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spk00: Good day, everyone, and welcome to Myovant Sciences' third quarter of fiscal year 2020 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Ryan Crowe, Vice President of Investor Relations at Myovant. Please go ahead.
spk07: Thank you, Operator. Good morning, and thanks for joining us today for a general business update and to review the financial results of Myovant's third quarter of fiscal year 2020. Joining me for today's call are Dave Merrick, Myovant's Chief Executive Officer, Frank Carba, President and Chief Financial Officer, Adele Golfo, Interim Chief Commercial Officer, and Dr. Juan Camilo Arjona, Chief Medical Officer. In addition to the press release issued earlier this morning, the slides that will be presented during today's webcast are available on our investor relations website, investors.myovant.com. During the course of this conference call, we'll be making forward-looking statements. These include plans and expectations with respect to our products, product candidates, strategies, opportunities, and financials, all of which involve certain assumptions of risks and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A discussion of these risks can be found in our SEC disclosure documents. In addition, my event does not undertake an obligation to update any forward-looking statements made during this call. With that, I'll now turn the call over to Dave Merrick, my event's chief executive officer. Dave?
spk08: Thank you, Ryan, and good morning, everyone. Since our last earnings report in November, I'm pleased to report that MyoVant has achieved four landmark milestones, an FDA approval, a collaboration agreement with Pfizer, positive data from a Phase III extension study, and a product launch. These are huge milestones that have helped transform us into a commercial stage company with compelling near-term opportunities in oncology and women's health. Before we review these milestones in more detail, let me first comment on the Orgovix launch. It's still early days, but I'm encouraged by the initial feedback we've heard from the field and the ordering trends we've seen after just five weeks. Through the end of last week, approximately 1,800 bottles of Orgovix have been shipped into our distribution channels, which include our specialty distributors, specialty pharmacies, and our free trial program. We will learn more about this inventory and how it's being dispensed to patients as we receive more patient and provider-level detail and data in the coming weeks. From a customer standpoint, I'm pleased that 10 of our top 20 highest priority accounts have placed at least one order for OrgoVix. And overall, of customers that have placed an order through the end of last week, 30% have already placed reorders. So in summary, great progress in the early days of the launch, but we're just getting started. In December last year, the FDA approved Orgovix, our oral relugolix monotherapy 120 milligram tablet for the treatment of adult patients with advanced prostate cancer. As the first and only approved oral gonadotropin-releasing hormone receptor antagonist, we believe Orgovix is poised to become the new androgen deprivation standard of care. And this is based on its differentiated clinical profile coupled with its patient-preferred oral formulation. And prostate cancer represents a substantial opportunity to improve or redefine care. It is the second most common type of cancer in men in the United States with approximately 3 million men living with this disease. And of those, approximately 300,000 patients are projected to receive androgen deprivation therapy or ADT this year alone. And of those patients, approximately 100,000 patients will initiate ADT this year and about 200,000 continuing ADT as part of their prostate cancer treatment journey. And due to advances in prostate cancer care and an aging population, the number of men with advanced prostate cancer in the U.S. is expected to grow by mid single digits annually in the coming years. Also, two out of three men with prostate cancer have cardiovascular risk factors and an estimated 30% of prostate cancer patients have diagnosed cardiovascular disease. So in fact, more men with prostate cancer die of cardiovascular disease than from prostate cancer itself. And it's well recognized that injectable LHRH agonists such as Luprolide, the current ADT standard of care, as well as certain other prostate cancer medicines may increase the risk of cardiovascular events. The approval of Orgovix now offers men with advanced prostate cancer rapid, profound, and sustained testosterone suppression. And this is without an initial surge in testosterone levels that can exacerbate clinical symptoms known as hormonal flare. And for men who receive time-limited treatment courses and who would benefit from a faster return to normal testosterone levels, Orgovix offers testosterone recovery within 90 days of treatment discontinuation for the majority of men. One of the clinical attributes providers have told us they find most compelling is that men treated with Orgovix in the Phase III HERO study had a lower incidence of major adverse cardiovascular events, including heart attacks, strokes, and death from any cause, compared to those receiving LHRH agonist injections. And finally, as a one pill, once a day therapy, Orgovix provides a convenient alternative for patients compared to the injectable options which require travel to the clinic or hospital for administration. So as you can imagine, this is particularly important for this population of patients with advanced prostate cancer during the ongoing COVID-19 pandemic. Now let's briefly review the MyoVant-Pfizer collaboration that was announced shortly after the Orgovix FDA approval. In December, MyoVan and Pfizer entered a broad collaboration agreement to jointly develop and commercialize Orgovix and Relugolix combination tablet in the U.S. and in Canada. Together, we believe we will maximize the benefit Relugolix can bring to patients across therapeutic areas and across markets. will evenly split Relugolix-associated profits and certain development and commercialization expenses in the U.S. and Canada. In exchange for these co-development and co-commercialization rights, MyoBand is eligible to receive up to $4.2 billion of net payments from Pfizer. Additionally, Pfizer obtained an exclusive option to develop and commercialize Relugolix in oncology outside the U.S. and Canada, excluding certain Asian countries. So let me highlight more specifically the deal economics. We entered into this transaction because we believe it's good for patients, and it creates significant incremental value for Myoban. Adding Pfizer's capabilities to our own has the potential to significantly increase the value of the Relugolix franchise by accelerating product uptake and increasing overall peak revenue. The partnership will also allow us to maximize the clinical potential for Relugolix while reducing mildance cash burn through the sharing of certain expenses. The substantial deal economics dramatically strengthen our current financial condition and significantly improve mildance financial outlook. And this will now enable us to invest in our pipeline beyond Relugolix sooner than we previously planned. In addition to the $650 million upfront payment, Myobank could also receive additional payments of up to $250 million within the next 18 months. This could be composed of up to $200 million of regulatory milestones for FDA approvals in women's health, as well as a $50 million payment that would be triggered should Pfizer exercise its option to develop and commercialize rights to Relugolix in oncology outside the US and Canada. And this is a decision we anticipate Pfizer will make during the first half of this year. MyoVan is also eligible to receive up to $3.5 billion of tiered sales milestones equally split between Orgovix in oncology and Relugolix combination tablet in women's health based on annual net revenues for each product in the US and Canada. Myobant and Pfizer will also split 50-50 certain Relugolix associated development and commercialization expenses. This will enable us to reduce our anticipated cash burn compared to developing and commercializing Relugolix by ourselves. So, in summary, the significantly increased value of the Relugolix franchise that we anticipate from the collaboration coupled with the rich deal economics, is expected to more than offset the 50-50 profit split, resulting in greater overall value for MyoPAN. I'll now turn the call over to Juan Camilo to discuss the recent SPIRIT extension results and to share some exciting details on a near-term lifecycle opportunity, Relugolix Combination Tablet. Juan Camilo. Juan Camilo. Juan Camilo.
