Lexicon Pharmaceuticals Inc (LXRX) 2017 Q1 法說會逐字稿

Good evening. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lexicon Pharmaceuticals First Quarter 2017 Financial Results Conference Call. (Operator Instructions) Thank you.

I would now like to turn the call over to our host, Ms. Kim Lee, Executive Director, Investor Relations and Strategy. Ma'am, you may begin your conference.

Thank you, operator, and good evening, and welcome to the Lexicon Pharmaceuticals First Quarter 2017 Financial Results and Business Update Conference Call. Joining me on today's call are Lonnel Coats, Lexicon's President and Chief Executive Officer; Alex Santini, Executive Vice President and Chief Commercial Officer; Dr. Pablo Lapuerta, Executive Vice President and Chief Medical Officer; Dr. Praveen Tyle, Executive Vice President of Research and Development; and Jeff Wade, Executive Vice President of Corporate and Administrative Affairs and Chief Financial Officer.

Earlier today, Lexicon issued a press release announcing our financial results for the first quarter 2017, which is available on our website at www.lexpharma.com, and through our SEC filings. A webcast of this call, along with a slide presentation, will be accessible in the Investor Relations section of our website. During the call, we will review the information provided in the release, provide an update on our clinical programs and then use the remainder of our time to answer your questions.

Before we begin, let me remind you that we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of XERMELO. These statements may include characterizations of the results of clinical trials of XERMELO and the market opportunity for XERMELO. This call may also contain forward-looking statements relating to Lexicon's growth and future operating results, discovery and development of other drug candidates, strategic alliances and intellectual property as well as other matters that are not historical facts or information. Various risks may cause Lexicon's actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include uncertainties related to the success of our commercialization efforts for XERMELO; the timing and results of clinical trials and preclinical studies of our other drug candidates; our dependence upon strategic alliances and other third-party relationships; our ability to obtain patent protection for our discoveries; limitations imposed by patents owned or controlled by third parties; and the requirements of substantial funding to conduct our drug development and commercialization activities. For a list and a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission.

I would now like to turn the call over to our President and CEO, Lonnel Coats.

Thank you, Kim. And let me also take the opportunity to welcome Kim to Lexicon. She's a wonderful addition to our team.

This is a very exciting time for those who have worked so hard and so long in areas of discovery and development, seeing that Lexicon now has its first approved commercial product in XERMELO, the first and only oral treatment approved for carcinoid syndrome diarrhea in conjunction with somatostatin analog or SSA therapy in adults inadequately controlled by SSA therapy alone. I've been very pleased with the progress of the launch and would go so far as to say that it is indeed one of the best launches I've had the opportunity to be part of, thus far.

Just to give you some metrics. XERMELO was approved on February 28 and all XERMELO-related websites launched within 30 minutes of the approval. The drug was available the same day it was approved. In fact, we received our first prescription within 24 hours of approval. The sales force was deployed, trained on the label and certified in the market and deployed within 72 hours, and the drug was commercially available in the specialty pharmacies within 72 hours. So this is truly a best-in-class readiness for market.

We are one of the only companies that has put product in the channel in only a few hours and filled scripts in such a short amount of time. Alex Santini, our Chief Commercial Officer, will provide you with some telling launch metrics shortly. What I would say is the uptake and demand for XERMELO has exceeded our expectations. We continue to receive early positive feedback from patients, and physicians and are seeing early adopters at leading institutions and even low-decile physicians are ordering XERMELO at a pretty good clip.

We believe these leading indicators are reasonably reflective of the speed and depth of XERMELO adoption. We have previously disclosed that we believe payers will put XERMELO through their normal review processes, and I can report that, that indeed has been the case so far. And we have received positive responses from payers. All this and we achieved net XERMELO sales of over $700,000 after only 4 weeks in the marketplace.

