Verona Pharma plc

Good morning everyone and welcome to Verona Pharma's third quarter 2024 financial results and operating highlights conference call. At this time, all participants are in a listen-only mode. Earlier this morning, Verona Pharma issued a press release announcing its financial results for the three months ended September 30, 2024. A copy can be found in the investor relations tab on the corporate website .veronafarma.com. Before we begin, I'd like to remind you that during today's call, statements about the company's future expectations, plans, and prospects are forward-looking statements. These forward-looking statements are based on management's current expectations. Statements are neither promises nor guarantees and involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from our expectations expressed or implied by the forward-looking statements. Any such forward-looking statements represent management's estimates as of the date of this conference call. While the company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. As a reminder, this conference call is being recorded and will remain available for 90 days. I'd now like to turn the floor over to Dr. David Zaccardelli, Chief Executive Officer.

Sir,

you may begin.

Thank you and welcome everyone to today's call. We are extremely pleased to be with you today to share our remarkable achievements in the third quarter highlighted by the launch of O2Ver. With me today are Mark Hahn, our Chief Financial Officer, Dr. Kathy Rickard, our Chief Medical Officer, Chris Martin, our Chief Commercial Officer, and Dr. Tara Rowe, our Chief Development Officer. The third quarter was exceptional for Verona Pharma, marked by the U.S. launch of O2Ver for the maintenance treatment of COPD and continued progress on our clinical development programs. First, let's review the outstanding launch of O2Ver, which is grounded in its broad COPD indication and the compelling benefits O2Ver provides to COPD patients. After just seven weeks, net product sales were $5.6 million for the third quarter. We are excited as demand for O2Ver continues to escalate with net sales for October exceeding the third quarter. Now let's review some key launch metrics. Through the end of October, only 12 weeks after fully launching O2Ver, more than 5,000 O2Ver prescriptions have been filled with more than 2,200 unique HCPs prescribing O2Ver. Our launch efforts continue to focus on promoting O2Ver to the highest prescribing 14,500 HCPs. In 12 weeks, approximately 30% of our 2,500 Tier 1 HCPs have prescribed O2Ver. As a reminder, Tier 1 HCPs write on average 150 COPD maintenance treatment prescriptions per month. We also continue to see that once an HCP prescribes O2Ver, they increase their prescribing to more patients in their practice. We are impressed by the breadth and depth of prescribers and prescriptions this early in the launch. Importantly, HCPs are prescribing O2Ver across a broad range of COPD patients, including background single, dual, and approximately 50% on triple therapy. This broad utilization across all patient types is consistent with our market research and continues to highlight the significant unmet need across the COPD patient population. Initial feedback from both patients and healthcare providers about the potential of O2Ver to deliver a meaningful impact against COPD, regardless of disease severity and background therapy, is extremely encouraging and is also supported by the early refill data. Our commercial activities to engage HCPs continue to increase month over month. Through the first 12 weeks of launch, we have reached more than 90% of our Tier 1 and Tier 2 HCPs through in-person or digital promotion. Our speaker programs with HCPs continue to accelerate and we expect to have approximately 120 programs completed by the end of 2024. We recently presented new analyses from the Phase 3 enhanced studies evaluating O2Ver in COPD. Presentations at CHEST and ERS conferences highlighted subgroup and pooled efficacy and safety analyses from the enhanced trials, as well as the impact of O2Ver on COPD-related healthcare resource utilization and the unmet need in COPD based on real-world claimed data. At CHEST, our team interacted with approximately 1500 HCPs at our medical and commercial booths for O2Ver, highlighting the high level of interest in O2Ver from HCPs. While it is still very early in the launch, we are extremely encouraged by the strong start to the U.S. commercialization of O2Ver. O2Ver is the first inhaled COPD treatment to provide both bronchodilation and non-steroidal anti-inflammatory effects, and we are confident that it can redefine the COPD treatment paradigm. We are also pleased to report the Centers for Medicare and Medicaid Services recently approved a permanent product-specific J-code for O2Ver, which will be effective in January 2025. Alongside our successful O2Ver launch, we initiated two new Phase II clinical programs during the third quarter. In September, enrollment began in a Phase II dose-ranging trial supporting a fixed-dose combination formulation with -c-ventrin and glycoparalate, ALAMA, for the maintenance treatment of COPD delivered via a standard jet nebulizer. The dose-ranging trial is a randomized double-blind placebo-controlled one-week crossover trial to assess lung function, safety, and the pharmacokinetic profile of glycoparalate delivered via nebulizer in approximately 40 subjects with COPD. Following identification of an appropriate glycoparalate dose range, a Phase II trial assessing the fixed-dose combination of -c-ventrin and glycoparalate will be conducted. Also in September, enrollment began in the Phase II trial to assess nebulized -c-ventrin in patients with noncystic fibrosis bronchiectasis. The randomized double-blind placebo-controlled parallel group trial will enroll 180 subjects with a recent history of pulmonary exacerbations. The trial will assess the effect of -c-ventrin 3 mg twice daily on the rate and risk of pulmonary exacerbations symptoms and quality of life. To ensure robust powering, the trial is event-driven with all subjects treated for at least 24 weeks and until the required number of exacerbation events are observed. Finally, turning to our global strategy, New Onc Pharma, our development partner for -c-ventrin in Greater China, announced it has completed enrollment in its pivotal Phase III clinical trial evaluating -c-ventrin for the maintenance treatment of COPD in China. New Onc Pharma expects to provide results from the pivotal Phase III clinical trial in 2025 and we look forward to providing an update next year.

