Roivant Sciences Ltd (ROIV) 2023 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Roivant 1Q 2022 Earnings Call. (Operator Instructions). Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Paul Davis, Head of Communication. Please go ahead.

Good morning, and thank you for joining today's call to discuss Roivant's financial results for the quarter ended June 30, 2022. I'm Paul Davis, Head of Communications at Roivant. Presenting today, we have Matt Gline, our Chief Executive Officer.

For those dialing in by a conference call, you can find the slides being presented today as well as the press release announcing these updates on our IR website at www.investor.roivant.com. We'll also be providing the current slide numbers as we present to help you follow along. I would like to remind you that we are making certain forward-looking statements during today's presentation that reflect our current views and expectations, including those related to our financial performance and the potential attributes of our products and product candidates.

We strongly encourage you to review the information that we have filed with the SEC, including the earnings release and Form 10-Q filed this morning for more information regarding these forward-looking statements and related risks and uncertainties. We'll begin with Matt Gline, who’ll review key business updates across Roivant’s events and provide a financial update. We'll end the call with a Q&A session. And with that, I'll turn it over to Matt.

Thank you, Paul, and good morning, everybody, and thank you for joining our first-quarter earnings call. On today's call will be a little bit shorter than usual because we last got together about 6 weeks ago when we presented our year-end results. So I'll begin on Page 4, and I'll take you through some of the key highlights of the business today, and then we'll make some time for Q&A. So as a reminder, we're just -- we're excited about where we are at the end of our first quarter this year with obviously a number of important attributes, including the ongoing commercial launch of the VTAMA, which we'll spend a little bit of time on this morning.

That is backed by a broad clinical-stage pipeline, including multiple pivotal and registrational studies currently ongoing. Our tip to clinic discovery program, including our proprietary QUAISAR platform that we are using to bolster that pipeline at the discovery stage, a number of sources of asymmetric potential upside, including our Genevant IP portfolio, and all of that supported by what continues to be a strong capital position with $2 billion in cash and cash equivalents and restricted cash, which enables us to finance and develop all of our programs across our pipeline.

So I'll start on Page 5 with a brief update on the VTAMA launch. And I'll say, first of all, I'm incredibly pleased with the very early information here. Obviously, as we've said on a number of occasions, we are principally tracking prescriptions at this time, and we feel script volume has been robust in the early days of the launch. Obviously, it is still the early days. We're only a couple of months in, but we feel the script volume and the early feedback from providers has been very, very strong.

There are a few key updates in recent weeks around this launch. The first is that our LTE data, our long-term extension study data has been published in JAAD and that highlights the 130-day remittive effect off therapy for patients achieving a PGA of 0 on VTAMA. That's something that we've talked about a fair amount before and it’s something we think is an important differentiating attribute of the drug.

We also have noted that our Japanese partner reported positive Phase 3 data for tapinarof in atopic dermatitis, including statistically significant results in IGA and EASI with plans to file that for approval in Japan. And finally, our own Phase 3 study in atopic dermatitis is expected in the first half of next year, which would extend our market to potentially 15 million annual topical prescriptions. And then this is -- from the data, we're excited to note that we've become the #1 most prescribed branded topical for psoriasis as of 8 weeks into our launch.

So on Page 6, I'll note, again, from a script volume perspective, we are excited about how we are performing relative to other topical launches that we've seen in psoriasis. You can see a number of those launches in the solid lines here, and we feel proud of our early performance. I think it's reflective of the enthusiasm around VTAMA. We also feel excited about the fact that we are approximately keeping pace with OPZELURA, that's the dash-line on the slide, which is obviously in atopic dermatitis, a market about 4x as large from a prescription perspective as psoriasis.

So again, early days, but an exciting indicator for us. And just as a reminder, we really are principally focused on prescription volume at this time. The quarter here is only for the 1 month or about a month of launch data for VTAMA so the revenues are not significant. But we're focused on prescription data as we work through our coverage and contracting. And as we said, we'll be about 12 to 18 months before we expect those contracts to be in place.

On Page 7, I just want to remind people of a few key attributes around VTAMA and attributes that we think will support our blockbuster potential both in psoriasis and potentially ultimately in atopic dermatitis. We have the efficacy and durability that we need. And maybe most importantly, we have this often benefit that we've talked about a fair amount. We have a broad target population with a label that permits use across the entire psoriasis disease spectrum from mild to moderate to severe.

