Calliditas Therapeutics AB (CALT) 2022 Q2 法說會逐字稿

Welcome to the Calliditas Therapeutics Q2 2022 Presentation. (Operator Instructions). Today, I'm pleased to present CEO, Renee Aguiar-Lucander; CFO, Fredrik Johansson; and President, North America; Andrew Udell. Please begin the meeting.

Thank you very much, and welcome to the Q2 report for 2022. If you would go please to Page 2, which is the disclaimer page. I just would like to draw your attention to this page related to forward-looking statements and refer you to the company's reports and other filings including this which contains risk structures and other relevant information. Let's turn the page.

So a couple of highlights for Q2. So in Q2, Calliditas achieved another major milestone as we received a positive opinion from EMA related to the conditional approval of Kinpeygo in Europe. The European Commission subsequently formulated products and issued our market authorization in July, which are now in process of transferring in order to STADA in order to enable the launch of Kinpeygo in Europe.

Related to the approval and launch in Europe, we expect to receive milestone payments amounting to EUR 12.5 million from STADA in the second half of this year. The results from the first full quarter of commercial activity of TARPEYO resulted in $6.6 million of net sales, which we believe reflects the continued build in our commercial launch plan, and we're very encouraged by the strong level of interest and engagement that we are seeing. We will get some additional color from Andy later on in this presentation.

In this quarter, we also reported dosing and randomization of the first patients in our proof-of-concept study in health -- head and neck cancer, where we are studying the efficacy and safety of our lead candidate from our NOX inhibitor platform, setanaxib, in conjunction with pembrolizumab.

Could you turn to the next page. So in terms of post-period events, we have amended the existing agreement that we have with Kreos leading to significant more flexibility around the drawdown of the final tranche under the credit agreement. We are happy to have a very collaborative and productive relationship with Kreos as we have with all of our partners as we continue to execute and deliver on our plans.

Finally, based on what we have been experiencing and seeing in the marketplace in the U.S., we're excited to announce that we plan to expand our sales team to 60, which we expect to be fully deployed at the start of Q4. And as you may remember, to those of you who have been following these calls, we have always said and made it clear that we will assess as we get more information in order to ensure that if we do feel that we need to expand the sales force that we can do so. And so we are really excited and find that this is very encouraging from our perspective, and we look forward to provide you with additional color as we continue to build our U.S. franchise.

And with that quick introduction, I'm going to hand over to Andrew Udell, President of North America, to take you through some more details regarding our U.S. commercial activities this quarter.

Thanks, Renee. So moving on to Slide 5. I'm excited to discuss our ongoing launch progress and growth with TARPEYO in the United States. The receptivity from nephrologist patient and caregiver community remains extremely welcoming. It's abundantly clear that IgA nephropathy represents a disease with an unmet need, and those connected to the IgA nephropathy community seemed enthusiastic about TARPEYO, a treatment that was designed specifically for this disease.

During the second quarter, the unaided and aided awareness of TARPEYO continued to rise to 70% and 80%, respectively. From launch through the second quarter, we have had 450 enrollments. Q2 enrollments more than doubled those from Q1. Our prescriber base also continued to grow to 314 total prescribers of TARPEYO since our launch. In addition, about 25% of these prescribers have written and enrolled multiple patients. As a result of our efforts, we ended Q2 with $6.6 million in net sales. This number more than triple Q1 and gives us approximately $8.5 million in net sales for the first half of the year with many recent activities still expected to generate additional interest.

Next slide, please. As anticipated, we have further improved our market access. According to publicly available resources, well over 80% of the U.S. lives are for TARPEYO. When we look at our TARPEYO-treated patients, we see that almost 3/4 are commercially insured. This slightly exceeds our prelaunch expectations. At the end of Q2, we had a greater than 80% reimbursement approval rate and about 1/4 of our enrollments while going through the reimbursement process. As expected, with this success, we need to add resources to our patient support program to TARPEYO Touchpoints in order to address the increased volume and reduce the number of pending patients due to the reimbursement process.

