned in the prepared remarks, I'm in particular very pleased with how payers are already adopting the broader label for filspiry, some of them completely removing proteinuria levels. So I think we make really good progress, but to your specific question on renewal criteria, we haven't really seen an impact there.

Okay, great. And then finally, I wanted to ask about sort of more about the future, and we can even go beyond the initial rollout of some of the new forthcoming April and April bath compounds. But when they do get a full label and we're kind of in that era, how are you thinking about but the potential use of two branded medicines, is that something that you think is going to be widely accepted? Because, you know, ideally you'd want to be on a combination of Silspari or some of these newer mechanisms. Or do you think you'll have to step through one to the other? Or will there be some other criteria? Will you have to pick and choose between these? I'm just curious how you're thinking about it and if you've gotten any feedback on that point from PEAR specifically. I know physicians want to use all the best drugs, so That's less of a concern. I'm kind of really focused more on the payers.

Yeah, it's a really good question, Lisa. And this is one that we've been very consistent over the years that we've been predicting that this is going to be the future of IGAN treatment. And, you know, that's largely why we, you know, have generated data on combinations. You know, we're eager to see, you know, the ability to be able to look at combinations in, you know, newer immunosuppressants. With that said, I'll turn that over to Peter to get, you know, comments on what we're seeing to date in the market, as well as feedback from payers.

Yeah, thanks, Lisa. It is a really good question, and I think there will definitely be excitement across the nephrology community to combine different treatment modalities, in particular when it's a different treatment category. So if you read the Cadego guidelines, that's something that they're advertising as well. So it's really about the payer to your point, like what is the payer accepting with regards to combination. In that regard, I am in particular very confident with our formularies and payer inclusions already, also given that we really have the gold standards of how payer evaluate medicine. Payers generally want to see like direct, head-to-head, maximally dose comparison studies. And that's exactly what we have. On top of that, Filspari is priced for broad access. I was talking about the broad patient population that Filspari is applicable to. We have priced accordingly. So it's up to the new entrants how they price that and what evidence they will bring to the table to see how they may be combined with Filspari. I'm very pleased and very confident with our payer inclusion criteria so far. And to Eric's point, we have been planning for this.

Thank you.

Thank you.

Our next question comes from the line of from City Group. Your line is open.

Oh, hi. Thank you. Just a couple things. So on the REMS, if you do get the shift to the quarterly, Is it the expectation that that would flow to the label on FSGS, or that's a different conversation? If you could answer that, please.

Yes, I can answer that. So we would assume that FSGS will have the same labeling and same REMS, you know, if and when approved. So whatever happens at the time of approval would carry through.

Okay. And then assuming it does go to quarterly, at that point, the next step on the pathway would be, to nothing or to could it be like annually? How do you foresee that going forward?

Yeah, our plan has always been two-step process, one to modify and second to remove. So assuming we were able to get that to quarterly, the next step would be removal of the rents.

Okay. And then I may have answered this one in the past, but on pricing, given the dosing increase with FSGS, is it fair to assume it's simply going to flow to be twice the price, or is there going to be some economies of scale there that's incorporated in the pricing discussion on FSGS? Thanks.

Yeah. So, I mean, first of all, our pricing strategy is really to ensure broad access, because like IG nephropathy, we are assuming that the broad community of FSGS patients could benefit from PhilSparry if approved. So, you know, certainly something we'll look at. It's premature for us to talk in specifics, but I will have Peter talk a little bit about, you know, what the dynamics are that are different in FSGS, including dosing.

Sorry about that. I had to unmute myself. Yeah, I think generally, I mean, the value proposition is probably different in FSDS as well, because it's a different patient population. And as I mentioned in my prepared remark, this is the most progressive glomerular disease, and patients with the highest unmet need. So the value proposition is higher here as well. But to the point, we have double the dose and with linear pricing that may potentially end up to double the price as well. We're really focusing on what the value proposition is. This is something we don't start from scratch. I mean, we were initially planning for FSDS as our first indication, so a lot of the work has been done already. But now we are refreshing it and rebuilding a value proposition for a potential FSDS launch.

Gotcha. Thank you very much. Thanks, you all.

As a reminder, we ask that you limit yourself to one question. And you have, if you ever have another question, please rejoin the queue. Our next question comes from the line of Prahar Agrawal from Kantor. Your line is open.

Hi, thank you so much for taking my questions. So there are a lot of competent readouts in the IGAN space coming over the next one to two years. Can you give your perspective on how long will the accelerated approval path in IGAN will remain open since two drugs have full approval now? and what will the competitors need to show to get extended approval? Thank you.

Yeah, it's a really good question, probably one that you might not be satisfied with our answer because it's very difficult for us to predict. With that said, Bill, I'll turn it over to you for any potential thoughts.