spk02: Thank you, Dave. Last month, we reported the 52-week results for the SPIRIT extension study in women with endometriosis. These results built on the positive 24-week data from the SPIRIT1 and SPIRIT2 phase 3 trials we presented last year. SPIRIT1 and SPIRIT2 had identical designs and involved women with moderate to severe pain associated with endometriosis surgically diagnosed in the last 10 years. Approximately 1,250 women were enrolled across both studies and were randomized one to one to one into three groups to receive placebo for 24 weeks, relugolix combination therapy once daily for 24 weeks, or relugolix monotherapy for 12 weeks, followed by 12 weeks of relugolix combination therapy. This last group allowed us to compare the safety of relugolix combination therapy with that of relugolix alone, over the first 12 weeks of treatment. The two co-primary endpoints defined as the proportion of women with a clinically meaningful reduction in dysmenorrhea or menstrual pain and a clinically meaningful reduction in non-menstrual pelvic pain, both assessed by a numerical rating scale, were analyzed after 24 weeks of treatment and compared the relugolix combination and placebo groups. Following the 24-week treatment period, Patients were given the option to enroll in an extension study for up to 80 additional weeks, with an initial analysis of efficacy and safety at week 52. Another analysis will be conducted at week 104 in about one year from now. A total of 802 women enrolled in the extension study, all of whom received relugolix combination therapy regardless of their treatment assignments in spirit 1 and spirit 2. Let's first review the 24-week results of the SPIRIT studies. As you can see from the data in the orange columns, over 24 weeks, relugolic combination therapy demonstrated significant and very consistent efficacy results in both SPIRIT studies, with a responder rate for dysmenorrhea of about 75%, responder rate for nonmenstrual pelvic pain of over 60%, and improvement in dyspareunia, or painful intercourse, a key secondary endpoint. Women receiving relugolix combination therapy had minimal, non-clinically meaningful bone mineral density loss and a low incidence of hot clashes. To put these results in context, we present on the right side of the table the results from the elugolix monotherapy pivotal studies called ELARIS-1 and ELARIS-2. While these studies had all similar designs, Let me remind you that comparing data from different studies must always be done with caution. As you can see, after 24 weeks, relugolix combination therapy has an efficacy profile comparable to that of the high dose of alugolix, with a safety and tolerability profile more like that of the low dose of alugolix. Let's now review the 52-week results of the SPIRIT long-term extension study, for those women who received relugol exclamation therapy for one year. The 52-week results for this group are consistent with the efficacy and safety profile initially observed through 24 weeks. 85% and 73% of women respectively reported clinically meaningful reductions in dysmenorrhea and non-menstrual pelvic pain at one year. Importantly, bone mineral density loss was which was minimal and not clinically meaningful after 24 weeks, stabilized from week 24 to week 52. The proportion of patients reporting hot flushes after one year was also consistent with the initial 24-week treatment period, despite an observation period that was twice as long. Now, let's consider these results in comparison to the results from the 52-week extension study for elegolics monotherapy, which are displayed on the right side of the table. Once again, comparing data from different studies must always be done with caution. Results after one year of treatment suggest that relugolix combination therapy has an efficacy profile comparable to or slightly better than that of the high dose of elugolix with a safety and tolerability profile that is comparable to or slightly better than that of the low dose of elugolix. Given the spirit extension data generated after one year, we believe relugolix combination tablet, a one-peel, once-a-day treatment, has the potential to be a best-in-class option for women with endometriosis. I'd like to use this opportunity to share with you a new clinical study we plan to initiate in coming weeks that we believe will provide valuable information to women and their healthcare providers and could further differentiate relugolix combination tablet from other GnRH antagonist treatment options for uterine fibroids and endometriosis. We learned from market research that contraception is important to women with uterine fibroids or endometriosis. Approximately 65% of current uterine fibroid patients taking oral contraceptives for treatment believe that contraception is an important factor in considering a uterine fibroid treatment. Similarly, approximately 78% of women taking elegolics as a treatment for endometriosis believe that contraception is an important treatment consideration. Currently available GnRH antagonist therapies for uterine fibroids and endometriosis require concomitant use of barrier or non-hormonal contraceptives, and their use with hormonal contraceptives may be associated with decreased efficacy and increased risk of adverse events. Relugolix combination therapy has already demonstrated 100% ovulation inhibition in a Phase I open-label single-arm study in 67 healthy women over an 84-day treatment period. Based on these results, we are planning to start the SERENE study, Phase III study to assess the contraceptive efficacy of relugolix combination tablets. The SERENE study will enroll sexually active healthy women ages 18 to 35 years with presumed normal fertility. All women will receive one daily relugolix combination tablet for 13 28-day cycles. The primary efficacy endpoint will be the PERL index, defined as the number of untreatment pregnancies per 100 women years of treatment. Positive data from the SERENE study could further differentiate relugolix combination tablets by potentially adding the benefit of prevention of pregnancy for women being treated for uterine fibrous or endometriosis, is approved for these indications. We believe that relugolix combination tablet, which combines 40 milligrams of relugolix with 1 milligram of estradiol and a half milligram of the progestin noradrenaline acetate, could have a meaningful impact in the field of women's health. We have heard from prescribers, primarily OBGYNs, that they are still looking for better medical treatment options for endometriosis and uterine fibroids as an alternative to surgery. Their top priorities for treatment are very clear and consistent. Stop the symptoms, minimize the side