We have no warnings or precautions at all nor do we have any restrictions or notes about concomitant medications on our label. We're labeled for use on all areas of the body and notably, that includes intertriginous areas. And something we've talked a little bit less about that I'll remind everyone on this call, we have statistically significant improvement in itch as early as week 2 in our study data.

So on Slide 8, I put that itch data in the presentation so that we can just look at it, remind us of the data. You can see the data across the 2 studies here. And one thing I'd like to call your attention to is that we saw statistically significant separation from vehicle on impact on itch as early as week 2 in our studies. You can see those values on the slide. And notably, this comports with some of the early feedback we're getting from prescribers and patients which is to say that, overall, I would say one of the early attributes that we're hearing is that the drug is working faster than people expected. And we're obviously pleased to hear that from the field so I'll close on VTAMA.

On Slide 9, just to update our differentiation profile versus the field for psoriasis. Obviously, one of the main updates here is that ZORYVE was approved recently. And so we've updated this chart accordingly. And you can see we feel we have a truly differentiated profile. We are among the only topicals to have an on-label remitted benefit. We continue to be pleased with the fact that we have no duration limitations, no body surface limitations, including no limitation against intertriginous regions. We have no safety warnings or precautions section on our label. And then we have no label drug interactions and no contraindications as well, which is something that's differentiated versus some of our competitors. So with that, I'll move on from VTAMA. I'm sure we'll touch on it in the Q&A section as well.

And I'll talk a little bit if you jump forward to Slide 11, about where we are from a clinical perspective with all the programs backing that up. We're showing here a subset of our pipeline. We're focusing on some of the most important and latest stage programs, notably including our VTAMA study in atopic dermatitis that I mentioned before. We also have now begun our Phase 3 program in reposit move in dermatomyositis, and we have our ongoing program and representing lupus that I'll talk about in a moment that's going to enroll its last patient any day now. And then batoclimab, there have been a number of updates that we put out recently, including the fact that multiple of their pivotal trials are initiated in indications that we think could be blockbuster indications for batoclimab. So we're looking forward to just sharing more about that generally as those programs progress.

You can see on Slide 12, some of the features of our current clinical positioning, including the fact that by the end of this year, we will have 7 trials, including 4 pivotal trials ongoing with multiple -- with progress across multiple fronts. I won't talk about each of the individual studies here. And we expect that 3 additional or more additional initiations of programs in 2022, notably including that we've already initiated, as I mentioned, the programs in batoclimab in myasthenia gravis, we expect to be initiating a [thyroid] study imminently. The last thing I want to do on this call before I turn it over to Q&A, is we went through the most recent addition to our pipeline, brepocitinib priovant last quarter at the year-end call earlier this summer. But I just want to reiterate some of the features of that program because it's a program that we're very excited about in our late-stage portfolio.

And because, as I mentioned before, we are expecting the final patients to enroll in our lupus study any day now, and we think that will be an important catalyst for us next year. And so we wanted to continue to draw attention to that program. So brepocitinib overall, as a reminder, is a unique dual-targeted first-in-class TYK2 and JAK1 inhibitor, which we're developing for a variety of specialty autoimmune diseases. We think that dual inhibition of TYK2 and JAK1 is scientifically important because we think it will potentially provide greater efficacy than agents that inhibit either one alone in inflammatory autoimmune disease where both pathways are relevant and where the interaction between the pathways is relevant. We have extremely robust.

As a reminder, this program, we in licensing from Pfizer and announced in the last call, we have extremely robust clinical data, statistically significant, clinically meaningful benefits in 5 placebo-controlled studies demonstrated to date in our oral formulation, including exposure of over 1,000 subjects with a safety profile consistent with approved JAK inhibitors. We have -- we think a distinctive strategy to develop the program, including development in a series of uncrowded orphan and specialty autoimmune diseases, where there's high morbidity and mortality, where there's high unmet need, and where we think the science of our drug, the dual inhibition in JAK1 will contribute directly to efficacy.

We have 2 ongoing registrational programs, including a single registrational Phase 3 study in dermatomyositis that we've already initiated as well as a large global Phase 2b study in lupus that's expected to complete enrollment this month with data expected in the second half of next year, and that's designed to serve as 1 of 2 registrational studies in that indication. And then finally, we have strong intellectual property protection.