That said, we are early into this launch as we estimate peak sales for XERMELO at approximately $250 million. The remaining opportunity is significant, and we will continue to drive forward. So there should be no let up. One of our goals at Lexicon is to become a fully integrated commercial stage company with a robust pipeline targeting areas of unmet medical need. I'm extremely proud of our talented team and what we have been able to accomplish through a deeply rooted drug discovery program with a technology platform that has now been validated by XERMELO coming out from this platform and achieving commercial status.

We have demonstrated the power of this discovery program, and XERMELO is just the tip of the iceberg. We have created a pipeline of drug candidates beyond XERMELO with blockbuster potential targeting meaningful market opportunities. Sotagliflozin is a prime example of this. As many of you know, sotagliflozin was discovered within and developed by Lexicon, and not only is it being studied in the largest and most comprehensive Phase III program ever for oral anti-diabetic agent in type 1 diabetes, but it is also studied by Sanofi in another significantly larger Phase III program in type 2 diabetes. And you will hear more about these programs from Dr. Pablo Lapuerta, our Chief Medical Officer, shortly.

Now on Slide 4. You can see that 2017 is potentially a transformative year for sotagliflozin program with key efficacy data from secondary endpoints coming out this month from the U.S. inTandem study -- U.S. inTandem1 study and in the third quarter for the European and Israeli inTandem2 study. These results should give us a good indication of the effects of the drug on body weight and blood pressure in hypertensive type 1 patients, and will also include pooled results from both studies on time and range as measured by continuous glucose monitoring.

Last but not least, inTandem3 will read out by mid-year, and we are optimistic that it will provide differentiating data on the effectiveness of sotagliflozin on lowering A1c to below 7% with no severe hypoglycemic effects or diabetic ketoacidosis. We have already seen early indication of efficacy from the 24-week data set from inTandem1 and inTandem2.

Each of these studies demonstrate that sotagliflozin statistically -- significantly reduced A1c from baseline versus placebo at both 200-milligram and 400-milligram doses. So we remain confident in the study's outcome.

We have also introduced now into the clinic LX2761, which targets SGLT1 and is now in Phase I development with data expected later this year. Our other compound on active development is LX9211 as a novel preclinical compound for neuropathic pain that we expect will enter the clinic this year. So we are building beyond XERMELO, our first commercially launched product, with a fantastic pipeline coming out organically from Lexicon's own labs.

Now with that being said, I'm going to turn the call over to Alex Santini to discuss our commercial business. Alex?

Thanks, Lonnel, and good evening, everyone. I'm very excited to provide you with an update on the XERMELO launch. As Lonnel just mentioned, we achieved net XERMELO sales of $700,000 in the first quarter of launch, which really consisted of 21 selling days, given the timing of the launch. I am thrilled with the commercial team's efforts that has supported the increased education and awareness of carcinoid syndrome with patients, their caregivers, physicians and payers.

Now our strategic imperatives for XERMELO include: continuing to drive awareness of the disease and its burden impact; driving rapid adoption; amplifying the patient voice; and ensuring that patients and healthcare providers can gain access to XERMELO.

Our team has built a solid plan towards our key customers and has executed extremely well against these objectives. As seen on Slide 6, our field force has reached more than 3,000 health care providers. And of those providers, nearly 270 are top-tier prescribers, of which 90% have been detailed. What's impressive is that approximately 1/3 of all enrollments are being generated by the top prescribers. In addition, 19 of the top 20 high-volume centers that prescribe SSA therapy have written XERMELO scripts.

Lastly, we are effectively activating physicians and nurses in the lower deciles, and they are also prescribing XERMELO at a high rate. We are capturing scripts from a multitude of institutions around the country. On the reimbursement side, we have a very positive formulary position. 13 major payers have already been reimbursing for XERMELO, even though a decision may not have been rendered yet. That being said, I am excited to announce that our first national formulary decision has been made by Express Scripts. We now also have coverage from CVS Caremark, OptumRx, Humana, Aetna and UnitedHealthcare, where patient claims are being adjudicated and paid for.