Yeah, I appreciate the lead in, Eric, because it's us speaking for the FDA, which isn't where we can speak with authority. But at some point, the agency will make the judgment that the unmet need in IgA nephropathy and for that patient population has been met sufficiently to the point where accelerated approval is no longer a viable pathway. I do know that Dr. Aliza Thompson has said at the podium publicly, this is not a pathway that will stay open indefinitely for IgA nephropathy. At some point, they are going to make that distinction. We have three drugs approved that has certainly increased in the armamentarium that physicians have to treat this disease. I think certainly you've got some of the BAF-APRIL B-cell initiatives that are on an accelerated approval pathway, but I don't expect that too many of those will be able to get there. Like you, we're watching to see when that change occurs.

Thank you. Thank you, Pedro.

Our next question comes from the line of Mohit Bansal from Wells Fargo. Your line is open.

Hi. This is Sadia Rahman. I'm from Mohit. Thanks for taking our question. So on the point about the expanding prescriber base after the full approval in IGAN, can you give some sense of the number of IGAN patients on average that these new prescribers treat? I know this is a highly fragmented market, so I imagine you've targeted the high prescribers earlier in the launch. So you're trying to understand if there's potentially a lot of depth to the new prescribers. that are coming on now. Thanks.

Sure. Thank you all. I'll turn that one over to Peter.

Yeah, as we have mentioned in the past, we target about 6,000 nephrologists out of, I would say, a U.S. universe of about 10,000. That 6,000 nephrologists approximately treat 85% of the IgA nephrology patients in our estimation. To your other point, so you have to go quite broad to cover and get access to all the patients. I would say in general, many of those nephrologists see 5 to 10 IgA nephropathy patients in their practice, but it depends on, you have like higher volume officers as well, and yes, we are targeting those officers more heavily. But overall, you have to cast a broad net across both academia as well as the community of nephrologists.

Yeah, thank you, Peter, for that. One thing that I would add is, unlike many other rare diseases, you don't see the type of referral patterns, and therefore, you don't see as much concentration of patients being treated within a small number of centers. There's quite a breadth, which I think, you know, really explains why Peter's team is going quite broad within the nephrology community, quite different from other rare diseases. And I think, you know, if we take a step back, what that signal should signal is that we have a substantial opportunity to continue to grow by reaching many more of these patients in the years to come.

Thank you.

Thank you.

Our next question comes from the line of Greg Harrison from Scotiabank. Your line is open.

Hey, good afternoon. Thanks for taking the question. Could you speak to the potential impact commercially from a REMS modification as far as any patients who maybe can't comply with the liver monitoring currently and thus aren't receiving Tilspari and may initiate treatment after the REMS potentially becomes less onerous?

Greg, thanks for the question, and I'll turn that one over to Peter.

Yeah, thanks, Greg. It's a good question. I would say, I mean, REMS has not been an obstacle for Phil Sparry so far, especially if you compare the Phil Sparry performance relative to recent benchmarks. I think we outperformed those benchmarks, even though they didn't have REMS and we have REMS. to your question, like what is the additional upside if you have an easing or a modification of the REMS, what would it do? I would say the main impact that I am expecting is that physicians are broadening their perspective, what patients could be eligible for filspirase and what patients will be compliant to monthly monitoring as well. That's the only thing that I sometimes hear from physicians, that they have quite a preconceived notion, like what patients would be compliant with that monthly monitoring. If you go to three monthly from the very beginning, that would broaden the patient selection for physicians, and that's where I really see the opportunity.

Great. That's helpful. Thank you. Thanks, Fred.

Our next question comes from the line of Jason Zemanski from Bank of America. Your line is open.

Good afternoon. Congrats on the progress and thank you so much for taking our question. I was hoping you could provide some additional color regarding your prelaunch activities in FSGS. I know Julia mentioned expanding awareness of proteinuria as a biomarker, but based on parasol, there seemed to be pretty broad support, at least maybe from the academic providers. Curious if you see this as a bottleneck in the more broader community and I don't know any other potential headwinds or I guess opportunities to maybe smooth adoption out.

Sure. Thanks for the question, Jason. I'll first hand it over to Jule to talk about what her team will be doing, and then, Peter, you can talk about what your team will be preparing for.

Yeah, thanks for that question. I think it is really important to continue to reiterate, not just with academicians, but across the spectrum with private practitioners, that proteinuria is in the biologic pathway for progression to kidney failure. We know that. That's how we treat our patients. But just to reiterate that EGFR is noisy, and over the short term, it can be challenging to show a treatment effect, even if you might see a good relationship over the long term. And so, it really is reinforcing that if you can reduce proteinuria, similar to what we saw in both duet and in duplex and consistent with Parasol, that you can reduce the rate of loss of kidney function and minimize rates of kidney failure. That's a key aspect of what we're educating around and what we need to continue to reinforce, as well as education around our data. And I'll turn it over to Peter for a continued discussion.