effects, and make it easy for them and their patients. We believe that relugolix combination tablet has the potential to meet those treatment requirements based on the results from our phase three liberty and spirit clinical studies. Symptom relief was significant in these studies with a 90% average reduction in menstrual blood loss in women with uterine fibroids and an 83% average reduction in menstrual pain for women with endometriosis, both after one year. Relugolix was generally well-tolerated with stable bone marrow density at one year after an initial minimal loss following treatment initiation, and rates of adverse events such as hot flushes were low and not meaningfully different from placebo. Finally, dosing for Relugolix combination tablet is convenient. One pill once a day with combination therapy from the start and is the same for uterine fibroids and endometriosis. We believe we may have found the right balance with relugolix combination tablets, reducing estrogen levels to a range that improves symptoms while minimizing the side effects of low estrogen. And we look forward to the potential of bringing this product to women with uterine fibroids later this year, pending the FDA's decision, which we expect by June 1st. I will now turn the call over to Adele to discuss the launch of Orgovix. Adele?
spk10: Thank you, Juan Camilo. It has certainly been an exciting first month of our promotional efforts. After our launch meeting just five weeks ago, we are already receiving tremendous prescriber interest and feedback, which lead us to believe that Orgovix has the potential to be everything we hoped. Our long-term goal is to establish Orgovix as a standard of care androgen deprivation therapy for men with advanced prostate cancer. Executing on our launch priorities represents the first steps towards achieving this goal. Educating physicians so they have confidence prescribing Orgovix, establishing broad access by enabling seamless treatment starts, and engaging patients to drive awareness are all foundational to our commercialization strategy. We've made significant progress across each of these priorities, which I'll now review in more detail. Due to the large percentage of in-office dispensing and specialty pharmacy distribution, we believe that achieving broad Orgovix adoption goes beyond clinical education to encompass office economics and operational considerations, including e-prescribing. I'm happy to say we're making significant strides across all three areas. The clinical component is being driven by our sales force who are initially targeting key prescribers and are equipped with materials and technology to perform this function virtually as well as in person. The economic component primarily impacts those practices within office dispensing capabilities. The vast majority of these practices now have access to our Orgovix contract which was designed to ensure they are not economically disadvantaged when prescribing Orgovix. For those customers without dispensing capabilities, Orgovix is available through a specialty pharmacy network. And finally, we need to ensure that prescribing Orgovix is seamless. This includes supporting office e-prescribing systems, ensuring that practices and patients take advantage of reimbursement and financial support offered through the Argovix support program, and where necessary, that Argovix is appropriately added to the clinical pathways to support prescribing. We are very pleased with our early efforts to reach prescribers. We have had over 10,000 total touch points with healthcare providers since launch. A high concentration of our meaningful interactions to date have been with Tier 1 or Tier 2 accounts. including academic centers and large urology and oncology group practices that drive a significant share of ADT scripts. We were able to accomplish this in just five weeks and almost exclusively with MyAvance 100-person sales force. We are proud to have hired a highly experienced sales team in urology and oncology, averaging eight years, and many with local established relationships. Anecdotally, our representatives are seeing customer engagements reaching over 30 minutes with tremendous enthusiasm for the clinical profile, particularly the compelling efficacy, the cardiovascular profile, and given the ongoing pandemic, Orgovix's oral formulation. We are pleased to report that the Pfizer sales team is now fully trained and joined us in the field last week. which should bolster the early momentum that we were able to generate. As mentioned previously, the vast majority of in-office dispensing practices have access to our contract pricing, and these early efforts are translating into Orgovic's orders. In fact, 10 out of our top 20 highest priority accounts have already placed orders and And another encouraging sign, 30% of all accounts that have placed Orgovix orders have already reordered. In addition, half of our highest priority accounts have Orgovix in their e-prescribing system, which is great progress. We have also made notable progress in establishing broad patient access to Orgovix. Our distribution channel was fully stocked within 72 hours of launch, and our patient support program, including the free trial program and co-pay support for commercial patients, went live during the first week of launch. Regarding payer coverage, approximately 30% of commercial patients currently have access to reimbursement today via pre-review coverage, and more may have access through the formulary exceptions process. Part D patients may also have access today via their formulary exceptions process. Our patient support services include support for prior authorization, and we have seen a good success rate with these requests so far. Engagement with payers continues with initial commercial coverage decisions expected in the first half of 2021. which should support coverage for most commercial patients beginning in the second half of 2021. The path to broad Medicare Part D coverage starts with submitting our bids for the 2022 plan year, and we expect decisions by the May or June timeframe. Following these decisions, we do expect some Medicare Part D plans to offer access to Orgovix in 2021, with broad coverage anticipated no later than January 2022. Our strategy for engaging patients has three phases, two of which have already launched. The goal for our initial campaign is to drive early brand awareness with highly engaged patients, let them know Orgovix is approved and available, and drive them to talk to their doctor. In the second half of this year, After prescriber education milestones are met, we'll look to broaden our awareness efforts with the goal of increasing patient activation through