We expect this kind of success to continue in the future as we should receive decisions from all payers within the first 6 months of launch.

As for our payer mix. We have an accurate Medicare and commercial mix, which appears to align very well with our prelaunch assumptions. To ensure access to XERMELO, we had launched the LEXCARES program, which is a patient-centric platform that helps to appropriately remove any adherence hurdles that might be present. Importantly, we want to ensure, as Lonnel had mentioned, a best-in-class patient experience.

Slide 7 depicts how LEXCARES seamlessly integrates these processes for accessing dispensing of XERMELO, coordinating insurance benefits and financial assistance options, assisting health care providers with process support and providing ongoing nursing support for our patients.

To date, 100% of physicians and patients are using our system, and I must say that it's been extremely effective, and we are seeing the positive results. We are getting early starts in a -- in large part because we have provided patients with the LEXCARES suite of tools that help appropriately remove barriers to access. So we have characterized the current state of the XERMELO launch and the reimbursement and access situation. But let's not forget about our patients, their caregivers and the physicians. We continue to receive early positive feedback from all these stakeholders. When we hear amazing success stories from patients and their health care providers, that's truly what it's all about. That is why we are here.

So what's next? We will continue to keep our finger on the pulse of the market. We are understanding the effectiveness of our field force, and we are capturing additional insights, like the fact that healthcare providers, payers and patients are expressing excitement for XERMELO, and these stakeholders [seeing all drug] is positive and that drug is viewed as a good option in patients with comorbidities like renal impairment as an example.

Turning to my last slide, Slide 8. You can see that carcinoid syndrome is a substantial market opportunity in patients who are inadequately controlled by SSA therapy. While we are off to a great start, we have a lot more work to do. We look forward to updating you on our continued progress.

I will now turn the call over to Dr. Lapuerta, who will provide a pipeline update. Pablo?

Thank you, Alex. Today, I'm going to focus on our sotagliflozin program, which Lonnel mentioned is being studied in the largest and most comprehensive Phase III program ever for an oral agent in type 1 diabetes. To fully understand why we believe sotagliflozin could be a best-in-class therapy for type 1 and type 2 diabetes, it's important to understand unmet need.

On Slide 10, you can see that about 75% of patients living with type 1 diabetes in the U.S. are not achieving the ADA target for A1c of 7%. Now half of them have A1c over 8%. These statistics reveal the challenges in managing glucose levels with insulin alone. Patients make trade-offs between effectively managing their blood glucose while trying to avoid complications like severe hypoglycemia, diabetic ketoacidosis or DKA and weight gain.

We believe that sotagliflozin effects could be far reaching by controlling blood glucose without these complications, but the proof will be in the pudding and we expect to get those answers from our Phase III study inTandem1, 2 and 3 relatively so. Moving to Slide 11.

We are running 2 pivotal trials, inTandem1 and inTandem2, which are identical studies in terms of their primary endpoint looking at change in A1c on the background of optimized insulin. Most studies have already achieved the primary endpoint, demonstrating the drop in A1c was statistically significant for both 200 milligrams and 400 milligrams at 24 weeks. Sotagliflozin-treated patients continue to show reductions in A1c, and those reductions came on top of optimized insulin, which is a very important distinction.

On Slide 12, the 0.35% and 0.41% placebo-subtracted improvement in A1c is an effect that cannot be obtained by insulin alone. That's a very high bar to overcome. What we are expecting later this month from inTandem1 is additional efficacy data around body weight and blood pressure in patients with type 1 diabetes and hypertension. Later, we will have the same data from inTandem2 together with full continuous glucose monitoring data from both studies.

Turning to Slide 15. With business confidence in sotagliflozin's ability to lower blood pressure, it's a fact that we have conducted several studies already with encouraging data. These data are from a dose-ranging study in type 2 diabetes. But dose-ranging studies in both type 1 and type 2 diabetes have shown that among patients with a baseline systolic blood pressure greater than 130, the blood pressure reduction seen at 400 milligrams in sotagliflozin are approximately 14 millimeters of mercury, placebo subtracted. That is quite remarkable. So the inTandem data -- inTandem1 data expected in May will provide important information on how differentiated sotagliflozin is. We are confident in this program and we expect to file for U.S. and EU approval in the first quarter of 2018.