I

will now turn

the call over to Mark

to

review our financial results for the third quarter. Good

morning. The third quarter was an exciting one for Verona as we recorded our first sales of O2Bear. For the partial quarter starting in August and ending on September 30, 2024, we recorded O2Bear net product sales of $5.6 million. As expected, our specialty pharmacy partners are holding inventory at their contracted level of 2-3 weeks. Cost of goods sold related to O2Bear was $500,000 for the quarter ended September 30, 2024, which consisted of supply chain, post-approval production cost of inventory sold, and royalties payable to ligand. Recall that O2Bear was approved in June 2024 and prior to receiving FDA approval, costs associated with the manufacture of O2Bear were expensed as R&D expense. Research and development costs were $10.6 million for the quarter ended September 30, 2024, compared to $3 million reported for the third quarter of 2023. The increase was primarily due to a $7.8 million increase in clinical trial costs as we initiated two Phase II trials over the course of the quarter. Selling, general, and administrative expenses were $35.2 million for the quarter ended September 30, 2024, compared to $13.4 million reported for the same period in 2023. The increase was driven primarily by a $9.7 million increase in people-related costs and $2.8 million in share-based compensation primarily related to our field sales team. In addition, marketing and other commercial-related activities, including travel, increased by $7.5 million and professional and consulting fees, information technology costs, and other related support costs and created by $1.6 million as we continued to build out our organization. For the quarter ended September 30, 2024, net loss after tax was $43 million, compared to a net loss after tax of $14.7 million for the same period in 2023. This represents a loss of $0.07 per ordinary share or $0.53 per ADS for the quarter, compared to a loss of $0.02 per ordinary share or $0.18 per ADS for the third quarter of 2023. Finally, our balance sheet remained strong with $336 million in cash and equivalents as of September 30, 2024. With the cash currently on hand and potential future access to the remaining $425 million under the Oak Tree facilities, we expect to have sufficient runway through at least the end of 2026 as we continue the commercial ramp of O2 bear in the U.S. and execute in our two ongoing Phase II clinical trial programs. I'll now turn the call back

over to the operator for the Q&A.

Ladies and gentlemen, at this time we'll begin that question and answer session. To ask a question you may press star and then 1. To withdraw your questions you may press star and 2. If you are using a speakerphone we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again that is star and then 1 to join the question queue. And our first question today comes from Andrew Tsai from Jeffreese. Please go ahead with your question.

Hey, good morning. Thanks for taking my questions and congrats on the strong launch and the strong execution. First question is the data point around October net sales exceeding Q3. So does that mean we're run rating at at least 17 million for fourth quarter without considering any type of growth in November and December? Or should we start to think about some new variables that could come into play like holiday period or patients starting to drop out? Or do you think the sheer volume of patient ads can offset any type of headwinds like these discontinuations? Thanks. Good

morning Andrew. Thanks for the question. Yeah, so, you know, clearly we're not providing any guidance for Q4. I think, you know, your math stands as it is. At this time we don't see any reason or rationale for any slowdown in, you know, the number of patients and the interest and the acceleration that we've seen in October. And so we'll of course closely monitor it and continue our efforts as we have in the past several weeks. So, you know, we look forward to a continued acceleration of use of O2VAR. Clearly there's been a lot of interest as has already been demonstrated. A lot of need as we've talked about in the past for an additional novel mechanism like O2VAR and COPD. And we continue to get incredible feedback from physicians and patients for that matter. Really, you know, looking forward to utilizing O2VAR in their treatment paradigm. So we're very excited about what has occurred in this very early part of the launch over the initial 12 weeks and we expect that to continue.