targeted direct-to-consumer campaigns. Our efforts to drive patient adherence utilize a three-pronged approach. When a patient initiates Orgovix, nurse services are offered to each patient to coach them through the early days on therapy. A welcome kit with information on what a patient should expect after starting Orgovix as well as a treatment planner to help the patient remain on track is also provided. As treatment continues, patients are sent monthly mailers that provide helpful information on Orgovix and other content to maintain engagement and adherence. We are off to a great start regarding patient engagement. In the few weeks since launch, we had over 37,000 total visits to our Orgovix patient website, 83% of which were unique visitors with nearly one in five visitors downloading material. This is four times higher than our benchmarking data for other recent oncology product launches and likely reflects just how engaged men with prostate cancer and their caretakers are in making decisions regarding their health. We are very pleased with the early progress we have made on all three of our launch priorities and look forward to keeping you updated in the future. I will now turn the call over to Frank to review our fiscal third quarter financial results. Frank?
spk13: Thank you, Adele, and good morning, everyone. I will focus my comments on the highlights of our financial performance in the quarter and refer you to our press release and Form 10Q issued earlier today for additional information. Please remember that MyEvan's fiscal year starts on April 1st, so the financial results for the quarter ended December 31st, 2020 represent our third fiscal quarter of 2020. I will begin with revenue. We recorded 1.4 million of collaboration revenue, which represents about one week's amortization of the upfront payment received from Pfizer. Given the signing of the deal occurred in late December, the amortization period in fiscal Q3 was very short. Collaboration revenue related to the upfront payment will increase to $21 million in fiscal Q4 and is expected to remain constant each quarter thereafter over the next six years. R&D expenses in the quarter were $30.5 million compared to $48.9 million for the comparable prior year period. The decrease in R&D expenses primarily reflects the completion and continued wind down of Myovin's phase three programs, partially offset primarily by increased expenses associated with the build out of Myovin's medical affairs organization in preparation for the U.S. launch of Orgovix and the potential commercial launches of Valiolix combination tablet for women's health. Our R&D expenses in the quarter also reflects a cost sharing reimbursement from Pfizer of $7.6 million for expenses associated with pre-launch commercial inventory. SG&A expenses in the quarter were $49.2 million compared to $29.1 million for the comparable prior year period. The increase was primarily due to increased spending on commercial readiness activities to support the U.S. launch of Orgovics, personnel-related costs, including the hiring of our oncology sales force and other general overhead expenses as we continue to prepare for the potential commercial launches of Religolix combination tablet in the women's health indications. Total operating expenses for the quarter were $79.7 million, of which approximately $7 million was stock-based compensation. We also incurred a $5.8 million gain on foreign currency during the quarter that was recorded in our other income line. MyAvent generated a net loss of $73.8 million in the third quarter of 2020 compared to $85.6 million for the comparable prior year period. On a per share basis, our net loss was $0.82 in third quarter 2020 and $0.96 in the prior year period. Now looking ahead, We expect R&D expenses over the next several quarters to be at roughly similar levels to our fiscal Q3 2020 R&D expense, excluding the $7.6 million of expense reimbursement from Pfizer. Declining spend on clinical programs that are winding down, as well as our sharing of certain expenses with Pfizer, I expect it to be offset by incremental spend on Religolix lifecycle management activities, such as the planned Phase III serine study. In upcoming quarters, where regulatory filing expenses are incurred, there could be modest deviations from this trend. SG&A expenses overall are expected to continue to increase from fiscal Q3 2020 levels as we continue to build out our commercial capabilities and support our commercialization activities. This increase is primarily driven by the hiring of our women's health sales force, which we now expect will be comprised of approximately 120 sales professionals and is expected to occur in fiscal Q1 2021 as we approach the FDA's uterine fiber target action date of June 1st, 2021. Additionally, our fiscal third quarter 2020 reflected only partial expenses of our prostate cancer sales force because the hiring occurred gradually over the course of the quarter. Finally, please note that in fiscal Q4 2020, we expect to record incremental non-cash stock-based compensation expense of approximately $28 million due to the accelerated vesting and modification of our former CEO's equity awards upon her separation from the company. Let me wrap up by commenting on our cash position. we ended the quarter with $746 million of cash, cash equivalents, and marketable securities on our balance sheet. This was bolstered by the $650 million upfront payment that was received from Pfizer in late December 2020. As of the end of fiscal Q3, there was approximately $86 million of capacity remaining under the low-cost loan facility that Sumitomo Denipon Pharma, our majority shareholder, extended to us. An additional $200 million loan commitment that was extended to us by DSP in August 2020 also remains available to us until March 2021. Let me also remind you that there are several potential milestone payments anticipated in coming months that will further enhance our strong liquidity position. As Dave mentioned in his opening remarks, MyAvent could receive additional payments of up to $250 million under the FISA collaboration alone, within the next 18 months. This could be composed of up to $200 million of regulatory milestones for FDA approvals in women's health, as well as a $50 million payment that would be triggered should Pfizer exercise its option to obtain development and commercialization rights to religolics in oncology outside the US and Canada. This is a decision we anticipate Pfizer will make during the first half of this year. So overall, my event is well capitalized to advance our commercial launches and potentially expand our pipeline. Now, with that, I'll turn it back to Dave for some closing remarks.