Moving to Slide 14. For type 1 diabetes, inTandem3 will read out by mid-year and we're optimistic that it will provide differentiating data on the effectiveness of sotagliflozin on the proportion of patients to achieve A1c target below 7% with no severe hypoglycemic episodes and no episodes of diabetic ketoacidosis or DKA. We view this as an important measure. It integrates A1c control with the consequences of having either too much insulin or too little insulin. Importantly, we saw benefits in this endpoint in inTandem1 and 2 as well, so we remain confident about demonstrating these results in inTandem3.

One key thing to note about inTandem3 is that while we expect improvements in insulin use for all patients in the study, including on placebo, the study has a 2-week placebo run-in rather than the intensive 6-week optimization effort prior to randomization that was part of the design of inTandem1 and inTandem2.

In addition, in inTandem3, all types of insulin were allowed. The bottom line is we will help define this drug in the type 1 patient population by demonstrating efficacy and reducing blood glucose and A1c in the absence of severe hypoglycemia and DKA, the risk that patients face all the time. To achieve this with an oral agent would be an important advancement for the type 1 community. So look for that data midyear.

Now I'd like to turn the call over to Jeff, who will provide financial highlights.

Thank you, Pablo. I am pleased to provide you with a brief financial update. More financial details can be found in our 10-Q, which will be filed in a few days.

Now please refer to Slide 17 in our presentation. As indicated in our press release today, first quarter 2017 revenues totaled $18.3 million, which represented a 46% increase from $12.5 million in the prior year period. This increase was primarily due to recognition of revenues received under our collaboration and license agreement with Sanofi, which reflects revenues associated with the performance of our obligations related to type 1 diabetes development activities and in 2017 shared funding of type 2 diabetes development.

Revenue for the 3-months ended March 31, 2017, included approximately $700,000 of net revenues recognized from XERMELO sales in March. As Lonnel and Alex mentioned, we filled the first XERMELO script on March 3, so we experienced 21 selling days. As we started recognizing revenues from XERMELO, we had cost of sales of $0.2 million for the first quarter of 2017, which included finite-lived intangible asset amortization. We began capitalizing inventory during the first quarter as we expected to recover related costs through the commercialization of the product. The pre-commercialization inventory of XERMELO is expected to be sold over approximately the next 2 years. As a result, cost of sales of XERMELO for the next 2 years will reflect a lower average per unit cost of materials than would otherwise be expected.

During the 3 months ended March 31, 2017, intangible assets relating to XERMELO of $24.7 million were reclassified from indefinite lives to finite-live to assets, following FDA approval when we started amortization this asset using the straight line method over its estimated useful life. So in addition to the cost of materials, cost of sales for the 3 months ended March 31, 2017, included about $100,000 of amortization of this intangible asset.

Research and development expenses for the first quarter of 2017 totaled $43.6 million, up 18% from $37 million in the prior year period, primarily due to increases in external clinical development costs related to sotagliflozin. In connection with our acquisition of Symphony Icon, we made an initial estimate of the fair value of our liability for the associated base and contingent payments. Changes in this liability, based on the developments of the programs and the time until those payments are expected to be made, were recorded in our consolidated statements of operations.

For the 3 months ended March 31, 2017 and 2016, the fair value of Symphony Icon purchase liability increased by $2.1 million and $1 million, respectively. During the first quarter of 2017, we made the final payment in cash and common stock related to the Symphony Icon purchase liability.