Very good to hear. And then just as a follow up, 5,000 prescriptions filled through October. By chance, are you willing to disclose how many unique patients you have as of October and any other metrics you're planning to provide in the next earnings call?

Yeah, no, thanks. I think the best way to characterize it at this point is it's very fluid, as you can imagine, that patient adds are increasing week over week. You know, of the over 5,000, you know, of course, the majority of those are, vast majority of those are unique patients. Refills have started as they should, although very early on in that process. And some of the first patients are starting to be refilled from earlier in the launch. So I think, you know, it's best to characterize it as accelerating at this time. You know, there's, you know, a substantial number of patients that have been referred in over the past couple of weeks, as we expect. Those are continuing to continue to be processed and we expect the patient has to continue to grow.

Great. Congrats again.

Thanks, Andrew.

And our next question comes from Yasmin Roini from Piper Sandler. Please go ahead with your question.

Yep. Good morning, team. And congrats on a great quarter. I want to stick with the theme of Andrew's question. I guess it seems like things are progressing really well. But can we talk about past December into 2025? Like, should we be expecting that in the beginning of the year before JPMorgan? You could come out and provide, you know, some consensus or some guidance in terms of what revenue expectations are. I think it seems like you have had a great quarter, but there's just a lot of room trying to figure out how the next five quarters are going to go. So is there an opportunity to kind of help us understand, like, beyond fourth quarter what things are going to look like in 1Q, 2Q, 3Q? That's question one. Question two is, do you have any insight on who are, what are the types of patients that are being prescribed Odovera? We recently did a K-well call and shockingly found out that the doctor was noting that majority of his patients are on patients who fail triple therapy. So even if you don't have quantitative numbers, what are you hearing from the doctors in terms of how they're using Odovera? And then the third question is, like, where do you want to be in terms of physician outreach, you know, in the next, by year end, by mid-next year? Sorry for the sort of three-part long questions, and I'll jump back in the queue.

Great. Good morning, yes. Thanks for those questions. I'll sort of not take them in any particular order, but I first would characterize it as I mentioned during the call. The, you know, Odovera is being prescribed broadly across all patient segments, including patients on background single, dual, and triple therapy. As we expected, with regard to triple therapy, nearly 50% of the prescriptions are on page for patients that are on triple therapy. So, you know, I think we're very encouraged by the breadth of prescribing across all patient types. And as we expected from our market research, that there was keen interest in using Odovera in patients who were on triple therapy and still needing improvement. We knew that was a large medical need, and that's how physicians are also utilizing it, as well as in other patient types earlier on in the treatment paradigm. With regard to forecasting, I think it's a little premature at the moment to review it. I think we'll need to assess the continued launch dynamics through the fourth quarter, which we will. I think you've seen historically, we are very transparent and we'll provide you the guidance the best we can while not getting ahead of ourselves and making sure that we characterize it properly. But, you know, we're very encouraged, very excited. And as you can see, there's great interest in utilizing Odovera. And so we expect 2025 to be an enormous year of growth and utilization of Odovera in the treatment of CRPD. And we'll look to characterize that. I guess I'll turn it over to Chris on maybe where we'd want to be in outreach over the coming quarters.

Hello, Yaz. Thank you for the question. I think, you know, when we think about physician outreach, you know, we continue to focus on our Tier 1 and Tier 2 physicians. You know, those, as Dave mentioned on the call, are 14,500 doctors, give or take. And on average, the Tier 1 is right about 150 prescriptions and the Tier 2 is around 50. We want to continue to reach them and increase our frequency against these customers as we move into Q4 and into Q1. And one of the things that we've seen early in launch is as we increase the interactions we have with these physicians, their ability and willingness to adopt Odovera accelerates. And we believe that's an important aspect as we move into Q4 and Q1 and into 2025 is to continue to reach as many as we can, but also increase our frequency and the times that we call on them, not only with reps, but interacting with them through digital non-personal channels as well. We see this provide direct benefit to their increasing and their overall prescribing.