spk08: Thank you, Frank, Adele, and Juan Camilo. In summary, this is an exciting time for MyoVan with the ongoing launch of Orgovix and the potential upcoming launch of Relugolix combination tablet in the uterine fibroids indication around mid-year. Our focus is squarely on successfully executing these launches and working with Pfizer to ensure we are efficiently bringing these important therapeutic options to patients in the U.S. And as Frank highlighted, we are approaching commercialization from a position of financial strength, which we expect to continue to build as we achieve additional upcoming milestones. The one-year SPIRIT results position Relugolix combination tablet as a potential best-in-class therapy for women with endometriosis and will support upcoming regulatory filings in the US and EU. I am extremely proud of all of the work done by the MyoVant team to get us to this point, and I look forward to what's ahead. Thank you for your attention, and now I'll turn it back over to Ryan to begin the Q&A session.
spk07: Thank you, Dave. Operator, can we now please poll for questions?
spk09: Ladies and gentlemen, as a reminder to ask a question, you will need to press the start and the one key on your touch-tone telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Now, first question coming from the lineup, Jason Butler with JPM Securities. Your line is open.
spk14: Hi. Thanks for taking the question and really appreciate all the details you ran through there. I guess just the first one on the commercial side, can you speak to the types of patients that are being initiated on therapy first, you know, newly diagnosed versus, you know, having been through prior therapies, severity of disease, et cetera? And then just on the contraception program, can you just speak to, I guess, A, just review for us the data you have from your Phase III trials, the completed Phase III trials and extension studies in terms of pregnancy frequency, and just any regulatory dialogue or precedent that you think is relevant here. Thanks.
spk08: Sure. Thanks for joining us this morning, Jason. I really appreciate the question. I'll cover the the types of patients, and I'll ask Adele to weigh in, and then I'll turn it over to Juan Camilo for the contraception study. But just as a reminder, when we look at the types of patients, I just want to recall, I know many of you know this regarding our distribution channel. So while we are a retail product, we don't receive the same data that would be typical as an oral agent in the retail setting. Recall we're in the specialty pharmacy distribution, and therefore the visibility we have as the product goes into our specialty distributors and then ultimately to in-office dispensing, the visibility we have on patient-level data is limited. So I just put that as a reminder, and I'll turn it over to Adele to add color on what we would expect to see in terms of the patient profile. Adele?
spk10: Yeah, thanks. Thanks for that, and thanks for the question. What I will say, it is a bit early. We will still continue to gather information on our patients and have a bit more insights into that. But what I can tell you today is that our medical affairs team is actually engaging our providers on how we would go about transitioning patients who are on other therapies as well as initiating. So what that tells us is we are hearing what we would expect to hear is that Doctors are interested in starting patients on Argovix who are either new to therapy or who are experienced. So what I can tell you is that that's what we're seeing to date.
spk08: And then, Juan Camilo, would you take the contraception question? Yeah.
spk02: Yeah, Dave, thank you. So, Jason, we're excited about the contraception study. And I heard two questions in your question. One is any regulatory precedent and comment on the pregnancies in prior studies. I'll start with the second one. As we've mentioned in our prior presentations, we have seen a few pregnancies in our prior studies. mostly on the placebo patients, but a couple in patients receiving relative inflammation therapy. In these studies, we were not set up for assessing prevention of pregnancy, nor patients were instructed to take this drug as their means for prevention of pregnancy. Every patient in these studies was required to use non-hormonal methods of contraception. These studies are not really set out for assessing the contraception efficacy of relubolic combination therapy. We have shown before our ovulation inhibition study that demonstrated 100% ovulation inhibition, and this is a study specifically designed to assess the effect of relubolic combination on ovulation. So we're very, very confident on Therefore, we decided to take the next step, which is to conduct a study that is a pretty standard design study. This is the way these studies look like when you're assessing contraception. We have decided to run that study to provide that information to patients and physicians.
spk14: Great. Yeah, that's helpful. Thanks.
spk09: Our next question coming from the line of Bill Nadu with Colin. Your line is open.
spk04: Good morning. Congrats on the progress, and thanks for taking my question. First one on the commercialization efforts with Pfizer. Can you discuss how the resources you're getting from Pfizer and their sales force is coordinating with your own plans in the U.S.? ? who takes what, and how is that decided?
spk08: Sure. I'll kick off, and once again, I'll turn it over to Adele. I think, you know, again, we view Pfizer as really the ideal partner, not only for women's health eventually, but right out of the gates here with prostate cancer. And, you know, one of the areas that we really value from Pfizer is the longstanding relationships they have with customers and their knowledge of the prostate cancer itself, but also the speed in which they've moved to really activate around this launch. and that they were fully trained and in the field as early as just last week. So we're really heartened by the speed in which they've been able to be trained and get up to speed on the therapy and then really start to contribute. So I'll turn it over to Adele to add her perspective as well.