Selling, general and administrative expenses for the first quarter of 2017 were $14.9 million, which represented a 77% increase from $8.4 million in the prior year period, due primarily to increased costs associated with the commercial launch of XERMELO. Income tax benefit for the 3 months ended March 31, 2017 was $8.7 million. Our valuation allowance of our deferred tax assets decreased by $8.7 million due to the reclassification of intangible assets relating to XERMELO from a definite life to finite-lived assets.

This resulted in the related deferred tax liability now being considered a source of taxable income. We recorded an $8.7 million deferred tax benefit with a corresponding reduction in our deferred tax liability in the first quarter of 2017 as a result of this reclassification.

Net loss for the first quarter of 2017 was $34.9 million or $0.33 per share compared to a net loss of $34.9 million or $0.34 per share in the prior year period. For the 3 months ended March 31, 2017 and 2016, our net loss included noncash stock-based compensation expense of $2.2 million and $1.8 million, respectively.

As of March 31, 2017, we had $259.7 million in cash and investments compared to $346.5 million as of December 31, 2016. Cash use included a final $10.5 million cash payment to Symphony Icon and significant funding for the sotagliflozin Phase III program in type 1 diabetes, which we expect will decrease as the year progresses. Most notably, we foresee that our current cash position, together with the expected revenues will be sufficient to fund operations at least through 2018. On our previous earnings call, we provided 2017 financial guidance. Today, we are reiterating that guidance on all line items. We expect to continue -- we continue to expect contractual revenues from existing collaboration and licensing agreements in 2017 to be in the range of $65 million to $75 million. And due to the early nature of our XERMELO launch, our revenue guidance excludes revenues from sales of XERMELO. That said, we expect XERMELO sales to ramp up over the course of the year. And as you would probably expect, given timing of the launch, sales will be weighted towards the second half of the year.

Turning to our operating expenses. We continue to expect that they will be in the range of $230 million to $260 million. Noncash expenses are expected to be approximately $12 million, of which $8 million of stock-based compensation; $2 million is the increase in fair value of Symphony Icon purchase liability recorded in the first quarter; and $2 million is depreciation and amortization. We are reiterating our guidance for R&D expenses of $160 million to $180 million and SG&A expenses of $70 million to $80 million. Lastly, we continue to expect our 2017 net cash used in operations to be in the range of $210 million to $225 million.

I will now turn the call back to Lonnel.

Thank you, Jeff. 2017 has a potential to be a game changer -- changing year for Lexicon with several defining moments. We will continue to execute on our launch plan for XERMELO, driving uptake momentum; optimizing and maximizing field activities; increasing awareness of the disease and the drug's differentiated profile; and continuing the strong relationships we have with all of our stakeholders, patients, physicians, key advocacy groups and payers. Another key priority that we believe will drive our long-term value is advancement of our pipeline.

As you can see on Slide 18, we have multiple near-term clinical readouts with sotagliflozin starting from May through the third quarter of this year, along with advancement of our earlier-stage drug candidates later this year. And as always, we will keep you apprised on the progress throughout the year.

At this time, I will stop here and ask the operator to begin the Q&A session.

(Operator Instructions) And your first question comes from Yigal Nochomovitz from Citigroup.

I just had a few basic questions on the launch. Could you talk about how much of the $700 million was stocking? Could you talk about the number of prescriptions and the net price, whether these are 30 or 90-day scripts and what your plans are for unlocking the data through IMS?

Yigal, thank you for the question. First as we've -- so everybody understands and know, for the first year we will not make scripts available through IMS for many reasons. But nonetheless, I would turn the first part of the question over to Jeff relative to the stocking.

So Yigal as you may recall, we have 2 specialty pharmacies that are distributing this product, and they are keeping a relatively small amount of inventory on hand, only between 2 and 3 weeks of inventory. So in general, while there is some inventory yet [the S piece] that is incorporated within that the number, it's mostly related.

And your question around scripts. The scripts are for 28 days.

Okay. And then can you comment on the net price or realized price?

So I think, as we've said previously, we expect eventually to get down to gross net that's in the 10% to 15% range. It will be higher this year, and it has been higher so far this year. But we're not getting into the details beyond that.