So on Slide 14, I don't think I need to remind people in great detail, but SLE is an important disease with obviously many, many patients up to 300,000 people in the United States affected by it. And there's significant unmet need and obviously a disruptive and difficult clinical presentation. There are not very many approved therapies that work well, and those therapies are commercially successful and provide important benefit to patients with significant [move] and beyond. So on Page 15, a reminder of a little bit of the rationale that we have for why we think this drug will be exciting in SLE.

And that's, first of all, there is data from a number of JAK1 or TYK2 inhibitors in SLE. And in both cases, we see signs of efficacy, but with significant room of improvement. So you could see on this slide, the placebo-adjusted response at week 24 on the left-hand side from a Phase 2 study of baricitinib in SLE. And you can see a nice response there as well as the Phase 2 study on the right of deucravacitinib, a TYK2 inhibitor in SLE. And again, you can see a nice response there. But there's obviously significant room across both of these for improved overall efficacy. And again, we think that we have the opportunity with brepocitinib to improve on both of them.

One of the rationales for that, one of the reasons we think we may be able to do well on Page 16, is there are a number of existing indications where we have data in both brepocitinib and either deucravacitinib, baricitinib, or both. And you can see that data shown here. We are not currently prosecuting any of these indications of brepocitinib, but they give you a sense of just how significant our efficacy has been across multiple studies with the drug, and that makes us excited for what we expect we might be able to see in this SLE study.

So you can see on Slide 17, the design of that study, as I said, we're expecting our last patient to enroll any day now, and it's a 52-week study with a couple of different dose arms. And so you can see all of that on Page 17. So with that, I'll wrap up on some of the specific updates. I'll note on the next slide, Slide 18, just we are having and we've announced our annual Roivant Investor Day. We'll be on Wednesday, September 28 at 11 a.m.

So more details to come about that, and we're excited to you hear from many of you then, and we're excited to share a number of key updates around the business, including R&D updates and others at that event. So I'll close and obviously, the market continues to gyrate but with some little green shoots, just to say, we are extremely privileged from a capital position perspective, if you jump forward to Page 20. I'll just point out some of the key financial items for the quarter. So we have R&D expense of $136 million or adjusted R&D non-GAAP of $123 million. SG&A of $149 million or adjusted non-GAAP of $88 million for a total adjusted net loss of $354 million or an adjusted net loss of $211 million.

Our cash and cash equivalents and restricted cash stayed at about $2 billion for the quarter, which we think is important for being able to support our activities. We have balance sheet debt of approximately $417 million, of which only $33 million is a standard credit facility with a carrying value of $33 million. And then the remainder, our milestone or fair value of royalty obligations related to VTAMA. And then we have 703, 625,000 common shares issued and outstanding as of [today].

So finally, on Slide 21, I'll just remind everybody, this is an incredibly catalyst-rich period for our business with obviously regular ongoing updates on VTAMA as well as new mid- and late-stage in-licensing that's ongoing currently. And then I'm excited to provide updates on, we'll continue to provide updates on our LNP patent litigation at Genevant as we have them and continue to provide updates on QUAISAR, on our degrader discovery efforts as we have them as well. In addition to that, we'll be initiating multiple pivotal programs.

I've mentioned some of these on this call. We'll get top-line data from a number of pivotal programs within the next 12 to, call it, 15, 18 months between VTAMA and brepocitinib. We expect potential data from RVT2001 in our Phase 1, 2 trial lower-risk myelodysplastic syndrome next year. and we continue to work towards data on other programs as well. So it's an exciting period of execution for us. Looking forward to connecting with everybody on our Investor Day and looking forward to continuing to track many of these things, including the VTAMA launch in the weeks and months to come. So with that, I'll conclude my remarks for today, and I'll open the line for Q&A and hand it back to the operator.

(Operator Instructions) Our first question comes from David Risinger with SVB Securities.

Great. So I have a few questions. First, could you talk about the expected ramp of VTAMA going forward, particularly in the face of competitive dynamics? Second, could you discuss how you're thinking about gross to net over the next couple of years, particularly relative to street expectations and what you're seeing from the sell side? And then third, could you comment on the cash burn in the quarter and remind us about your cash runway?

