Zogenix, Inc.

Good day and welcome to the Zogenics, Inc. Second Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Ritchie, LifeSci Advisors. Please go ahead.

Thank you, Operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer, Dr. Stephen Farr, Chief Commercial Officer, Ashish Sigurlicar, and Chief Financial Officer, Michael Smith. This afternoon, Zigenix issued a news release providing a business update and announcing financial results for the three and six months ended June 30, 2021. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Zigenix management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in Zorgenix's press release issued today and the company's SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast August 5th, 2021. Legenics undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now, I'd like to turn the call over to Steve.

Thank you, Brian, and good afternoon to everyone. I'm delighted to be here with you today to provide updates on what continues to be an exciting and productive period for Zygenix as we further ramp commercial activities for Pintepa Interbay Syndrome and advance our development programs for Pintepa and other areas of our pipeline that I will update you on later during today's call. First, I'd like to provide a brief update on our commercialization of Pintepa. We continue to achieve significant progress around the launches of Pentecla for Dravet syndrome in the United States and Europe, where we see continued meaningful quarter-over-quarter growth in the number of prescribers, patients on Pentecla, as well as net sales revenue. Pentecla addresses the large unmet needs of the Dravet community by enabling more patients to achieve significant and lasting seizure reduction. With physician interest remaining strong, we expect these positive trends to continue. As expected from our previous clinical trial experience, patient adherence to teplotherapy continues to be very high and discontinuation is low. Our first annual report submitted to the FDA confirmed that the fintepra rest process is working exceptionally well and that REBA echo monitoring continues to show no evidence of other heart disease or pulmonary arterial hypertension in any patient taking fintepra. During the second quarter, as COVID restrictions began to lift in many parts of the U.S., our field-based teams had more face-to-face physician visits than at any time since launch, leading to more physicians and their staff educated about the benefits of Pentapla and the REMS process. To this end, June represented the highest monthly number of new patients referred to the REMS program. This success in commercializing our first rare disease therapy, coupled with active preparations for our next phase of growth, has led to more complex demands on our business. I'm pleased, therefore, to announce the promotion of Ashish Sarkarika to Executive Vice President and Chief Operating Officer. Ashish has been a critically valuable member of our executive team and has established and grown our commercial teams for the launch of Futapla in the United States and in Europe. In this newly creative role, he'll be responsible for leading the company's commercial growth trajectory and global commercial strategic planning, as well as overseeing pharmaceutical operations, which includes our CMC, manufacturing, and quality functions. We look forward to further leveraging Ashita's expertise and talents as we pursue new markets and indications for support in Teflon and prepare to bring MT1621 to market. With that, I'll now hand the call over to Ashish for further commercial updates.