Okay. Got you. And then I think you mentioned that there were certain payers that are reimbursing. So just to clarify, Express, you said it put XERMELO on the formulary and these other ones, CVS Caremark, Optum, United, Humana, they are -- are those also on the formulary? Or are those just -- are they just reimbursing them in the interim and then will eventually get on the formulary, just, can you clarify that?

I'd direct your question to Alex.

Yes, I'll take that. So Express Scripts has placed us on their national drug list as a preferred branded product. So that's quite an accomplishment. 77 million lives. With regard to the other 13 major payers, there's many more than just these 13, but these are the top 13. What we've shown is that they are all adjudicating claims for XERMELO. So XERMELO is being paid for by all of the major payers. We do have a handful of other payers that have enacted policies for XERMELO and have it on their formulary. But as we had reported earlier, the majority of these payers will go through a normal review, and we're starting to see those cycles and those approvals now coming through. So we're very, very pleased with where we are from a payer standpoint.

Okay. Great. And just one question on diabetes for Pablo. Are you planning, in addition to the primary endpoint on the composite responder analysis, are we going to see the rates of hypos and DKA separately broken out when you report the top line?

The answer is yes. We'll provide the safety information consistent with inTandem1 and inTandem2 and we provided those numbers for those studies.

Okay. Great. And do you expect -- given you're not doing the optimized insulin run-in, what is your expectation for the placebo rate of events (inaudible) with DKA?

The placebo rate of events may be higher in 312 for DKA than in 309, 310 because very aggressive treatment with insulin will increase severe hypoglycemia while decreasing DKA. It's one of the reasons we have these endpoints. It balances the effects of having too much insulin too much, too little insulin and A1c control. We think it's an important way to develop our vision for the net benefit of the drug.

And your next question comes from Alan Carr from Needham.

I wonder if I you could talk a bit more about the prescribers here. You mentioned that some of the top centers were doing it, but some of the others in the lower deciles were too, if you could talk about a bit more about that. And then also the latest on your planned discussions with the FDA around submission and that sort of thing for sotagliflozin.

Thank you, Alan for the question. Let me start with the second question. First, we requested a meeting with the agency, that meeting has been granted. That will be, as we said, that meeting will be towards the end of the second quarter. We have every intent to provide the FDA with the data that we have. And we have every intent to come out of that meeting moving forward with filing as is our intent. As for your first quarter, I'll turn that one back over to Alex.

So with regard to our top tier clinicians as well as our lower decile docs, we're very, very pleased to see that we have scripts coming through from both our top, middle and lower tier decile clinicians. And the lower decile clinicians, many of them may write 1 or 2 scripts in the course of a year, and we're activating quite a few of those as the early adopters. And we're doing that with both personal and nonpersonal promotion. So again, I think we're very, very pleased with the number of scripts that are coming through on our low-decile clinicians.

Can you go over a bit more about the prescriber base and that sort of thing, its scale and how you are targeting it?

Well, we have here on that Slide 6, there's approximately 3,000 clinicians that are in our sweet spot, and we are focused on targeting those clinicians right out of the gate. Of those, there's 270 that we would define as our key influences in the marketplace, the movers and shakers, the folks that really are the leaders in carcinoid disease and carcinoid syndrome. And you can see here on the slide, 90% of those clinicians have been detailed, and 1/3 of the enrollments that we have received, thus far, are coming from those top prescribers. So again, we're very, very pleased that many of those have become early adapters and have written scripts already.

Okay. And then one just last one for Jeff. You all are responsible for sharing some of the R&D costs with Sanofi around that type 2 program. Can you give us a sense of where you stand on that in terms of the brunt of the amount that was shared between the 2?