Thank you. I'll jump back to the queue.

Our next question comes from Ron Silverahu from HC Wainwright. Please go ahead with your question.

Thanks so much for taking my questions and congrats on all the progress. Really very impressive commercial metrics here. Firstly, I wanted to ask if you could comment on any emerging prescriber trends, particularly with respect to preferences in combination regimens that prescribers are expressing they have a predilection for with respect to end suspension. Are there specific existing modalities that they are preferring to pair end suspension with or are you really just seeing sort of no preference and the drug effectively being very broadly deployed without any underlying emerging trends at this point?

Yeah, I have good morning, Ron. Thanks for the question. Yeah, I would say it's really the latter. I think that what we're seeing is a prescribing across the spectrum of patients. As I mentioned, patients on single, dual and triple therapy with no particular stated interest in certain combinations or certain drugs or certain llamas or labas, but rather the classes as they're generally utilized interchangeably in practices. As I mentioned, there is a great interest, of course, using it on top of triple therapy as nearly 50% of the patients are on triple therapy currently. And we expected that again feedback from physicians is very positive and they're seeing, you know, again responses as they'd expect to in patients being treated early on in the launch. So again, very, very excited and really shows how much O2 there and a novel mechanism was needed in the treatment of COPD. And we're seeing it utilized again across the spectrum of patients. And again, currently a preference on top of triple only because that was, of course, the highest unmet medical need as those patients really have nowhere else to go in treatment. And if they remain symptomatic on triple, you know, O2 there is definitely being preferred.

Great, thanks. And then with respect to the clinical indications that you are now starting to pursue proof of concept clinical evidence for, in particular bronchiectasis. Can you talk a little bit about how the commercial experience with O2 there, increasing awareness of O2 there among prescribers, is likely to frame these additional opportunities and how you go about pursuing them? Have those prescribers who've effectively acquainted themselves with the product since it's been launched expressed an interest in the progress of those additional indications as the drug continues to move forward on fronts beyond COPD?

Yeah, no, thanks for the question, Ram. I think that, you know, our interest in using NC-Fentrin in non-CF bronchiectasis came from a number of avenues, one of them being an incredibly strong interest from KOLs, from physicians that, you know, as we consulted with them, it made great sense to them that NC-Fentrin's pharmacology as a PD3, PD4 inhibitor, as a bronchodilator and a non-steroidal anti-inflammatory could have great promise in bronchiectasis. And so clearly there's interest broadly from physicians in it. With that said, of course, you know, we're very focused on O2 there in COPD, you know, specifically on the commercial front. We will continue to progress NC-Fentrin in research and in clinical development for non-CF bronchiectasis as we are now progressing with our phase two study. I think, you know, we will all see how that looks, you know, in the future as, you know, that study ultimately, you know, because exacerbation is an endpoint and it's at least a 24-week trial, you know, you're talking about data probably well into 2026 at the moment, but let's get the trial enrolled and see where we're at.

Great. And then lastly, this is just an accounting question. You mentioned earlier that certain expenses associated with manufacturing product prior to launch have now been shifted into the R&D line, as it were. So I was just wondering if you could give us a general maybe qualitative breakdown of which expenses going forward are likely to be segregated into the R&D line versus the SG&A line. For example, the speaker programs. How are you accounting for those? Are there any expenses, in other words, that are associated with effectively commercial activities that you are going to continue to book in the R&D line item? Thanks.

Yeah, this is Mark. Thanks for the question. The numbers that I was referring to were specifically related to inventory production costs. And so before approval, those were expensed as R&D. You can imagine, since it's a low-filled sealed product, that the finished goods were produced after approval, so therefore put into inventory. But the API was produced before approval, and that would have been expensed as R&D expense. All the commercial costs, speaker programs, travel, etc., marketing programs, all get expensed in the period in which they're incurred as part of SG&A expense.

Great. Thank you very much. Congrats once again. Thanks, Ron.

And our next question comes from Tom Schrader from BTIG. Please go ahead with your question.

Thank you. Congratulations. Just looking at the physician number and the prescription number, it seems like you have a lot of people writing one or two prescriptions to try the drug. Do you know what they're looking for to get more excited? I guess the flip side is, I assume you have some power users. What do they tell you to refine your marketing pitch as to why they're already committed? So thanks.