Thank you, Steve. I'm thrilled to assume this new responsibility and look forward to continuing to work with the exceptional team at Zojimix to advance our mission of transforming the lives of rare disease patients and their families. With that, I'm pleased today to provide additional color on our commercial age progress on commercializing Fentecla in both the U.S. and Europe. In the second quarter of 2021, we achieved 17.5 million in Fintepla net product sales, representing 42% growth over the first quarter of 2021. This includes Fintepla net sales of 15.5 million in the U.S. and 2 million in Europe. This significant sales growth reflects the enduring desire within the Dravet community to initiate and continue treatment with Fintepla. As Steve noted, with the more serious COVID restrictions easing in the U.S. and Europe during the second quarter, our sales and other customer-facing teams were able to steadily increase in-person visits with healthcare professionals. Towards the end of second quarter, our team was able to meet in person with approximately 45% of their target accounts, up from less than 20% in the first quarter. Our experience in the field is consistent with the recently reported figures in available industry data for the neurology sector as of June 2021. In the later part of the quarter, we saw a direct correlation between these visits and new patients starting therapy. By the end of second quarter, over 860 patients have been prescribed Funtepla and referred to the REMS program. This reflects 160 new patients referred to the REMS program in the second quarter. During the quarter, more than 125 patients began receiving reimbursed commercial therapy. The retention rate for patients remaining on Fentecla has been consistent with our experience in clinical trials and the expanded access program for Dravet syndrome, with approximately 90% of patients remaining on therapy by the end of June 2021. The number of unique prescribers increased by 22% to 290 over the first quarter. Consistent with prior quarters, it took approximately 2 to 4 weeks to fill a prescription from the time of patient's enrollment in the REMS program. Collectively, these are compelling metrics that indicate significant interest in CELDEPLA from physicians and patients, as well as its durable benefit for patients and their families. Going forward, we expect steady growth in each of these key indicators, especially if the impact of COVID continues to decline. We also continue to be extremely pleased with the payer coverage for Fentepla. By the end of second quarter, payers covering over 84% of U.S. lives have published a formal policy that covers Fentepla as per label and on parity with other anti-epileptic therapies. Having completed three full quarters since the launch of Fentepla in Dravet syndrome and reviewing the prescribing trends, we have decided to expand our prescriber call list to include majority of neurologists who treat refractory epilepsy in the United States. Our analysis indicated that almost a quarter of Dravet patients who have started Fentepla are treated by these neurologists in this expanded list. To cover the broader target list and further accelerate the adoption of Suntepla to treat drug-aid syndrome, we have begun an incremental expansion of our sales and other customer-facing teams in the U.S. In anticipation of submitting the supplemental MDA for LGS later this quarter, we are also finalizing our preparations. conducting various market research studies and advisory boards to best understand the evolving needs of the LGS community in order to refine our programs and go-to-market strategies. We are also in process of finalizing our health economic models and value strategies for LGS to help facilitate discussions with payers beginning in the fourth quarter. We anticipate that our launch preparation and the previously discussed sales and field team expansion will position us to launch Fencepla in LCS immediately upon approval in first half of 2022. Now transitioning to Europe, our first European launch of centepla and rabies syndrome in Germany is progressing well. More than 150 clinicians are now eligible to prescribe centepla and all clinical trial and expanded access patients have been transitioned to commercial therapy. In France, patients continue to prescribe centepla that we prescribe from Tevla under the Temporary Use Authorization, or ATU, until the ongoing reimbursement negotiations are finalized. We have made significant progress in our pricing and reimbursement negotiations in France and other major European markets, including Germany, the United Kingdom, and Italy. In conclusion, we are very pleased with our strong sales growth in the United States and continued substantial progress in Europe and the expanding access of Centraplan in other countries. We anticipate continued growth in all geographies and look forward to updating you further as the year progresses. Now, I'll turn it back to Steve for an update on our recent pipeline advancements.

Thank you, Ashish. Reinforcing the importance of Fintepla as a new treatment option, we were pleased to see a recent editorial in the journal Epilepsy and Behavior recognize Fintepla as setting new treatment standards for Gervais syndrome. Dr. Joseph Sullivan from UCSF and Dr. Helen Cross from the UK's UCL Institute of Child Health and President of the International League Against Epilepsy highlighted that the profound seizure reduction and positive effects on executive function achieved with the TAPA have also raised the bar for assessment of future therapies for refractory epilepsy syndromes. This brings me to an update on the progress of our late-stage development programs for Pentapla and MT1621, following a busy period of three highly positive Type B meetings held with the FDA in June and July. Most importantly, our pre-NDA meeting with the FDA for Pentapla and LDS was successful and collaborative in discussions around the details of our plan submission. We are on track to file a supplemental NDA by the end of this quarter. And as agreed by the agency, we will include the results from our single randomized control trial on two open labor extension studies to establish the safety and efficacy of Fintacla in LTS. In addition, our submission will include clinical pharmacology or pharmacokinetic studies and non-clinical studies related to carcinogenicity and chronic toxicology. The FDA also stated that the supplemental NDA may be eligible for priority review because it is part of the response to a written request under the Pediatric Research Equity Act or PREA. The agency will decide on priority review classification following submissions of our supplemental NDA. Looking at additional potential indications for Contepla, we recently held a positive pre-IND meeting with the FDA for our newest Contepla program in CDKL5 deficiency disorder, or CDD, to finalize the design and proposed endpoints for an upcoming pivotal trial. The FDA agreed that we should conduct a two-arm, fixed-dose Phase III trial to investigate the efficacy and safety of Fintepla in controlling convulsive seizure frequency at a dose of 0.7 milligrams per kilogram per day versus placebo. As a reminder, all of our prior Phase III trials into Ray syndrome LGS were conducted as three-arm studies as per agreement with the FDA. The FDA also agreed that a single randomized controlled trial could be sufficient to support a supplemental NDA in this indication, and no other pharmacokinetic or non-clinical studies are needed at this time. The IND has been submitted to the FDA, and we are advancing rapidly with the initiation of the phase three trial, which will include 40 patients per hour. We anticipate commencing enrollment later this year. This encouraging regulatory progress regarding our programs in LGS and CBD highlight the broad potential of Tentapla to have a meaningful impact on seizure burden in several severe infant and childhood onset epileptic syndromes. We are truly excited by the prospect of bringing this therapy to these additional patients in need. Finally, in July, we held a very successful meeting with the FDA regarding the planned NDA submission for MT1621 in the mitochondrial disorder, binding kinase 2 deficiency, or TK2D. FDA agreed with our submission strategy, including that no new additional studies, clinical or preclinical, are needed for the NDA. All studies for our regulatory submission are either completed or will be completed by the end of the year. Regarding our funding in the EU, we are working towards a regulatory meeting by the end of 2021. We are currently planning for an investor event in October, where we look forward to providing more detailed information on TK2D, the disease, and new NT1621 clinical data. which continues to demonstrate a highly significant survival benefit, and meaningful improvements in motor milestones, respiratory function, and eating ability in patients. In conclusion, I want to reiterate that this has been a tremendously productive course of physiogenics, as we further ramp commercial activities for Phentepla today, advance our larger indication LGS, and explore new applications for Phentepla, such as CED. In parallel, we are excited about the potential of NT1621, which expands our pipeline to address another rare, often fatal disease with no approved treatments. With that, let me hand the call over to Mike Preece from National Review.