Sure. So we have an aggregate -- we're sharing the proportion of the cost of the development program in type 2 diabetes up to a maximum of $100 million in aggregate. And we incurred a fair amount of that cost last year. The bulk of the costs will be this year, and then we have a remainder that we expect next year. So this year is the heaviest proportion of our cost in terms of our contribution that's included in all of our expense numbers we've incurred meaningful expenses in the first quarter, and we will be incurring those expenses over the course of this year. By the end of this year, there will be a relatively limited portion of that $100 million left to be incurred.

Your next question comes from Chris Shibutani from Cowen.

Just want to make sure I understand on inTandem3 the population of entry criteria for the study. This was a global study, can you give us a rough breakdown of what the U.S. versus OUS is as well? And then as far as efficacy endpoint, you have described in the past the notion of time and range. Today, you highlighted some blood pressure data that we should anticipate. When can we learn more about time and range as a component of helping us understand the profile?

So Chris, I'll speak to the time and range. We're going to do -- the time and range data will be pooled analysis that would -- we would disclose, I believe, the later part -- the early part of the summer, I believe, is our time line.

In the third quarter in connection with inTandem2 study.

That will be in connection with inTandem2. So that will be pooled analysis, and we will present that at that time. Because we think that analysis, that data is extremely important and therefore, we will extract it out that way. Relative to your other 2 questions, I'll turn it back over to Dr. Lapuerta.

I don't have an exact proportion for you of U.S. to ex U.S. sites. I would say the majority are in ex U.S -- we're recruiting in Western Europe, Eastern Europe and Latin America in addition to the U.S. And was there another part of the question that you wanted?

Blood pressure.

Yes. So what about the blood pressure did you want me to answer?

I think you provided us a sense when -- I just wanted to confirm when the timing of what we'll learn.

Yes. So we'll learn about blood pressure data from inTandem1 in the month of May.

Okay. Great. And then to quickly follow-up, U.S. regulatory update is appreciated, I believe, Europe, you had talked about 2018 as well. Should we be thinking about similar part of 2018 for that?

Yes, yes. Sort of -- Chris, we're always trying to move as fast as we can but we expect to be able to file both in U.S. and Europe by the first quarter of 2018. One may come before the other if we can move even faster, but right now, our plan is to file them in the first quarter next year.

Great. And progress for Europe for XERMELO as well?

XERMELO? XERMELO is moving pretty well in Europe with our partner, Ipsen. I will try not to give too much insight other than what they give. But we have every expectation to have an approval in Europe later this year and be in markets soon thereafter.

Your next question comes from Liana Moussatos of Wedbush Securities.

Congratulations on your great progress. My questions have been answered. Thank you.

Thank you, Liana.

(Operator Instructions) And your next question comes from Jessica Fye of JPMorgan.

On XERMELO, was there any revenue from the first quarter that was deferred revenue not yet recognized in 1Q? And also just another one on numbers, can you remind me what is or is not in your guidance related to any milestones for EU approval and/or first EU sale? And then just follow-up on Chris' question earlier, is the reason that you're giving us the pooled CGM data in 3Q as opposed to sooner, because there just aren't that many patients with CGM data in each study so you want to pool it? And the May update that we're getting for inTandem1 is that at a medical meeting? And if it is, what is it? And if not, should we also expect any data at ADA? And that 3Q timing for inTandem2 and the pooled analysis, does that mean EASD?

Jessica, you're always sharp. I would say that the pooled analysis, you're correct, because we moved very quickly with 309 and 310. These were sub-studies in both of those, and we enrolled fairly quickly. So what we decided to do was to pool analysis from both of those studies and then [data] present that later in the year. And as for the ADA, we do plan to have a presentation ADA, but I'll turn it over to Dr. Lapuerta to answer all the rest of your questions around ADA, what we're planning to do there as well as your additional questions around the data.

At ADA, we plan to have a splash with studies from our dose-range -- results from our dose-ranging study, our Juvenile Diabetes Research Foundation collaboration, that's study 204, and then inTandem1 and inTandem2. Look forward to a good update at ADA with information on our programming in type 1 diabetes. As far as EASD, the EASD does not have late-breaking clinical trials. And so having the data available this summer does not mean that we'll be presenting it at EASD. But important data would be made available in a very high level summary form, publicly anyway.