spk10: I would say, as he said, they've come online in the last week, and what we're hearing and actively monitoring is the very active collaboration at the ground level. So the reps are coordinating in terms of the calls that they're making on the prescribers, and also we're actively ensuring that they're working collaboratively as it relates to our most important accounts because in addition to the sales representatives that we have from Pfizer, we also will have the opportunity to tap into their key account managers and the teams that they have that are covering these large group practices and those other accounts that are primarily the ones with the in-office dispensing that we talked about.
spk04: Great. That's very helpful. That's very helpful. On the account for the DO, how does it work pre- and post-profitability? Is there a true-up every quarter on your expense lines on SG&A and R&D, or will there be a separate reimbursement line where you record some of the reimbursements as revenue pre-profitability, and then post-profitability, will there be a collaboration profit share in your expense lines? Thanks.
spk08: Yeah, so there was a little feedback on the beginning of that, but I think, Frank, if you caught that question, I'll turn it over to you to clarify.
spk13: Yeah, I think I caught it. Thank you, Phil. Let me maybe speak more broadly about how the FISA collaboration will be reflected in our financial statements. And there's maybe four points to make here. The first one is, remember that my event will record 100% of the net product revenue. So under our revenue statement, section in the P&L going forward, there will be several captions. One of them will be net product revenue that will show 100% of the net product revenue. There will also be a line that will be titled something along of collaboration revenue, which will be comprised of the amortization payments from the upfront payment and any potential milestone payments. And then under our cost of goods portion of the P&L, we will have a line item called collaboration expense, and that will reflect the gross profit share with FISA. It will essentially be comprised of the net product revenue minus cost of goods, and half of that is attributable to FISA. So we'll see that on a separate line item called collaboration expense. And then thirdly, with regards to expense sharing, the allowable expenses that are subject to expense sharing will flow through the respective line items in R&D and in SG&A. And the way this will appear on our P&L is basically as a reduction in our expenses. So R&D and SG&A expenses will appear lower going forward than they would have been without the Pfizer collaboration.
spk04: That is very helpful. Thank you. And then one last question from Oz, just on the – it's a follow-up to the question on the pregnancy study. In terms of the PRO index, what needs to be achieved in order to support licensure? Is there any regulatory precedence for what you have to show?
spk14: Juan Camilo?
spk03: Yeah, thank you, Phil.
spk02: As I mentioned before, this is a pretty traditional design, like any other contraception study, and it's based on regulatory guidance documents from the FDA and how the study should be defined and The PERL index is a pretty simple calculation.
spk03: It's just the number of pregnancies that occur over 100 patient years of exposure.
spk02: So, we enroll patients that are otherwise believed to be fertile, and they agree to use relevant combination therapy as their only method for prevention of pregnancy, and then we collect the number of pregnancies and divide it by the number of months that women were taking this medication. And that gives you the Pearl Index.
spk04: Right, but is there a specific hurdle that you have to reach? Like, if the Pearl Index is over X, you can't get the label, but if it's below X... Yeah, I think that... Yeah, we...
spk02: We're not going to comment on that at this moment. I think that you just want to demonstrate the ability to prevent pregnancy, and we're pretty confident, based on our ovulation inhibition data, that we will get a pearl index that is pretty reassuring to physicians and patients.
spk04: Got it. Thanks for taking my questions, and congrats again on the progress.
spk09: Our next question coming from the line of Eric Joseph with JP Morgan. Your line is open.
spk05: Hi, good morning. Thanks for taking the questions. I was just wondering if you could elaborate on how long of a free trial period is being offered to patients with Ergovix, particularly among government-insured patients. I guess, will physicians have sort of enough flexibility to write to Medicare patients until there's a formal Part D coverage decision? And then I have a follow-up on the contraception study.
spk08: Well, good morning, Eric. Regarding the free trial program, the free trial program is available to all patients. As I'm sure you know, that has an extension of up to two months. And then beyond that, we have a bridge program that's open to commercial patients in which that enables patients to stay on therapy while commercial coverage is being determined. So, two months for the free trial, and then an extension for commercial patients on bridge. Regarding progress on what we're seeing in terms of Medicare coverage, I'll turn it over to Adele.
spk10: The point that Dave made is the right one, is that the free trial program is offered to both commercial and Medicare patients. And what I can say about the Medicare patients is that they do have access to the formulary exception process, and we're seeing this actually happen. So we have the formulary exception process for those Medicare Part D patients. And I'll comment that we continue to have very good discussions with the Medicare Part D plans. And I'll remind you that by May-June timeframe of this year, we should have our decisions. And we do expect some plans will come on online even in 2021. Of course, the majority of coverage starts in January of 22, but we will expect to see some plans come online this year.
spk05: Okay, got it. And I guess just trying to better understand the rationale, the strategic rationale behind the contraception study with the combination tablet. Is it correct to read this as a desire to directly compete with OCPs and potentially forego the need to step through oral contraceptive use in the endometriosis segment and then, if that's the case, Have thoughts around sort of pricing of the combination tablet changed as a means of maximizing the value proposition there? Thanks.
spk08: Yeah, well, regarding pricing, I think we're not in a position to talk yet about pricing, but I'll ask Juan Camilo to talk about the strategic rationale.