Thanks, David. Thank you for all those questions are all -- good questions, and I'm happy to take them. So I appreciate it. I'll start with the VTAMA question, which is it's early in the launch to make long-term projections on a ramp. We are pleased with the early prescription data, and we think it sets us up well, and we're pleased with the engagement we had with patients and physicians and with some of the early feedback we're getting on the drugs. All of that reads well. You asked about competitive dynamics. The first thing I'll say, which I think is an important point that we're just going to reiterate over and over again is we don't view this as a competitive market versus other novel agents.

First and foremost, we view it as a competitive market versus corticosteroids, where there are literally millions of people on corticosteroids for psoriasis or literally millions of prescriptions for corticosteroids in psoriasis. And we think we have better efficacy and better tolerability that should allow us to take significant share from that whole category of agents, which is currently the standard of care mainline therapy. So that's the first thing I'd say.

As far as the competitive landscape is concerned, yes, I think there's a -- we obviously have a new topical competitor now on the market absorbing. It's a drug that has some nice attributes. We think we are differentiated meaningfully between our remitted benefit and our overall more simple safety picture without counterindications or restrictions on concomitant meds. That we also think more voice share and novel topical for psoriasis is helpful.

We think there will be a little bit of a rising tide effect overall. So I would say, given the population that we're going after, I'm excited about our ramp, and I'm not too concerned from a competitive perspective. And I think as you see some new impressive systemic agents coming, I think it will be even more important to folks like payers to have a real off-ramp, to have a real opportunity for people to stay on topical therapy versus moving to some of these, what I expect very expensive systemic agents or new biologics. So I think that will also provide a good opportunity for us in the marketplace.

Second, on gross to net dynamics and sell-side expectations, I guess it's a great question. It's an important topic. Just to be very clear about it, our expectation is that our gross to net will be -- or gross net yields will be low for the next while here. We've said 12 to 18 months to commercial contracts. I think as far as street numbers or consensus, I won't comment specifically, but I'll just say it's important for us to say over and over again. We think the gross net yields are going to be low during the period when we're getting contracts in place, and we think they'll normalize only after we have those commercial contracts in place and payers are converted from uncovered. And that's a function that we've talked about this before. It's a function of things like the new-to-market blocks that make it difficult until those contracts are in place.

We are learning every day from the marketplace, including looking at formulary positioning for a couple of people that have gone before us and watching what that looks like. And we're just excited to see where those discussions shape out, and we'll provide an update on contracts when we have it. And then the last question on burn and runway. I think we've said this before, but it's an important point. We always look to run the business with about 2 years of runway or I should say, visibility into about 2 years of runway. We have a pretty broad portfolio. So it's very easy for us to optimize to extend our runway, to manage our runway.

And so also, we continue to run the business with that in mind. We have lots of options to extend runway, including partnerships, delaying or terminating lower priority programs, et cetera, as well as monetizing states across the net portfolio, things like Data Vance that is an independent holding that desk, we're constantly looking for opportunities around. So we are excited about that. I'd say you may see some swings in our working capital over the last couple of quarters or next quarter just as the [Jupiter] royalty financing works its way through. but I don't think that's going to have any meaningful effect on long-term burn. So thanks, Dave. I think that covers the 3 questions there.

Our next question comes from Dennis Ding with Jefferies.

Two for me. First one, can you please give some more granularity on the launch in terms of who and where it's being prescribed, are you seeing out to moderate? I mean you talk about how penetrated are those accounts that you guys are currently in? And then secondly, perhaps on proteovant, you guys mentioned that you had an AR degrader in the… Reminder us what that is and when can we expect the next.

Yes. Thank you, Dennis. That's both good questions. So I'll start on the VTAMA question. We've seen -- I think we mentioned in the slides that 3,000 people write VTAMA prescriptions. We've been focused early on, on the highest prescribing docs, the docs who write a significant percentage of topical prescriptions and who are the general thought leaders on novel topical agents. We've seen multiple -- many docs have written multiple prescriptions.

And obviously, there's some concentration there. And then there's a whole population of doctors even in that high prescribing population that we're still getting out to still getting our best out to. So I think there's a lot of room to run there. We have not focused on a specific disease severity bands within those docs. And so we don't have a specific strategy as far as use severity or subsetting the patient population.

I would say we get reports in the field from a variety of different patient populations, including mild patients who didn't like being on steroids, but also including reports from severe psoriasis patients who, for example, were on the cusp of using a systemic agent and have been pleased with their VTAMA experience in ways that may work all that for them. So it's been a pretty broad patient population and a lot of interest in the drug from across the spectrum. Again, we're pleased with both the number of prescriptions and the number of unique prescribers.