Next slide, please. Following the required FDA review of promotional materials for accelerated approval of medications -- approved medications during the second quarter, we launched our branded campaign. In addition, during the quarter, we launched our unbranded IgA nephropathy patient portal called IgAN connect. Both the branded and the ongoing unbranded campaign are directed to the appropriate audiences and delivered through several different medium, including digital, print and face-to-face promotion.

Our specialty sales team has continued to build on the results achieved in Q1. In light of the broad demand, we have initiated expansion of our sales force with the aim of further bolstering our reach and frequency of contact, empowering our sales team to support the demand from the physician audience and increase the individual frequency of meetings and face-to-face interactions. Upon completion, as Renee said, we'll have 20 additional territories for a total of 60 territories.

In summary, while still only 5 months since initiating our commercial launch, we remain enthusiastic about our progress and the receptivity the market has for TARPEYO. With that, I'd like to turn it over to Fredrik to provide the financial review on the next slide.

Thank you, Andy. I will now present to you the financial overview for the first 6 months of 2022, and all numbers are presented in SEK as always.

To start with, we present SEK 113.8 million in net revenues for the period for the same period last year. We did not report any revenues -- this is the first full quarter we report net product sales following the TARPEYO FDA approval in December last year due to start of sales end of January this year. And out of the SEK 113.8 million in net revenue, net product sales from TARPEYO for the period amounted to SEK 81.6 million or $8.5 million, which we are very pleased to announce. As you remember, we also received an upfront fee in the first quarter from average of SEK 28.8 million, which was equivalent to $3 million for the extension of the average license contract to South Korea.

Our total operating expenses in the second quarter was roughly in line with the first quarter. And with that, our expenses for the 6 months period amounted to SEK 529.0 million compared to SEK 310.2 million for the same period last year. Out of the total operating expenses, marketing and selling expenses increased by SEK 129.4 million to SEK 207.2 million compared to SEK 77.8 million for the same period last year. The increase in marketing and selling expenses originated from us having a full commercial team in place from the start of Q1 this year, including our sales force compared to the same period last year, when we were just starting to bring up the commercialization.

The cost for research and development increased by SEK 44.5 million to SEK 209.6 million compared to SEK 165.1 million for the same period last year. Increase in R&D expenses origins primarily from the preparations and ongoing operations for the setanaxib trials, where we randomized the first patient in the head in the trial in the second quarter, and we now have the 2 setanaxib trials fully up and running.

Administration expenses amounted to SEK 107.4 million for the period to be compared with SEK 65 million for the same period last year. increase of SEK 42 million between the periods was primarily related to general cost increase for administration due to organizational growth and increased complexity being accompanied in the commercial stage. This leaves us with an operating loss of SEK 418.2 million for this period compared to an operating loss of SEK 310.2 million for the same period last year.

The cash flow used in operating activities for the period amounted to SEK 416.7 million compared to SEK 267.1 million for the same period of the previous year. The cash flow from financing activities for the period was SEK 295.9 million, and this is mainly related to the drawdown in the second tranche of the Kreos loan of SEK 236.5 million in the end of the second quarter and the exercise of the warrant program for 2018, '22 for close to SEK 64 million at the end of the first quarter.

As of end of June, we continue to report a strong cash position of SEK 846.8 million, down from SEK 955.5 million from end of December. In addition to our cash at the end of the second quarter, we have $25 million remaining unused in the Kreos credit facility with the third and loss tranche of $25 million can be drawdown from now and up until December this year.

And as Renee was mentioning earlier, we expect EUR 12.5 million in additional milestones from our partnership with STADA in the second half of this year.

The progress of the commercial launch of TARPEYO in the second quarter continued to support our view that based on our current operational plan for current cash position and amounts available under our loan facility. We believe we have sufficient funds for our planned operations and capital expenditures until we become cash flow positive, which currently is projected for the first half of 2023, subject to continued successful commercialization of TARPEYO.

That was all for me. Thank you, and now back to you, Renee.