spk03: Yeah, thank you, Dave, and thank you, Eric.
spk02: So let me just clarify one thing. We're not going to compete with combined hormonal contraceptives in the overall population. What we've heard loud and clear from patients and from their physicians is that we're talking about a premenopausal population for both indications, endometriosis and uterine fibroids. And in addition to wanting treatment for these conditions, they want to manage their they're alive and contraception is a component of that. So as I mentioned in my remarks, what's available today in terms of GnRH antagonism treatment does not provide, well, requires use of barren methods of contraception that quite honestly are not usually desirable by patients, nor consistently used. So we believe that having seen the data from our ovulation inhibition study with 100% ovulation inhibition, we have an opportunity to provide a full potential pregnancy in addition to treatment of symptoms of uterine fibrosis or endometriosis if approved for these patients that desire it. And we believe that would be highly differentiating from other drugs in the class.
spk05: Thank you, guys. That's helpful. Thank you.
spk09: Our next question coming from the line of Paul Choi with Goldman Sachs. Your line is open.
spk01: Thank you, and good morning, everyone. Thanks for taking our questions. First, just on the Part D discussions, I was wondering if you could just clarify and elaborate a little bit. First, is there a possibility of temporary codes for 2021 versus the exception process? And then also, just to confirm, you're seeking a permanent J-code or something comparable to that 422?
spk08: So Adele, I'll let you address our expectations around Part D coverage.
spk10: And we can double check this, but in terms of codes, we're not pursuing any of that. We're going with the standard process. So I'm not quite sure that that's relevant for us. We have been having very good discussions with the payers, as I've said, both on the commercial and on the Medicare side. And we started this process end of last year. And we're continuing it with coverage decisions mid-year and plans coming online thereafter.
spk01: Okay. Thank you for that. Thank you for that. Then just with regard to Europe, can you maybe tell us where you are with regard to your own commercial infrastructure build? Specifically, I know you're considering and still waiting on the potential Pfizer opt-in, but just where you are with respect to your commercial infrastructure development in Europe.
spk08: Sure, Paul. I think when you look at the Women's health in Europe, we've already established a collaboration with Gideon Richter, so we're very enthusiastic as we approach the potential commercial approval in uterine fibroids that we would hope would come around mid-year. And so Gideon Richter will lead the commercial efforts in women's health. Regarding prostate cancer, as we've mentioned, Pfizer has the first option or right of first refusal, so to speak, of the prostate cancer. We expect that they will make that decision in the first half of this year. In our negotiations and the collaboration, they were very enthusiastic about that opportunity. So we will await their decision as we get closer. Should they choose not to take that option, We did have and still do have other partners who are very interested in the prostate cancer opportunity in Europe. And so we will have plenty of time to determine another partner that could potentially launch prostate cancer in Europe. We are not currently building out our European infrastructure to support those launches directly. We will do that through partnerships.
spk01: Okay, great. Thanks for that clarification. And then just lastly, In terms of your physician checks and just sort of where the European practitioners, you know, broadly see Relagolix fitting in in terms of the ADT landscape for prostate cancer, can you maybe just, you know, comment on what your early market research is suggesting where it could potentially fit in? Thank you very much.
spk08: Thank you, Paul. I will ask Adele to comment on your question.
spk10: In Europe, we haven't done an extensive amount, but how physicians prescribe and maybe Juan Camilo can just add. But we see patients with advanced prostate cancer and the incorporation of ADT in a similar manner. And just as we would expect in the U.S., we have our goal of Orgovix becoming the new standard of care. for ADT. We would hope to see that in Europe, but I'll ask Juan Camilo if he wants to comment on prescribing, because it's pretty parallel.
spk03: Yeah, thank you, Adele. Thank you, Adele.
spk02: I think you're right. It's pretty parallel to the U.S. Agonies are the primary form of ADT used there. With the physicians that we've spoken in Europe, there is a high enthusiasm for the antagonist being now available in a way that is, well, not available, but could potentially be available for an oral route, and they look forward to seeing it. So I don't think it's very different than what we see in the U.S.
spk01: Thank you very much. Thank you, Paul.
spk09: Our next question coming from the line of Mohit Binsal with Citi. Your line is open.
spk12: Great. Thanks for taking my question, and congrats on all the progress. Maybe a couple of questions. One question on the cadence of revenue uptake going forward. It sounds like you're saying that, I mean, you are secreting the awareness and obviously there is probably more towards the back half of the year as you get into some of those Medicare plans and maybe more to come in 2022. Am I reading it right? And to that end, I mean, consensus seems to be assuming about $50 million in 2021 calendar year. Does this seem reasonable to you considering all that?
spk08: Well, I'm not sure I heard the entire question. There was a little break up there, but let me just speak to, you know, we're not in a position to provide revenue guidance at this point. We need a few more quarters, I think, to get a sense of the trajectory that we are seeing. What we can say is that we are very pleased that we already have 30% of commercial plans that are providing coverage prior to their formulary decisions. And so we feel very comfortable that that's a great statement in terms of how payers are viewing the therapeutic area and the role Orgovix can play. We anticipate that we will have more commercial decisions, not only this quarter, but leading into second quarter. So our ability to monetize the demand trajectory that we're seeing looks very promising. And then, as you mentioned, in terms of Part D plans, I think Adele mentioned that we expect that some of those decisions will begin happening. We anticipate this year. But much of that coverage will actually take place at the beginning of next year. So that's when we would see more monetization of that patient volume will be more substantial as we get into the beginning of 2022. So I hope that provides clarity on what you're looking for there, Mohit.