And then your second question was around the engine receptor degrader. I think we're still looking at that program, both our data that we're getting the final list of and our competitor data. And to be honest, it's the kind of program that we're watching closely in the context of the recent drug pricing legislation. So I would say the bar for that is high, and we're still evaluating our actions there, and we'll provide an update when we've got one. But I appreciate the question. Thank you, Dennis.

Our next question comes from Neena Bitritto-Garg with Citi.

I was just wondering if you could talk a little bit more. I know, Matt, you just mentioned that you are seeing some docs write multiple prescriptions. Maybe if you could talk a little bit more about just the general prescriber behavior you're seeing? Are you seeing docs generally prescribed to maybe 1 to 2 patients first, see how things go with those patients and then opening up to their broader population of patients? And then also any initial feedback or anything you're hearing on [dermatitis]. That would be great.

Yes. Thanks, Neena. So those are both -- it's a great question overall, and both parts of it are good. I don't -- we don't have specific data to share right now on whether that are dribbling out or not. I would say anecdotally, we have a pretty wide variety of prescriber behaviors from true believers which are shooting out of the gate and in so to actually have become more and more enthusiastic about the drug as they've had positive patient experience.

I think I mentioned we continue to get lots of positive reports from doctin patients in the field. I would say one actual group that's coming back that we saw in our data, but I think it's been exciting to hear in the real world has been the onset of efficacy. I think patients are pleased with how fast they're seeing results.

And then another set of reports that we're seeing, which I mentioned are from patients who were on their last gas as far as capitals were concerned and we're evaluating progression to systemic agents. And I think it's been the real breadth of fresh air for that patient population. So we've heard positive reports from doctin patients about that from both. On [dermatitis], I'll just say, I think it's as we predicted. We have not heard any significant rumblings about it, it's not something that we think is meaningfully affecting the way back to use the drug or meaningfully affecting the patient experience, given that it's transient and on target for the drug. So nothing new or significant around dermatitis that we think is affecting commercial behavior.

Our next question comes from Louise Chen with Cantor.

So I have a few for you. First one I wanted to ask about was brepocitinib and the SLE market landscape and how you think about that for your product. And also why you chose this one and dermatomyositis as the first 2 indications? And then secondly, on the Japan [tapinarof] congratulations on that news. If you could be more specific on the feedback or the read-through to your AD studies, that will be very helpful. And then last one, I just wanted to ask you was broadly what is the physician feedback on VTAMA and how they view it as an addition to the market here with one of the first topicals being approved – novel topicals in a long time.

Great. Thank you, Louise. All really good questions, and I appreciate them all so thanks for listening. On the first on brepo and SLE, SLE, as you know from covering the field is littered with lots of people have tried lots of things. The competitive landscape is really there's 2 approved biologics with lots of unresponsive patients and many others who experienced a partial response.

So it's a disease that has been historically stymied by a combination of agents that haven't worked as well as they could have been just poor development execution. So we see a huge opportunity for a novel agents. And we talked about this a little bit on our annual call and maybe some of the slides there are useful to refer to as you're looking back on it. But I think there's good scientific rationale for the combination of TYK2 and JAK1 being important in lupus. And we've seen the recent data from deucravacitinib on the type 2 side.

We've seen baricitinib on the [decon] side, we put that data in this deck. So we think we have a real opportunity there. And as we mentioned last time, this is a study that we're running together with Pfizer, and it's going to a capital-efficient program for us with a readout next year. So we see it as an opportunity. As far as why we've chosen these indications, I'd say one of these are both diseases with a high morbidity and mortality with no approved oral therapies at all.

As I said, in the case of most the approved therapies or biologics and – so no approved oral therapies have been an mortality. And then maybe most importantly, from a scientific perspective, we're looking at diseases where we think the biology of both TYK2 and JAK1 are relevant and potentially where we're going to see some synergistic effect between TYK2 and JAK1 that will make us better than even a combination of independent JAK1 or TYK2 agents might seem to be based on their data. So I'd say those are our main indications like lupus and dermatomyositis reflect that. So that's on BPO. Thanks for that question.