Yeah, Tom, let me just make a few comments and I'll turn it over to Chris for more detail. I think it's, you know, yes, of course there are physicians who prescribe it one or two patients and want to see how it works in their hands and in their patients. So, I think that's a typical behavior that can be expected and that goes on. As you mentioned, there are also physicians which are, let's just say, heavy adopters and are prescribing it quite a bit within their practice as they've seen responses in patients and as they've had really a need in order to use O2VAR in their practice. So we're seeing the spectrum of that. I think it's also challenging to look at prescriber numbers and patient prescriptions and all of that because it's very fluid as I referred to in that. Just in the past couple of weeks, there are substantial numbers being written that are currently in process on the payer side as well as being adjudicated and make sure that they're going to be filled and going through that process. So any numbers are out of date literally by the end of the day. And so we're trying to characterize for you and being very transparent about where we stand at the moment. But your characterization is also correct in how physicians look at it in their practice and maybe Chris, you can comment on it. Yeah,

Tom, as far as when we look at the breadth and depth of these prescribers, one of the things that's been very encouraging to us and very exciting to us is the fact that what we see is, like you discussed, there's many physicians that start writing off one or two, but we also see over the course of the launch in these early stages that once they write one or two, they're exposed to the patient feedback, they continue to accelerate their usage. I think that's something Dave mentioned in his opening comments. You know what we see is it's a combination of patient experience and also increased frequency and interactions with our field sales personnel. You know what we have to keep in mind that these doctors have been doing the same thing for 10 to 15 years and O2VeR as a novel mechanism and as an add on across all the spectrum of COPD patients that remain symptomatic in their practice is something that we have to continue to talk to them about. And they are extremely excited about what O2VeR can provide and then ultimately what O2VeR can do to help their patients. So I think what we see early on is very, very encouraging from adoption and then moving from one to two to what we would call believers and a doctor who's much more entrenched in using O2VeR.

I could ask a quick follow up on your infrastructure. How often are you giving patients drug for a month and what is your conversion rate looks like? How does all that stuff you set up seem to be operating?

Yeah, good question Tom. We're very pleased with how our infrastructure has been set up. I think one of the things that we talked about very early on was our data infrastructure. And the infrastructure to understand where these patients are and that has worked extremely well so that we're able to understand and kind of work to make sure that patient gets access to the drug. What I will say today is that, you know, of those 5,000 dispensed scripts, the majority, a significant majority of those are paid TRXs. You know, we were seeing very positive trends within the payer side. We talked about Medicare Part B and medical benefits and all those assumptions that we had earlier on are playing out to be very consistent and true to what we thought going into launch. So that makes us very encouraged about the systems and the process that we put in place.

Great,

thanks and

congrats again. Thanks Dan. Our next question comes

from Edward Thomason from VLK. Please go ahead with your question.

Good afternoon, good morning. Thank you for picking my question and good to see the prints today. Well done. Just a question please on the ramp up again. You mentioned specifically to Mark about inventory build. Can you just go talk through the dynamics there so we can better understand how that is playing out and then roughly if you can split it out, how much of the percentage of that of the initial sales we saw in Q3 is actually in market sales versus inventory build?

Thanks Edward. I'm not sure I quite understood the second part of that question. Can you repeat that part?

I just asked whether you can disclose how much of the sales that was reported in Q3 relates to inventory build versus actual in market sales.

Oh, okay. Inventory build in the channel, sure. So we haven't disclosed the number, but you can imagine that in a period of rising sales, they're building their inventory and holding about two to three weeks, depending on the different specialty pharmacy partner, it could be anywhere in that range, nobody more than three weeks on hand. And so you can imagine that we've been on the market for eight weeks at the end of September. So probably about a quarter or so of the inventory of the sales would be in inventory at that time.

Okay, that's good to know. And then a separate question actually relates to the IP. I noticed a slight change where you've now talked about a couple of additional patents pending, notably one that's on COPD exasperations. Can you just talk through how important that patent might be to commercial prospects? And does that patent relate just to end-defendant or specifically the use of PD3s, PD4s against COPD exasperations?