As for your questions on the first quarter and the financial accounting, I'll turn it over to Jeff.

Yes, so we do have deferred revenue from -- in the first quarter, less than $1 million in total, but we have some deferred revenue from XERMELO in the first quarter. We also are expecting to have some milestone payments from Ipsen relating to approval during the course of 2017. So that is included within our collaboration and license agreement financial guidance.

Okay. And how much of it from Ipsen is included in the guidance?

I don't think we've disclosed the exact amount of that.

Okay. And just a follow-up on an earlier question with respect to the 1,400 patient safety study, the geographic breakdown, you said a majority are going to be ex U.S.? Do you know kind of what percentage, ballpark? I'm just thinking about that as it relates to the kind of pump usage in the U.S. versus outside of U.S.

Yes. No, I don't have an exact percentage for you for inTandem3. One thing to note is that we do expect generally less pump use than we had in inTandem1 because it's being ex U.S. but also we allowed patients on premixed insulins. So some patients still are receiving these mixtures at 70-30 NPH regimen. That also means that the pump use will be lower.

(Operator Instructions) And your next question comes from Stephen Willey of Stifel.

I'm just wondering if you would be willing to provide a little bit of color around the number of patients who are on an adjudicated XERMELO script, I guess, at the end of the quarter versus those that have been given the free 2-week drug supply via the quick start program.

Great question, Stephen. We're not giving guidance around that yet. But I would say, stay tuned as we get more time under our belt. But I will tell you the majority of the prescriptions are commercial prescriptions.

Okay. And then with respect to the end of 2Q meeting that you've been granted with FDA, is it safe to assume that you're going to have all the CGM and inTandem3 data available for that meeting with the agency?

No, we would not have that data in time for that meeting but we will have a complete assessment of all of our efficacy and our safety data on the 2 pivotal studies.

So I guess just given the importance of the CGM data, both from a patient and physician perspective, I guess, why schedule the meeting ahead of having that data available to discuss with the agency?

Well, what will be discussed with the agency is the primary endpoints, right? And that's what's going to be important and also making sure with the agency is there anything else we will need to get ready for our filing. That's the primarily nature of that meeting. We'll have many other opportunities to engage the agency, particularly as we have our Phase III -- in a Phase III meeting with them, which will be different from what we're having right now, and we will have other opportunities beyond that to engage with them. But right now, it's really to lay our case and make sure we have everything locked and loaded to prepare for our filing. Because from the time we have that meeting until the first quarter, there's very little time to get ready to file. So we want to make sure we have everything lined up before then.

Understood. And then just lastly, I think there's been a competitive dual inhibitor announced by a big pharma, and I think they're kind of advertising it as part of their Nash portfolio. And I think maybe looking at it as a weight-loss drug. So just curious if there's any kind of additional freedom to operate on the Sanofi trial under this, the sotagliflozin collaboration outside of diabetes.

I'll just say imitation is the greatest form of flattery. But no, we continue to do work to figure out what additional things we want to do. But right now, our focus in the alliance is getting our Phase III programs fully up and loaded for type 2 diabetes and getting ready to file in Europe and the U.S. for type 1, but we always will have life cycle management discussions. And we think we have appropriate opportunities to do that beyond the work we're doing right now as priorities.

And we currently have no further questions in queue at this time.

Well, with that, I'll just close you out by saying that I'm very proud of our team, pleased with our readiness and executions and just totally excited to provide a much needed new first-in-line, first-class, I should say, first-class therapy for carcinoid syndrome diarrhea patients. We look forward to keeping you informed as we make progress and have new developments. In the meantime, we will be participating in the Bank of America Merrill Lynch Healthcare Conference in Las Vegas, May 18. Hope to see many of you there, and we will engage more at that time. With that, I'll say thank you and have a good evening.

Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.