Thank you very much. And so in summary, before we open up for questions, we are extremely happy and proud about the conditional approval that was achieved in Europe of Kinpeygo, making it the first and only treatment that's approved for IgA nephropathy in this region. The net revenues of $6.6 million in the U.S. for the quarter reflects the tripling of revenues compared to Q1, which we believe is really kind of an encouraging growth in prescribers as well as in enrollment during Q2. And we continue to see a broad interest from U.S.-based physicians and patients.

But as we've mentioned previous as well in our calls is the same challenges remain, obviously, especially product reimbursement process is challenging for some nephrologists' offices. This is not an area that has been used to continuous introductions of new products and approved products in specialty categories. And obviously, as a consequence of the pandemic, in many cases, restrictions still remain with regards to access to many of the hospitals and clinics. And that's really something that, as we continue to build on our experience, we are getting increasingly better addressing and finding solutions for.

In terms of achievement of the target of U.S. lives, obviously, we have achieved that target also with well over actually what we were expecting at this time. And we look forward to the continued growth of TARPEYO as more patients are able to gain access to the drug, which has been specifically designed to address this rare disease of IgA nephropathy. So with that, I'm happy to turn it over in order to take any questions that there might be.

(Operator Instructions) Our first question comes from Jon Berggren at Kepler Cheuvreux.

I have 2. So the first one, now when you see that over 80% of U.S. lives are covered for TARPEYO, can you describe what the consensus for prioritization requirements looks like? And if there are any changes to what you saw after the first quarter?

And then for the second question, the last quarter, you mentioned that only one patient has cancer treatment TARPEYO coverage. So can you give you an update the number now after Q2, please?

I'm sorry, I didn't hear exactly. Sorry, the consensus of what, sorry?

For prior authorization requirements, the consensus, what do they look like and if there are any changes to what you saw in the first quarter?

Okay. Great. Well, Andy, why not you go ahead and take that question.

Sure. Sure. Look, I feel like we've met our expectations for a specialty product. As we anticipated, it's covered under a higher specialty tier. And generally speaking, the product has to be written by or in concentration with the nephrologist has to have a patient with a biopsy diagnosis of IgA nephropathy and on blood pressure lowering medicine. That seems to be consensus. And the answer to your question, it really hasn't changed since we launched.

As far as your second question on cancer patients, I don't have the exact number due to prior auth. But I can tell you, as I mentioned, we're getting greater than 80% reimbursement or approval rate so far through our -- through the process and processing. So that's well above expectations for most products at this stage.

Our next question comes from Ludvig Svensson at Erik Penser Bank.

So I would just like you to clarify the dynamics behind the enroll the patient, actual patient on drug and when you book sales for these patients, that would be very helpful.

I guess I'll take it initially, and Fredrik can address the revenue approach. So obviously, the -- what we are reporting and what we can share is, obviously, the number of enrollment, which really is like the prescriptions that are written by physicians. And as Andy has pointed out, there is why -- there's a range in terms of how long it will take for those patients to get on drug, but there is, obviously, in any point in time, really a portion of these patients that are in process because there is always going to be requests for information for specialty products. And so I think the numbers that we have provided from that perspective is really kind of what we can share at this point in time. .

Fredrik, do you want to assess maybe the booking revenues?

Yes. So we book the revenue when we ship the product to our specialty pharma. So -- and that means that they have sort of expected shipments. So yes, that's it.

Yes. I mean we don't -- I mean, as I think we mentioned this as one before. Obviously, there's only one specialty pharmacy. So I mean it's not like you have a massive stocking effect because there's lots of pharmacy just sitting on drugs that may or may not kind of be expected to go out. So I think there's a fairly streamlined, I would say, process here, where obviously the specialty pharmacy can order additional kind of drug in a very kind of ongoing basis.

Yes, that goes out, and it's just -- they're not going to sit on tons of medication. They have the ability to order as frequently as they want to specialty pharmacy.

Okay. Perfect. That's helpful. And for my second question, you have previously guided for rebates of 15% to 20% on the gross price. Is that what you're actually seeing now that you're in commercial state, so to say?