Yeah, so let me talk broadly, of course, you know, all our IP is, I think, very important as when you look at it holistically. We did file a number of patents, as you're referring to. The effect on exacerbations is one of them. After the enhanced results. Those are in process. We expect a number of them to be listed in the Orange Book over the coming year to year and a half as they continue to be prosecuted. All of those are important, again, in the totality of them, and they should be in protecting our intellectual property. So, you know, I think we were specific, of course, it's related to O2VeR and we'll see at the end of the day how the claims are agreed and constructed, but you know, all our patents are important. Of course, it's grounded in our polymorph patent and our formulation patent and the additional patents related to the effect of O2VeR are also critically important.

Okay, and one last question, if I may. Just, can you confirm how many patients from the enhanced clinical program have been converted into commercial prescriptions and has there been demand amongst existing user base for O2VeR?

Yeah, so we, when we ended the enhanced clinical trials, you know, patients were discontinued at the end of the trial. We did not have any long term follow up studies ongoing. So, as you know, that that time gap was substantial between the write up of the NDA plus the year of review at the FDA. So, we wouldn't know which patients that were in the trial may have come back and be on commercial O2VeR.

Okay, thank you very much for taking my questions.

Thanks very much.

Our next question comes from June Lee from Truist. Please go ahead with your question.

Hey, congrats on the strong quarter and thanks for taking our questions. Can you talk about reimbursement rate across government and commercial channels and the rate of prescription abandonment due to copay or any reason? And then congrats on getting the permanent J code. Is there any COPD treatment guideline or algorithm that is currently in the works that could be introduced soon, given the newly approved agents in COPD? Thank you.

So maybe I'll have Chris just sort of comment on our general payer dynamics.

Yes. So, June, when we think about reimbursement right now, the majority, I'd say 80 plus percent like we thought are going through a medical benefit either through Medicare traditional Medicare Part B or Medicare Advantage. And like we assumed at launch, these processes do not require prior significant hurdles for these patients to get. We're seeing movement within that medical benefit channel very, very, very well. What's also encouraging for us is across the pharmacy benefit side, which is commercial or Medicaid, we see patients having access to O2VeR as well. It does require a prior off within that process. Each plan is a little bit independent, but we're able to work through that with our SP partners in that process to get patients access to O2VeR. The other thing that we think is very encouraging is, and again, like we talked about early on in launch during during the setup was Of the patients that have been dispensed scripts about, let's just say, well over 80% of them have a copay of less than $10. So they have access to O2VeR and they have access to very low out of pocket cost as well. And I think this bodes very well for the brand long term as we think about how the launch accelerates. As far as your second question, which was regarding upcoming guidelines or conferences. We do know that the gold guidelines have a meeting in November. In a couple, a couple days at that that guideline meeting. We believe that O2VeR has a has an opportunity to be placed in there. As we've talked about in the past, there is a Disney a pathway. And an exacerbation pathway within the guidelines and O2VeR is unique novel mechanism of action with bronchodilation nonsteroidal anti inflammatory allows the Consensus Guideline Committee to be able to put O2VeR in a variety of different spots there. Again, we think this is only an upside for O2VeR. When we talk to physicians today. The big thing that we hear from our, our reps and the feedback back from HCP is that We have patients that have persistent symptoms, regardless of what therapy they are on single dual or triple background therapy. These persistently symptomatic patients need add on therapy. And O2VeR can be a very good choice for all these patients to provide additional bronchodilation and potential nonsteroidal anti inflammatory effects as well.

Great. Well, if I could add one more Chris, you mentioned previously that 50% of the use is as an add on to triple therapy, which is really interesting. Has that shifted at all in the first few months of launch?

No, June, it's still very early to kind of Say if there's been any shift. I think the thing that's very encouraging for us is we have add on use on top of Triple, but what you also see is about 50% of these other patients aren't on triple. So remember our market research early on said that O2VeR could be used alone or as an add on across all lines of therapy. And in these first through October, we're seeing that while we're seeing about 50% of patients on triple. We're also seeing patients on a single bronchodilator. We're seeing patients on lab ICS being added O2VeR. And that is all consistent with what we said in our early market research. And when I think about the health of a launch. And the health of what is the ongoing 2025 look like. Being able to say that, you know, some of that real work that we did early on about unmet need and patient utilization. We're seeing that play out in these first few months of launch and that gives us a lot of encouragement for Q4 and 2025. Really encouraging. Well, thank

you so

much.

Thanks, June.