Thank you, Steve, and good afternoon, everyone. Today, we issued a special release announcing our business and financial results for the second quarter ending June 30, 2021. total revenue during the second quarter of 2021, an increase of 37% compared to $13.7 million recorded in the first quarter of the year. This was a result of $15.5 million in product sales of Pentepla in the United States, $2 million in product sales of Pentepla in Europe, and $1.3 million related to our Japan partnership. Total net product sales of Pentepla of $17.5 million were an increase of 42% versus quarter of 2021. We recognized $1 million in total revenue for the three-month end of June 31, 2020, which consisted solely of the Japan collaboration revenue. R&D expenses for the second quarter were $36.6 million, an increase as compared to the $34.4 million recorded in the corresponding period of the prior year. SG&A expenses for the second quarter to the second quarter in June 2021, totaled $33.9 million, compared with $24.4 million for the second quarter of 2020. The increase of approximately $9.5 million is primarily driven by the continued investment related to the launches that are ongoing for Pintepla in the United States and in Europe. Net loss for the second quarter ended June 30, 2021, was $58.9 million, or $1.05 per share. This compares to a net loss of 53.3 million, or 96 cents per share, in the second quarter and in June 30, 2020. The end of the second quarter was a strong balance sheet with cash, cash equivalents, and marketable securities totaling $393 million. And with that, I'll now turn the call over to the operator to start our Q&A session. Operator, can you please open up the line for questions?

Thank you. To signal for a question, please press star 1 on your telephone keypad. Also, if you are using a speakerphone, please make sure your mute button is turned off to allow your signal to reach our equipment. Once again, it is Star 1 at this time to ask a question, and we'll pause to give everyone the opportunity to signal. And we'll take our first question from Paul Matias with Steeples.

Great. Thanks so much for taking my questions. Appreciate it. So, a couple on the commercial side, and then one follow-up on this REMS safety analysis, if you don't mind. On the commercial side, it looks like this quarter, the actual patient ads on reimbursed drugs lag slightly. The patient ads to the REMS funnel, which I think those really were a little bit closer, very close to each other the past couple quarters. Is there anything to that as it relates to kind of reimbursing delays or anything like that? And then separately, I was wondering if you could comment a little bit more on these trends you saw in June being your best month and whether or not that continued into July as well. And then I have one follow-up. Thanks.

Hi Paul, this is Ashish. I'll take both these questions and then wait for the second. So, in terms of the patient ads, the lag is purely because they are in the funnel and they are going through the process of either finishing vehicles or getting their insurance approval. So, I hope that gives you the color. And can you please repeat the second question again?

So you commented on June being the – or I think Steve commented on June being the best month in terms of adding patients to the REMS funnel. I was wondering if you could just say a little bit more about that and then whether or not that dynamic continued into July, if you're comfortable. Thanks.