Fredrik, maybe you want to take the definition and maybe, Andy, you want to follow up?

Yes. So what we said is in respect to a gross to net in that range. So -- and that is not included sort of an expected large rebates for. But I think you can probably expand that, Andy. .

Well, just from the -- I think that from the contracting rebating basis to date, we have not entered into rebate and contract, any rebate or contract agreements that haven't been mandated by regulation as it relates to payers and insurers. .

Our next question comes from Maury Raycroft at Jefferies.

Congrats on the progress. I was going to ask a question about the -- just the sales force expansion to 60. Can you talk more about what drove the decision to expand? And do you expect this to be the final U.S. sales force size? Or could there be additional adjustments as you advance in the launch?

Sure. So I guess the general kind of view is that I think that we have -- we did a lot of this work prior to launch. And I think you were following up on this very, very closely. And I think the number that we have now kind of arrived at, I think -- from my perspective, I would not foresee that to kind of grow significantly from here. We can always be surprised, which is fine. But I guess I don't really expect to -- expect that to happen.

Andy, maybe you want to talk a little bit about the plan and how we drove that discussion.

Sure. Hi, Maury. It's pretty straightforward. We've seen a broad demand in the prescriber base of TARPEYO, and we want to increase our reach and frequency to our audience. That's -- it's as simple as that we assess things constantly. We're constantly looking at things targeting segmenting and do you want to get the appropriate reach and frequency to your audience to optimize things. And so as far as the future, like Renee said, I don't see large changes, but maybe we'll be pleasantly surprised that we might need something should things continue to grow, I don't know, but not foreseen in the short term.

Got it. Okay. And then I also wanted to check to see if you're providing any more specifics on sales or launch expectations for the rest of the year?

So I mean we have kind of had a lot of discussions around whether we can do this. And I think that what we're seeing is just a strong kind of growth in enrollment, but there is this obviously -- it's difficult to kind of predict the conversion and the rate in terms of when actually those will turn into revenue. And it is obviously also reflected in the range that we see among our analysts of 30 million to 50 million for the year. And I think it's difficult for us to kind of, at this point in time, I think, be super specific in terms of where we would expect to kind of end up for the year.

Got it. Okay. And last question for me. Just wondering if you can provide more granularity on how the drug is being prescribed in the real world with regards to label and the inclusion-exclusion criteria from the Phase III? And also if you're getting any newly diagnosed IgAN patients?

Andy, do you want to take that?

Sure. It's early, and I think it varies. I can't really give you very much specifics on that, unfortunately. But I think we haven't heard feedback that differed from what we've said all along, which is these patients, some of them are diagnosed and they're -- it's a heterogeneous progressing disease, right? So some of them are already diagnosed and they're more severe, more rapidly progressing at diagnosis, and some, it takes some time. So I think that the product has been positioned appropriately, and it's similar to what we've talked about all along.

And I think it is -- I mean I think what we're seeing is also the fact that obviously, it is up to the physician to -- really to decide whether they feel that this patient is at risk of a rapid progression. So there is a broad variation in terms of what we see with regards to different patients that the physicians are considered to be appropriate.

Our next question comes from Yigal Nochomovitz from Citigroup.

And I just had a question regarding some of the prescription trends. So it was interesting that in Q1, you had 111 subscribers and then we had almost the same number of enrollment 134, so ratio of 1:1. And then in Q2, you had triple -- 314 subscribers and also tripled the number of enrollments 315. So again, 1:1 ratio. So what is the implication of that? Does that mean that every time you get a new subscriber to get one on patient? Or is this -- is there a different interpretation?

Andy, do you want to start?

Yes, sure. I think there's a different interpretation in the sense that about 1/4 of our prescribers have written for multiple patients. So I think this is a disease that they're not calling up their patients unless the patients which happens, which patients do go to the prescriber, they're seeing them on their normal cadence, okay? And they see these prescribers quarterly. And so as we reach prescribers and these patients come in, you're seeing a cadence of patients coming in and getting put on drug. So while I understand your numbers and your math, I think I can tell you that about 1/4 of these prescribers have multiples of patients on the drug. .