spk12: No, this is very, very, very helpful. And maybe one big picture question. Now that cash is not an issue for you, plus, I mean, if Pfizer opts in, you could have more cash coming in. How are you thinking about going beyond RallyGolix and would that be something internal in terms of building your pipeline? I'm quite intrigued by the R&D comment that R&D would probably be stable for a few quarters. So just thinking about the future four to five years down the line, how you are thinking about using this cash, utilizing this cash to build a company for future?
spk08: Yeah, well, I'll make some intro comments and then I'll turn it over to Frank here. But I think from a big picture perspective, we have two large corporate priorities this year. The first is execution. We will execute on our launches. We will work diligently to make sure that we get our therapies in the hands of patients. And part of that execution is also our regulatory filings and seeing those through. But you've touched on the second large pillar of our strategy this year, which is really building a sustainable growth for many years to come, and that has to do with really building out our pipeline. I think our organization has demonstrated that we are an outstanding clinical development organization, and we want to leverage those strengths to really make sure that we are building our pipelines. So, when we talk about the cash, the areas of focus will be, first of all, partnering with Pfizer on building out the Relugolix franchise because we see additional opportunities there in women's health and in cancer and oncology. And so, that will be one of the key areas of priority, and we've already made significant progress with Pfizer in the discussions around the prioritization there. Second, in terms of building our pipeline, of course, we have MVT 602, and we are assessing what the different applications of that therapy could be, and we'll come back at a future date with kind of prioritization of how we see any potential development there. And then third is really the business development efforts. As you can imagine, we would stay closer to home in terms of our focus being women's health as well as oncology. Those would be the areas of prioritization in building out our pipeline. So those would be kind of the strategic direction. And I'll turn it over to Frank if you want to add any further color on how we might allocate that and making sure that we, as we look at business development, we're really looking towards the right valuations.
spk13: Maybe just to highlight again the comment I made about the directional guidance where we expect R&D expenses to go. As you said, Mo, we expect it to be constant over the next few quarters. Keep in mind, I mean, R&D expense overall has come down quite substantially, about $20 million from the same quarter a year ago. But we expect it now to be about constant because, as Dave said, we have this proven development engine, and we want to keep that engine humming. And in the first instance, we are now doing this with some lifecycle management opportunities. You heard the first example of that with the Serene study that we plan to initiate, and there are likely others to follow. And then beyond that, of course, we are now evaluating other opportunities to bring in assets that extend the MyEvent pipeline beyond the Railagolic franchise.
spk12: Very helpful. Thank you very much, Dave and Frank.
spk09: Our next question coming from the lineup. Abhi Sadia with Learing. Your line is open. Hi, good morning.
spk11: Thank you for taking the question. Firstly, just on the commercial front, maybe a question for Adele. Can you talk about how your and the Pfizer sales force is sort of coordinating on sort of splitting up the various territories, et cetera, and you kind of talked about 10 20 key accounts. Can you help us understand how much the top 20 accounts that you're focusing on, you know, accounts for the total addressable market here? And then secondly, I had a question on just sort of commercial coverage. What is your anticipation with regards to any type of prior authorization that may be required, either on the commercial side or Medicare side, in order to get valigolic?
spk08: Adele?
spk10: Just on the... commercial coverage with prior authorizations. We are not seeing any issues in that. If a plan requires a prior auth, it's usually just to ensure the patient is actually according to label. So it's been very administrative to date. It's early days on that, but I just want to signal that we're not seeing any challenges as it relates to the offices who need any support with prior authorizations, we're in there, we're helping with them, and that's going extremely smoothly. As it relates to Pfizer, as I mentioned, there's great coordination. So the way to think about it is that our field representatives, our 100 field reps, as well as their 100 plus reps are working together. They're collaborating on the highest priority positions. These are the positions that are are top decile. They're working most closely across those doctors. And as I said, we've had very good, meaningful interactions with the top accounts. These are the high-priority accounts. They could be academic centers or mostly the large urology group practices, oncology practices, multi-specialty disciplines. These are the ones that are generating A large share of the prescriptions, mostly they have in-office dispensing, and those are the accounts that we're really focused on. Some of them are volume, and some of them are about influence, especially those large academic centers that I could rattle off to you, but those are the ones that you would know, the big branding ones that we're really focused on.
spk11: I guess my question on the health planning and conference is, Sorry, I'm hearing some feedback here, but, you know, is it that highly concentrated in terms of the market that the top 20 are extremely influential or carry a fair amount of prescription volume?
spk10: They are a combination of very influential as well as they're the ones that are having a lot of volume flow through them.
spk11: Got it. Okay.
spk08: All right, thank you, Ami.
spk09: Thank you. And that's all the time we have for questions today. I would now like to send a call back over to our speakers for closing remarks.
spk08: Thank you, Olivia. Our journey to commercialization is just beginning, and it's built on a strong foundation from the efforts of last year. In addition, we now have more resources than ever to look towards product development and pipeline expansion. 2021 is certain to be a very exciting year for MyoVan, and I'm confident in our ability to deliver on our purpose of redefining care for patients. So thank you for joining us today, and I look forward to keeping you updated on our progress.
spk09: Ladies and gentlemen, this concludes MyoVan Science's third quarter of fiscal year 2020 earnings conference call. Thank you for your participation. You may now disconnect.
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