Yes. So I think the dynamic purely depends on the COVID environment and – What we have seen in July is a steady increase in the patient numbers. And as you know, in July, we had at least a couple of weeks of COVID related closures and restrictions, and that has had a direct impact. So what we had was a steady add to the patient numbers. And we are expecting that as the COVID restrictions continue to use in various spots and we start seeing physicians face-to-face, we will see that direct impact in future weeks and months.

Okay. So July was better than June? Is that the point you were making?

Well, it was steadier than June is what the point I'm making.

Okay. Okay. Very good. And then on that REM safety analysis, that was really interesting. One thing that it seems like has slowed the adoption among practices that, you know, may have not prescribed the drug yet is still kind of lingering uncertainty surrounding cardiac safety. Is there any way you can kind of use these data and publish them given that you now have, you know, hundreds and hundreds of patients on drug and still are seeing clean echoes?

That's a great point, Paul. Yes, we are doing that in terms of moving ahead with further publications as we expand not only the number of patients who are on therapy, but the duration they're on therapy. And as I said, we've not seen any evidence of VHD or pulmonary arterial hypertension. In addition, we are getting patients who are very willing to talk about their experiences on Trinzapler. And also, if there are any lingering concerns about cardiovascular safety to have that discussion with families who may be considering FinTAPL. So we are seeing that on Facebook and other media, and we will continue to, you know, reinforce the safety of FinTAPL and the fact that we're not seeing anything with respect to cardiac toxicity.

Very good. Thanks, Steve.

Moving on, we'll go to Mark Goodman with SVB Lyric.

Yes, hi. Last quarter, she gave us a flavor for how much usage you were getting on your bay versus some of the off-label. If you could do that again, that would be helpful. And then also, can you give us a sense of the pricing dynamic in the U.S. as well as what's happening over in Europe just separately? Just kind of curious, the pricing in the U.S. this quarter versus last quarter, just, you know, what's happening there. Thanks.

Yes. So, Mark, I think from the DS versus LGS, I think the dynamic stays the same. Last time we said we had around 15%. And by the end of Q2, we are around now 20% of the prescriptions that are in the indications other than Dravet. And the component of that is almost similar to what I said earlier in terms of the SGS as well as other refractory epilepsies. So that is by end of June. From a pricing perspective, I think the pricing has stayed the same because it is dependent on the dose. And our average dose is still at 0.5 by end of Q2. So per patient, you have a similar price. And in Europe, at this point in time, we are still at the German price, which is around 50% of the U.S. And that is both in Germany as well as in France, where we are getting patients under the ATU. And those are reimbursed at the German price. As the negotiations continue, we are in a very advanced stage of negotiations in all these countries, that is France, Germany, UK, as well as Denmark. And we are hoping to conclude them. But again, it takes anywhere between nine to 12 months. And then I'll be able to comment on what we end up after those negotiations.

Thank you.

And next we'll go to Yatin Sunjet with Guggenheim.

Hey, guys. Thanks. This is Eddie on for Yatin. Can you give us a sense of what you're modeling the cadence of the European launch to be? It seems like you're still in Germany and France for now, but it's been a while since we've got an update on sort of when those other countries can be expected to come online. And then sort of separately, do you anticipate sort of a COVID impact in the second half to be different in Europe versus the U.S.? ? And then can you just remind us how the growth of the net is tracking?

Thanks. Let me take first around the cadence of other launches in other European countries. So as Ashish said, you know, we won't be launching in countries until we have a reimbursed and agreed to reimbursed price. And those discussions are proceeding very well. And so if we sort of assess where we're at today, we would assume that we will be able to move forward with a launch in France with a reimbursed price, although we are already on in France, albeit with a German price, in the United Kingdom, in Scandinavia, and Italy. I think that's the cadence which we would see move forward either later this year or into early next year.

Yeah, from the gross net, I think it's consistent with what we have indicated earlier, because eventually we will be somewhere in mid-20s. But at this point in time, we are in mid-teens from a gross net perspective.

Let me just remind us about COVID, yeah, and the Delta variant.