I think obviously the number of 314 prescribers is total number of prescribers over the -- so it's not necessarily all new subscribers.

Got it. And what's your understanding in terms of the total number of expected prescribers in the U.S. that you intend to reach eventually?

Sorry. No, no, I was just going to say maintain our audience size of the market. It seems to be about 3,700 to about 4,000 doctors, we'll call it, approximately that in writing for the vast majority and seeing the vast majority of IgA nephropathy patients. So that would be your target point in general.

Okay. And also, can you just remind us in terms of the competitive positioning versus your competitive drive, the distributors by sensing, what is the differentiation that you can lead the field force in the change in terms of how TARPEYO differentiates from (inaudible).

I mean I guess at this point, obviously, there isn't and there certainly shouldn't be any kind of marketing of a drug that hasn't been approved, and we don't actually have a lot of information as to what the profile of that drug looks like. And so I think that is -- we don't really get those kind of questions from physicians. I don't think the physicians are really kind of thinking about it, quite honestly. I think the physicians are kind of dealing with what they have and can and what alternatives they can use today.

I think once we actually kind of see the profile is presented is approved, and we also then obviously, hopefully, we'll get a little bit more information around the actual approval of the drug. And what the label says, I think that will facility a discussion in terms of how physicians may be using the 2 different drugs in patients. I think obviously, as we know, it's the heterogeneous population. And my assumption is that there will be combination treatments.

There will be certain patients that physicians believe are better suited for one or the other. But obviously, this is a market that really has not had any approved drug. And I guess, I would look for all of our benefits that actually the market is big enough for 2 drugs to do incredibly well, considering that this should be a significant market opportunity, where I'm sure physicians will find the right patients and appropriate patients for different profile of the drug.

Our next question comes from Dan Akschuti at Pareto Securities.

Congratulations on the great progress that you're showing, and I think that reflects the (inaudible) personnel who will further capitalize the sales. So just one question on the expectation also on the European side. The launch is expected in the second half. Do you have a more precise guidance for TARPEYO?

So we are in the process of transferring the market authorization holdership, which is a requirement before STADA is in a position to launch. But I can say is I think that the process from the -- this an administrative process managed by the regulator. And I think so far, it's been going very smoothly, and we've not had any delays or any issues. And obviously, we launched this administrative process literally at the time that we received approval, but it is difficult for me to say exactly when that will be transferred because it's really up to the kind of the administrative process of the regulator, which is why whether that will happen in September, which I think it's very difficult for me to say because it's just we're not in control of that process.

Okay. And you don't have any bottlenecks on the commercial supply side? Is that both for the U.S. and Europe security to kind of serve the big demand for this year and the increase in demand?

Yes. We are actually -- we don't foresee -- at this point in time, we don't foresee any kind of supply issues not in the U.S., nor in Europe. I think we have had a good team in place and some good deal of planning. And so from the visibility that we have right now, I think we feel pretty, very good about that.

Okay. Great. And could you comment a bit how the enrollment has been going on in the holiday period now we're in July and early August?

Yes. I mean I think as expected, enrollment kind of remained at a good level. But it is the summer period, and so we're not kind of -- we're not really expecting any kind of additional acceleration from where we are until the end of the summer because, as Andy also mentioned, obviously, a lot of these prescriptions and enrollments come from the kind of normal cadence in terms of when physicians will see patients. And as you can imagine, some patients are on holiday during the summer period. So I think we're encouraged about the level that we are at, and I think we're expecting hopefully to see an acceleration at the end of the summer period. .

Okay. And if you could share any feedback that you've gotten maybe directly from patients or physicians and how the patients are doing on drug? Has there been any like dropout? Or...

I mean I'm not aware of any. I think that the only access we have to that is probably through social media commentary potentially. But Andy, why don't you comment on that?