Once again, if you would like to ask a question, please press star and then one to remove your questions. You may press star and two. Our next question comes from Nubalan Vrishayapan from Lost Capital Partners. Please go ahead with your question.

Good morning, Tim. Can you hear me? Yes, of course. Good morning. Alright, good morning. Thanks so much for taking our questions and congrats on the progress. So we have two. Firstly, there's been some developments in the COPD landscape. Most notably the recent approval of DUPICS. And so we are wondering, do you expect potential headwinds from DUPI as you think about penetrating the subsection of the COPD market comprising patients who are on triple therapy? And is there a motivation for prescribers to prioritize in-cephentrine over DUPI excluding the cost benefits offered by in-cephentrine?

Yes, good morning. Thanks for the question. You know, I think again, it's good for patients with COPD to have choices. You know, it was good to see the approval of DUPICS for the treatment of COPD. I think it highlights the need that exists for additional treatments. With that said, as you well know, you know, DUPICS addresses a relatively narrow patient population or narrow part of the market. Those patients who, you know, are on triple therapy have a history of exacerbations, have an elevated eosinophil count, and, you know, by Sanofi Regeneron's own estimation, it's in the US about 300,000 patients. So relatively modest number considering there are about eight and a half million patients who are on maintenance treatment. Because of the large patient population and unmet medical need across the board, you know, we don't see it impacting the commercialization of O2 there at all. And if anything, again, brings a spotlight on to the need for treatments in helping patients who are currently symptomatic and needing additional therapy. And even with that said, there is no specific rationale that we know of why O2 there could not be used with DUPICS and if the physician felt that that was the right combination for that patient as well. You know, completely different pharmacology mechanism of action, of course, addressing inflammation from multiple modes could be beneficial. And of course, you know, O2 varies bronchodilation and impact on improving lung function acutely and helping with dyspnea on a day in and day out basis is key to what's used as well. Which some of the other types of approaches don't have that acute bronchodilation. So again, I think it's very good across the board and doesn't change our view because again of the large patient population and unmet need.

Yeah, thanks for the clarity, David. And then maybe a second one and also the final one. You mentioned about two phase two clinical programs. I was looking at the clinical trials website this morning. And this website also included a trial actually you're currently recruiting for. It's the phase two study to study the effect of encephentrine on sputum markers of inflammation in COPD patients. So I understand the mechanistic implications of the study. Essentially, you wanted to see or know if encephentrine interferes with ACPGP and PGP pathway. So that aside, but I'm curious, you know, how you plan to integrate the study outcomes into your clinical and commercial strategy. Is this specifically to collect more data potentially focusing on exacerbation and then maybe develop an add on clinical program or this could potentially trickle down to your cystic fibrosis program in some other way. How are you thinking about it? Thank you.

Yes, I mean, I'll make a couple of comments and Tara, you can comment as well on the study itself. But, you know, I think, again, this study is relatively small, but very mechanistic in nature. Looking at the effects on sputum markers in sputum and continuing to understand the deeper pharmacology of encephentrine and specifically it's PD3, PD4 inhibition. And I think as we see the outcome of this study, we will then, you know, look at that carefully and then utilize that data in the best way we can to help patients moving forward, whether in COPD or another indications. And so with that, I don't know if Tara, you want to add anything else to that question?

Yeah, I think, you know, it's an eight week crossover trial looking at inflammation through the ACPGP pathway and also looking at inflammatory cell migration into the lungs. So, as Dave mentioned, we do expect that to be helpful to better characterize the pharmacology events of centrin in patients with COPD. Of course, we have already conducted a sputum study and healthy volunteers challenged with LPS and saw a nice effect across neutrophils, macrophages, eosinophils, and lymphocytes. And so we do expect to see similar data in COPD patients, particularly given the strong and good observation results from the enhanced program. All right, thanks so much

for taking my questions.

Thanks.

And ladies and gentlemen, at this time, we'll be ending today's question and answer session. I'd like to turn the floor back over to Dr. Zaccardelli for any closing comments.

Great. Thank you, everyone, for joining us on today's call and for your questions. You know, in addition, I want to thank our shareholders for their support. And especially the dedicated and talented team at Verona, Burma for their work and commitment. We are extremely excited about the launch of O2VAR and the advancement of our two phase two trials as well. And we look forward to updating you on future calls and look forward to seeing you at conferences as well. Thanks very much and have a great day.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.