Oh, yeah. So with the COVID, I think with the Delta variant, we have started, we saw some closures and restrictions coming up in July. That happened in both U.S. as well as in Europe. And in Europe, actually, somewhere in, I think, in the month of May, we actually had complete shutdown in Germany for a few weeks. And in July, we have started seeing things open, but again, it depends on the region, and it's depending on the individual institute's policies. But I would say at this point in time, it's mixed, but we have started seeing the restrictions coming up.

Thanks for the call, guys. Congrats again.

Thank you. Thanks. Moving on, we'll go to Jason Gerberry with Bank of America.

Hey, good evening, guys. Thanks for looking at my questions. I guess just as you bring unique prescribers on board, I'm just curious if you can talk to the efficiency of the new prescribers and how quickly, once you're getting new docs in the brands certification, these are becoming high prescribers for you. And then as a follow-up, just on TK2D, maybe just a little color on what you'd expect for end-of-year follow-ups. in terms of obviously a very high unmet need indication, I guess in terms of what's sort of the key outstanding questions, be it either the extension study or the renal impairment data that you're going to want to help clarify with the agency. Thanks.

I'll start with the unique prescribers. So this will be focused on getting as many prescribers on board as possible, getting them run certified and getting them to start prescribing for their patients. The timing depends on the individual prescriber, but also a decision between the prescriber and the family. And they have an equal say in deciding whether they want to go on a new therapy or not. And as you know, in epilepsy, especially in this childhood refractory epilepsy, the patients and the families don't want to tinker anything that's going on at this point in time until they are fully open. At the same time, they feel comfortable that they can manage that transition because any transition you do has a potential of getting the patient into status epilepticus or worsening their situation. And I think that does take time for us to, and again, that's what we are seeing, for them to get on to the therapy. But in terms of physicians, when we get them REM certified, I think they get REM certified primarily because they have either one or two patients that they want to prescribe to, and then they start talking to the patient about that. And in terms of high prescribers, as you can imagine, usually it's always the thought leaders who have a lot of patients who see more than 10, 20 patients. And I'll say majority of them are already at the high prescriber side. And as we bring in more prescribers, those are the ones who have said anywhere between two to seven patients. And it's going to take step by approach to get the patients on therapy.

Jason, I'll take your question on TK2D. So, one thing to bear in mind here is that MC1621 has breakthrough family designation, which we've been able to utilize to have fairly frequent meetings with the review division at FDA. In fact, it's a review division that likes to be sort of kept updated as we make various decisions on our program. It's been very collaborative and very successful. So, with our last meeting in July, we were able to clearly articulate what would be the various data packages that would go into the NDA. So, as I said in my prepared remarks, the majority of the work is complete or is nearing completion. The two activities that are really driving the whole timeline is number one, We want to do an interim analysis on study 102, which is our ongoing long-term safety extension trial of patients who were originally on M31621 from other studies moved over into the industry-sponsored prospective study. We will do the data cut in early next quarter in order to have as much information in the end to support safety as well as efficacy. And then if you recall from prior discussions, FDA has asked us to also to go out and ensure that we can identify as many treated or untreated patients that may be out there that were not part of our studies. And we've done that. We're continuing to do that. And we have a time where we're basically saying we have completed that study. In other words, we're giving a reasonable period of time for these patients to become identified. we do expect that all that will be wrapped up by about the end of the year. And those are the two sort of critical path activities required for the NDA. The second study I mentioned, which is us going out and looking for other patients, is really to inform the integrated summary of efficacy and summary of safety. It's not there to change the data from study 101, which would be our adequate well-controlled trials. for the NDA submission. That's already completed.

That's great. Thanks, guys.

Thank you. Moving on, we'll go to with Mizuho Securities.

Hi. Good afternoon, and thanks for taking my question. The first question is related to LGS. Assuming approval sometime first half of next year, Because of the groundwork you have laid on Dravet syndrome, should we expect a potentially accelerated uptake, or do you think this will be just a normal launch? And a second question is around cash runway. Would you remind us where things are? Thanks.

Should I just take the first question, then, Mike? Yep. Cash runway.

Thanks for the question. I think in terms of LGS, as I said in , we are preparing for the launch, and with our recent incremental expansion that we did to call on other neurologists who treat the refractory epilepsies along with Dravet syndrome, kind of positions us very well to launch immediately upon the approval. And as you know, the LGS patient population is at least four to six times bigger than the Dravet. And we do anticipate that when we launch at, when we get the approval and launch in LGS, we will see accelerated uptake for Phentebla because there will be more patients who will benefit from it. And we'll be able to go and talk to more physicians. And we would have prepared for that prior to the launch. Mike?