Yes. The average -- yes, look, it's early. The average patient has been on -- gotten around 2 refills, the average of all our patients. So it's hard to make any general comments there. But as Renee said, I mean, we listen and we haven't seen anything abnormal or anything to date.

Okay. Great. And one last question on (inaudible) there still impact to get the first one at data later this year and safety benefit, a bit slow?

So I think that in terms of the recruitment, I think it is -- as all of these things, I think they are challenging in terms of getting -- particularly getting sites to actually kind of communicate and kind of get on the track in terms of getting everything in line and open and able to screen patients. But I think it's still early in the process. And so we don't have any reason at this stage to adjust the time lines. We'll have to wait and see a little bit later and see we need to push them out if that becomes necessary. But today, we don't really have information that will warrant us to change our expectation.

Our next question comes from Erik Hultgård at Carnegie.

Congrats with the progress with the U.S. launch. I have a couple of questions. First, going back a little bit on the previous question on where -- what type of patients that are getting TARPEYO. I know it's early in the launch. But could you talk a little bit about higher (inaudible) flows in order (inaudible) exposure I was just wondering how TARPEYO assisting in that algorithm. That's my first question.

Then my second question is whether the additional 20 sales reps will increase the sort of targeted prescription base? Or is it almost entirely to increase the frequency?

And related to that, how do you measure -- or do you measure conversion on core frequency to prescription? Is there any KPIs there you would like to highlight? Are you underperforming in any way in that (inaudible) that is leading to the repricing of the sales force?

Okay. I guess I'll take then I'll comment and then hand over to Andy to describe. I think just one point that's probably worth noting is obviously that we don't really get access generally to the history of all these patients in terms of what they may or may not kind of have been on or be on, et cetera. So I think it's not something you should not assume that we would have detailed background or medical charts of these patients that are being prescribed the drug, which makes it difficult for us to kind of answer these kind of specific questions.

In terms of the SGLT2s, I mean I think, again, this is a group of physicians that generally are used to trying quite a lot of different things that are available to them. I would expect that they are trying SGLT2s as well. But I can't say that we've heard anything specifically around that use that would drive any kind of decision-making or anything, any concern at all from our side. Andy, maybe you can add comments.

Yes. No, I'd echo that as far as the information we get. And the patients, I'm sure this is -- there are patients that may be on SGLT2s as well as our product if we're not seeing it as a requirement or anything like that. And so different physicians have different protocols and on where they would place them, but we're not privy to all of those.

As far as the sales force, the additional 20 reps, it's probably a combination of both reach and frequency. Obviously, when you have more sales territories, you have more sales reps. You have smaller territories, so they're able to increase the frequency for those that are important and the reach to reach some additional physicians with some frequency as well.

So as far as KPIs, you asked, we measure everything, and that's what goes into our analytics and what determines our sales force sizing.

Our next question comes from Rami Katkhuda at Life Science (sic) [LifeSci] Capital.

Congrats on progress. A couple of quick ones for me. First off, I guess is there a set of nephrologists that are waiting for results from Part B of the NefIgArd study? And do you expect, I guess, the eGFR data to kind of expedite the uptake of TARPEYO?

We are not -- I mean, this comes from obviously talking both from our medical affairs team and commercial community. I really don't think that, that is something that we have run into actually. I think it's actually on the other side. I think our physicians are delighted that there actually is a drug that is approved for this indication. And obviously, this is, by far, the most amount of information that they had related to other -- how this drug actually works in this disease.

So it's not anything that we have run into. Though, I am sure that if you call up a physician certainly the more data than better. I don't think I ever heard a physician say that they're happy with what they have. I'm sure that they would like more, but I don't think -- I certainly don't have the impression that this in any way, shape or form is stopping people from using an approved product. But Andy, I don't know if you have a different -- or maybe you have some more additions.

No, I would echo that. I don't think I'm sure there are physicians that want more data, as you said, and there always are. But at this point, in general, from the uptake we've received and the amount of prescribers prescribing and enrolling patients. I don't think people are really sitting on the sidelines, and market research shows that as well, confirmed that they're not sitting on the sidelines waiting for a long period of time or a lot of usage before they're going to and give a trial or start putting patients on our product.