Thank you, Joanne, and thank you, Jayton, for that question. As I mentioned earlier, FSGS treaters are largely the same prescriber base as soul spy readers, like over 80% overlap in those physicians that we are targeting today. So there is a high familiarity and brand awareness for felspari already among those physicians, and many already have the experience with felspari as well. I think most importantly is that we are building upon our established organization, allowing for a rapid uptake in FSDS while also continuing our growth trajectory in IgA nephropathy. I talked to you about the physicians already. I think we have well covered there and the best pre-marketing for FSDS is really getting experience with fosfari and IgA nephropathy. From a patient perspective, we recognize that there are different patient communities, and so we really focus on, like, what is the patient journey and what can we learn with regards to intervention points, and that is the work that we are assessing right now. And then the third aspect is really the payer and the health economic assessment that I was talking about earlier, really building out the value story for FSDS. And I mentioned earlier, a lot of this work has already been started as we were planning for FSDS as the initial indication originally. But I think in summary, we will be well prepared in a time of approval for FSDS by the end of the year.

Got it. Appreciate the deep color, guys. Thanks. Thank you, Chetan.

Our next question comes from the line of Alex Thompson from Stifel. Your line is open.

Hey, great. Congrats on the update. I guess on shifting gears to PEG to BAT and ACE, could you talk a little bit more on sort of the progress that you've made on restarting the phase three and when we might learn more about the timelines there? Thanks.

Certainly. Thank you. I appreciate the question on PEG to BAT and ACE. Bill, I'll hand that one over to you.

Certainly. As you're aware, we work with CDMO partners externally on the manufacturing of recombinant enzyme. And the scale-up challenges that we have observed are ones that our partners have seen before and have worked through before. And with that, the path has been pretty clear. We're pleased with the progress on the necessary process improvements that we're seeing in the manufacturing scale up to date, and we expect to restart enrollment in Harmony in 2026. I don't have a specific point in the calendar to point to where we'll have more specificity that's really going to be data driven and how the experimental data comes from those efforts on scale up.

Do we have any other questions?

Our next question comes from the line of Ed Arcee from HC Wainwright. Your line is open.

Great. Thanks for taking my questions and congrats on another strong quarter of progress here. So try to get three in here quickly. First, with regard to FSGS, you know, obviously this pathway now has rather quickly presented itself based on the findings from Parasol. And so, first question is, if it comes to pass that there is an adcom, what kind of specific questions would you expect the panel to sort of challenge, you know, the findings from Parasol on, given that that's the basis? And then secondly, I know we've talked about this a little bit on the call, but I'm just wondering, Regarding, you know, pre-commercial activities for FSGS, you know, obviously this would be the first approved drug. And you've talked about the 80% overlap in patients. So some strong structural components to the launch itself. But just wondering what specific activities would you be focused on to really ensure rapid uptake right from the start? And then lastly, given that overlap between the two indications, I'm wondering how much additional SG&A investment you would be considering around the end of the year if that's when the launch happens. Thanks so much.

Okay. Thanks so much for the questions, Ed. I'm going to take them in opposite order. And then I'll leave the adcom question for Jula. The SG&A will be incremental. We have the infrastructure, and so, you know, a lot of the readiness is there. There will be some variable spend, but that's largely going to occur, you know, once we are and if we are approved. With regard to precommercial activities, it's a lot about planning. There is, we do not promote preapproval, so it's really about preparing. and understanding the journey of the patient and the needs of the physicians, as Peter outlined. But, you know, we've got a team in place. They're in the field. They've got a job, and that is to identify and treat additional patients by Gannon. As Peter said, that's really going to help in, you know, establishing that trust, the relationships, and the profile of Phil Sparry. So that really is largely the activities. And I think, you know, one thing we've mentioned in the past, but I think it really bears repeating on this question, is nephrologists know that there is an urgency to treat patients with FSGS. It's very different than how they were trained on IGAN. There is a desperation for something to be approved in FSGS. So I think that that's a, you know, a dynamic that is going to play out if we are approved. With that, I'll turn that over to the question about the ADCOM questions to Julo.

Well, thanks for the question, Ed. I think a big part of an ADCOM is education and as well as helping the agency to understand the overall benefit risk of any potential new therapy. And so some of the key questions that will be asked is similar to what's already been done within parasol is what is the clinical meaningfulness of the magnitude of protein reduction that was seen with sparsen and what does that translate into and realize that when you have an adcom, it's It's not just for the nephrology community and the FDA. It's also other stakeholders who have patients there. So, it gives the agency and us an opportunity to discuss all of the evidence and data and hear back from key stakeholders, including patients.

Great. Thanks so much. Thanks, Ed.

Ladies and gentlemen, this concludes the question and answer session of today's conference call. I'll hand the call back over to Victoria.

Thank you, Chloe, and thank you, everyone, for joining our fourth quarter and full year 2024 financial results poll. We look forward to seeing everyone at the upcoming spring conferences. Have a great rest of your day.