We have roughly $400 million at this point, so we are well capitalized to run our base business and get through a successful LDS launch through next year with no issues. And we don't have any foreseeable plans yet at this point at all to capitalize the company for that.

Yeah. Thank you. Thank you, Boj. Just a follow-up question on CDD, and how do you think about the competitive dynamics, and how do you think FinTabular might be used?

Yeah, I'm happy to take that. CDD is very much like NGS, and as much of it's a high-reference . where patients take numerous anti-athletic drugs and still don't derive complete benefits. So, they are uncontrolled with respect to having breakthrough seizures or many seizures per month. So, to some extent, to say, you know, we see quintalpol as being a drug that will be used amongst others for CDD. I think it's worth noting today there are no approved drugs for CDD. that general anti-epileptics are used, but there's no specifically approved drug. We do know that Marinus has put forward an NDA for n-oxalone in CBD. That's actually the first drug that's under review for the FDA. I think where we see Fentapra working is really being able to, at least on the basis of the open-label trial data that Dr. generated in this investment initiative study really profound impact on generalized tonic-clonic seizures as well as other compulsive seizures. So we, you know, we have designed our study with, you know, assuming there will be a fairly large effect size, same effect size as Dravet, because the open label data that we've seen in CDD reflect what we saw in Dravet when we first started our phase three programs with Fintabla. So, in other words, we do think that there's a potential to have a big impact on seizure control within CDD.

Thank you. Next, we'll go to Danielle Brill with Raymond James.

Hi, guys. Thanks for the questions. I guess, first one, I just, I think I missed a number. So, what was the net number of patients on paid drug at the end of the quarter and then And prior to this, you also provided the number of total docs enrolled in REMS. Curious what that number is as well. And then finally, Mike, for the expansion of the sales and customer-facing teams, how should we think about modeling the step-up in SG&A going forward? Thank you.

Hi, Daniel. So, in terms of net number of patients at the end of the quarter, I think net of discontinuations, that patient number would be around 650. And when you look at the total number of starts, and total number of starts, well over 740. And we have, it's like, as you know, we have around 10% discontinuations, a 90% retention rate. And most of these have been happening after five months. We're trying the product for at least five plus months. In terms of total number of docs, the total number of docs who are prescribing is what we have said is around 290, and that was a growth of 22% over the first quarter. I hope that answers your question.

Yeah, I'm wondering how that differs from the total number of docs enrolled in the REMS program. I think it was 570 last quarter. Is it 290 in addition to that, or? Thanks.

Yes, I'll say it's half. So we have around 50% of the physicians who are enrolled in the REMS program are prescribed.

Okay, got it.

Yeah. And so, yeah, as we stand, this expansion, you know, it's, First off, just a little bit in front of where we would otherwise extend. We're really stating an opportunity that we're seeing in the germane market. The second is that we would have extended the sales force as we approach, hopefully, the first half of the year, launch an LGF, if we're able to go under six months review, March 31st approval timeline. And so it's a little bit in front of that, but it's not a material amount. It's 20 people, 20, 25 people, more so than we have currently. We've got all the other activities ongoing anyways, right, changing how we're approaching marketing and putting together campaigns and good access. So it's nothing significantly material.

I see. Okay. Thanks so much.

And as a reminder, please press star 1 at this time for questions. Next, we'll go to Tim Lugo with William Blair.

Hey, this is Lachlan on for Tim. Thanks for taking the questions. So I just was wondering, in terms of the persistency, it sounds like it's obviously very high, about 90%, but actually, I think you just said that most of the patients that have discontinued have done so after about five months. Are there any kind of trends that you're seeing in terms of why they're discontinuing or any more kind of colour you can provide there? That would be really helpful. And second of all, not to belabor the point, but obviously COVID restrictions are sort of plunging back to the floor. And as you expand or broaden the commercial reach to the new clinics, how should we think about the sort of potential growth trajectory in the back half of the year?