Got it. Makes sense. And then once again, congrats on the EU approval. I guess, can you touch on the interactions with the EMA there and whether the label is kind of more stringent when it comes to the UPCR language compared to what the FDA put out?

Yes. No. So I think that -- and I think we've mentioned this before. Obviously, I mean, there is a slight distinction between how EMA potentially looks at this versus the FDA, which is that the EMA has not kind of communicated that they've expected proteinuria as a surrogate marker for -- in this disease. They really do look at the totality of the data as they do kind of for all orphan indications. And so I think it really goes towards the strength of our overall data package and, obviously, also the eGFR data that we're able to show during the treatment period, et cetera.

So I think that it was -- I would say there was a reasonably smooth process with EMA. I think that they actually have quite different approaches in terms of what they look for and what they are concerned about to some extent. But there are obviously also several kind of commonalities.

But I think -- that, I think, is probably the only difference kind of technically between the agencies. And so I think maybe that is what led to that more kind of stringent, but also know that EMA was very clear about the fact that this was a predefined analysis. And they really felt strongly that they just wanted to fit within whatever was predefined.

Our next question comes from [Jacob Michael] at (inaudible).

So my first point is, are you seeing patients that were enrolled in Q1, continued treatment into Q2?

And my second one is, what is the length of a inscription, -- is it 1 month? Or do you not just prescribe for 9 months and then the patients get to spend every month?

Yes. No, I mean, obviously, the -- in order to kind of get to these revenue numbers, obviously, there is an assumption, obviously, that patients are continuing on drug, and they are getting monthly refills. But obviously, in terms of what -- and there may be some variation there. I don't know if -- Andy, if you have any more details, but clearly, most prescribers would use the 9-month period is my assumption or 10-month period and then, after that, make any adjustments or additions as they kind of see how their patients progress during that period of time. But Andy, I don't know if you have a better view on that.

No, I think I'm exactly right. I think that's exactly right to your first part, patients enrolled in Q1. Certainly, as I mentioned earlier, the average has been 2 refills, but we have patients that have been on longer the highest -- we have someone that's had 7 fills already. So obviously, that patient started in Q1.

And as far as the prescriptions, the doctors, nephrologists seem to be prescribing overall for the 9 months treatment is in the goal on the prescription. Obviously, they need to get refilled each month, but they bill for 30 days at a time, typically, which is most typical.

Our final question in the queue comes from Annabel Samimy at Stifel.

I imagine most of them have been asked already, but I would have some questions on the reimbursement challenges you're seeing. I mean higher than 80% approval rate is pretty good. So what -- exactly what kind of reimbursement challenges are you still seeing?

And I guess, to that effect, are you seeing any improvement in the time from patient enrollment to prescription fulfillment? Or is onboarding these patients been streamlined over the course of the quarter as you're going through this process?

And I guess the final question also starting a reimbursement, and I don't really know this but, but do you envision that, after 9 months, you will have challenges from players because the data really only goes high to 9 months? Or do you expect that patient will have to, I guess, retire off? Or will they just be able to continue to get prescriptions as they did before? So maybe you can address those questions.

Andy, do you want to take that?

Yes, sure, sure. Look, I think as far as -- I'll start with the first part as far as coverage. I think the challenges, I think this is exactly as we anticipated and expected for a specialty product, okay? So what's been consistent and consensus, as someone asked earlier, is certainly that it needs to be written by or in consultation by nephrologists, which they have to the patients that have this diagnosis, the IgA nephropathy and beyond blood pressure lowering medication, which all comes from our Phase III trial, right, exactly how we position the patients.

It's after that, that it would vary plan to plan. We see different -- sometimes they'll look at new PCR and other measures, and others don't. So it really varies after that. But as you said, the good news is above expectations. We have greater than 80% of approval rates, right? So that's really encouraging, and that's what we kind of look at.