Yep. So, Lachlan, thanks for the question. And in terms of persistency, you are right. It's 90%. And it's average is five months, but we see the difference is anywhere between on a low side, five, and a high side, up to eight months patients stay on therapy before they discontinue. And that trend is as expected because with FinTech Lab, as you know, it works when it starts working. And usually it takes anywhere between, say, three to six months for the titration in the real world. So what we see is that patients start at 0.2, go all the way to 0.7 to the maximum dose, and they try it out for a couple of months. And if they are not seeing any effect, then they will discontinue, which is consistent with what we saw in our clinical trial also, where we had around 12% of the patients because they did not see any benefit. So that's, I think, in line with what we were expecting. As for your second question on the COVID restrictions, as we see more of them, we will continue to make efforts and our team continues to make efforts to get in front of that. And with this expansion which we hope to complete in this quarter and have that expanded team on board by the starting of the Q4, we will have more opportunities to go in front of the physicians, and we will have more kind of concentrated areas where we will be able to approach in some of the large areas because some of these restrictions can take into effect and go out of effect pretty rapidly and the response time will also decrease for us because the territories will be a little smaller so the traveling time will be a little less. So we expect that by that expansion, we will be able to reach out to more people in person as we start expanding and bringing people up board. Okay, thanks.

Okay. Moving on, we'll go to Jason Butler with JMP Securities.

Hi, great. It's Roy on for Jason. Thanks for squeezing us in. Just a couple questions, I guess, and I missed most of the call, so sorry if this has been covered, but the Phase III and CDD, did you guys have to make any allowances due to the expanded access program for Ganaxilone? And just the Tevard Biosciences gene therapy collaboration, what's the status of that? If you covered it, just tell me to listen to the replay. Thanks.

No, we haven't covered that, so thank you, Roy, for your questions. First with respect to CDD, we haven't made any accommodations for the expanded access for . We've been working very closely with the patient advocacy groups and experts in terms of which sites to go to and to identify patients. So we don't expect the presence of that to have a major impact on our ability to be able to enroll in this trial. You may have missed that this is a two-arm trial, 40 patients per arm, so a total of 80 patients in our phase three program. So we feel confident we'll be able to enroll that successfully. With respect to tele-advice sciences, as you know, this is an early stage collaboration looking at a really novel gene therapy approach for rare genetic epilepsies. We're still in the discovery mode in terms of doing the appropriate as well as animal-based studies to come up with what we think is an appropriate lead for IND enabling studies. Things are going well. We have a great collaboration with them. Our team here is very excited about it. And we will be even more excited to talk about it as we move into later this year, early next year, when we have some, you know, some meaningful experiments conducted. So, thank you for that question and raising TABAR-based answers. Great. Thank you.

And next we'll go to Nina Fitrito-Garg with Citi.

Hey, guys. Thanks for taking my question. So just regarding some of the discontinuations so far, can you talk about whether those are still kind of mostly coming from patients who were fincapline-naive, you know, prior to coming on a commercial drug versus patients who rolled over from clinical trial or expanded access program? And, yeah, that's all. Thanks.

Yeah, thanks for your question, Nina. These are all . So new patients, in other words, have not been exposed to . All the clinical trials funded access patients are still on therapy. So I think it gets back to what, as she said earlier, that if patients are finding and the vast majority do, then that benefit is sustained for a long period of time. And we've seen that. clearly in our clinical trial program, and it looks like it's being mirrored in our commercial experience as well.

Great. And then actually, sorry, one more follow-up. I believe you did take a 10% price increase during the quarter as well. And I guess just thinking about kind of the growth in that discount moving forward, how much of that should we expect to kind of factor into the net price per script or per patient? Thanks.

Yeah, and I'll take that. I think the price increase was 9.5%, and in terms of what that will get into gross net, I think it's going to be minimal, primarily because, as you know, our gross net has been trending fairly positive direction compared to what we are expecting. Eventually, we will catch up there, but as you know, with that price increase, we will have some Medicaid-related rebates, but that number is going to be pretty small based on our analysis.

Gotcha. Thank you.

I'd like to turn the conference back to Dr. Farr for any additional or closing comments.

Thank you very much, operator, and thanks to all of you for joining our call today. I'm very excited to report another highly productive quarter for Zigenis as we advance our mission of bringing in transformational therapies to critically in need rare disease patients. So I look forward to providing additional updates on our field activities for the second half of the year. Thanks again to all of you for joining us on the call today, and enjoy the rest of your day. Bye now.

This concludes today's call thank you for your participation you may now disconnect.