Now as far as enrollment that we've seen improvements in times, for those that are being processed, we're seeing, on average, there's a wide range, right? But what we have been seeing, on average, those are less than 30, and that is trending down. But I have to say -- I mean that's why we're really proud of that. That is good at this point. If you compare to other products typical to ours, we're never going to be satisfied with that, okay?

If you told me if I told you it was 10 days, I'd want it to be 7 days. So we are constantly working on doing that to get the medication to the patients as quick as possible.

And then as far as the 9 months I think you asked would the patient need a renewal or something. What did you ask, I'm sorry?

Yes. I mean, sorry, to restrict them after that 9-month period.

So I think what's going to happen, obviously, we haven't hit that point yet. But as far as from the payers' review and how they're handling it, it's really 10 months, right, because there's a paper period, and that varies. But -- and that also will probably vary plan to plan. But I think it's too early to tell what exactly will happen, right?

And I think what we'll see is it's going to vary plan to plan and I think patient to patient. Remember, these -- some of these patients start, they may have 4 grams of proteinuria, and they're still going to be judging -- they're still going to be looking to where they are at that point, the payers. So I think if they still qualify and meet the criteria, I don't see why they wouldn't get reapproved for another course of therapy or extend it.

Our next question comes from Christopher Uhde at SEB.

Congratulations on continued progress. So in terms of coverage and approval rates, just continuing on that, I guess, previously, you talked about how -- in the general of the process works that you get authorization sort of more or less automatically while negotiations are being finalized. How confident are you that this situation in terms of reimbursement as it is at the moment, 80% and so on approval rates will continue once it is finalized with the various payers?

And then second question I have is it sounded -- I didn't -- it may have been asked, but I couldn't quite catch it. But is there -- do you have any comments on discontinuations so far? And do you see any -- are you -- do you think it's worth considering an additional formulation with -- that would allow you to have fewer pills to improve adherence?

Do you want me to...

Yes, in terms of -- I guess in terms of the last question in terms of kind of discontinuation in formulation, I mean, I guess, again, this is fairly early, I guess, what we would expect, right? It's probably that discontinuations would be not dissimilar to what was in the clinical trials. I mean if there are discontinuations, my guess is that they'll be single digits. And I think that's probably not fairly typical to be, I guess, in terms of medications. Not all patients end up wanting to take their medication. And so that, I guess, would be our expectation. But we certainly haven't seen anything that was -- that would say that, that is not a realistic expectation.

In terms of formulation, I mean that is obviously something that we're always working on life cycle management, improvement and all of this. So that's something that we would have as kind of part and parcel of our kind of future plans, but obviously not something that one would expect to do immediately after kind of approval or launch.

Yes. And as far as the -- your comments on the 80%, I'm not sure if you realize there's 2 80%s here. One is the outcome, over 80% of U.S. lives are covered. So that has had an outcome. And the other is those going through the process already over 80% of those that had an outcome have been approved.

So I think this is the managed markets or the payer information is generally real time. It's pretty far down the line now. We're pretty -- very pleased, I should say, with where we've landed on a lot of these plans. While it certainly will continue, there are thousands of plans, we're going to see a little ticks up in the future, but I think we're very pleased that where we sit today. This is -- these are really strong numbers.

No, absolutely. So I guess what I'm wondering is, well, as plans get finalized, will the 80% approval rate continue is really the question.

And this is real time. So we gave you -- this one has been -- as of now, I don't see why that would change, I mean, the patients are the same. If they've made their decision or plan, this is what they're they've decided how they're going to cover the product and 80% of being -- getting reimbursement approval for those that have come to a conclusion already. So I don't see why -- we're very pleased. I don't see why this would change dramatically as far as the reimbursement approval rate.

I think that -- we would not expect that change.

And we have no further questions on the phone, so I'll hand back to the speakers.

Thank you very much. Thanks for all your questions. We appreciate them. Thank you for listening into our Q2 report, and we look forward to speaking to you again, hopefully, in November. Thank you.