On AD, thank you for taking note of it. It's obviously, we're excited to see it. It's always good to see a pre-out in one of your programs, especially in an indication where you're currently running a study. And I'll note that, that study is significantly smaller than our Phase 3 study. So to see statistically significant results in the 2 key endpoints there in a smaller study and to know that they're carrying the program forward through registration is obviously all great and feels like a good readthrough for us.

Ultimately, they're going to publish the data, but we're looking forward to our own data and we think our data is going to read out before they make that publicly available. So yes, I think it's a good positive for you on our efficacy in AD. And then finally, physician feedback. So we've gotten a couple of different versions of this question this morning, and I'm always happy to take it because I've been incredibly pleased with the quality of the physician feedback. Look, I think docs were hungry for an effective novel topical agent. I think patients were hungry for an effective novel topical agent. I think some of what we are seeing in the physician feedback is just generally that outcome.

The doctor excited has something you to prescribe and patients are excited to have something new and non-steroidal to go on. I think some of the feedback we're getting is frankly just specific to our agents in terms of the feedback on the onset of efficacy and being fast in terms of the feedback on -- it's obviously early for us to be seeing the “remitted benefit”, but early facts consistent with that idea.

And so I think it's been a really positive experience for docs patients so far from what we can tell and makes us excited for what's to come. Obviously, there's a lot of work to do to build that into the size of market opportunity that we think it deserves to be. And we think it's going to be a really topical and [interaction] going to be a really big opportunity, and we think VTAMA’s going to be a really important drug sort of best-in-class drug in that category. So early feedback and positive we're excited to generate more of it.

The next question comes from Douglas Tsao with H.C. Wainwright.

Matt, maybe just as a quick follow-up to Louise's question on the Batama readout in Japan, just to confirm, the -- those 2 studies have the same -- or that study had the same primary endpoint as the study that you were -- that you're currently running in atopic dermatitis, correct?

Yes. primary and key secondary were IGA and the EASI, which are also important endpoints for us. Exactly, that's correct.

Yes, I just wanted to confirm because that obviously highlights that the read-through your… should be very strong -- and then also just when you think about the progress, I'm just curious in terms of the early feedback that you've been getting from payers in terms of getting contracts into place and how they're thinking about prior authorizations and where they see this being put into the treatment paradigm? Because obviously, to your point, it could represent an attractive opportunity an off-ramp for more expensive biologics.

Yes. Thanks, Doug. I appreciate that question. It's a good one. Obviously, those are all active discussions. It's hard to comment on specifics of where they are. But I think the point you highlighted is obviously an important point to everybody and it hasn't been lost on anybody that it's important to have an off-ramp before biologics. And I think we've said before, our view on the treatment landscape is that we should be mainstay therapy, which is important -- so not just a pre-biologic option.

But really, as the baseline of care, and that's just where we think the drug deserves to be positioned. But we think, obviously, the factors around biologics will help us in getting the positioning we want. The second thing I'd just remind people of is remember that the main thing that insurance companies care about, that payers care about in determining coverage is demand that obviously, the scientific astute to the product or something they look at carefully and they have expert panels. But the way that sort of gets realized is that is around commercial demand.

And so the early script volume that we're seeing here is incredibly important, we think, in ensuring that we have the credible broad coverage that we want. And then we talked a fair amount on the approval call about our pricing strategy and about making sure that we had both a price point that will be attractive to list price-sensitive payers, but also importantly, a price that offered us the opportunity to offer significant rebates to those PBMs that are rebate sensitive. So I think all of those dynamics are important. And we think they're going to matter and you're actually right, the biologics are really big pain points for payers right now. So they're all going to be very focused on defraying that spend over time.

And then just one quick follow-up. I mean how do you envision obviously getting contracts in place for psoriasis? How long do you think it will be take when you look to add the atopic dermatitis indication, do you think that should be -- come in place fairly quickly soon after that approval?

Yes. I think once the AD indication is approved, we should see adoption in AD relatively quickly in terms of the specifics around payer contracting and payer dynamics. I think once we have the psoriasis payer contracts in place and once we have the AD data, we'll be able to comment more specifically on that timeline. But I think it's fair to say that we expect uptake in AD to be relatively quick on approval.

Our next question comes from Corinne Jenkins with Goldman Sachs.

Two for me. First, on the folliculitis, you mentioned that you're not seeing much of an impact, but is that something you're having to educate physicians on? Or is that something people seem to understand from the get-go? And then with respect to just the script to fill rate, what are you seeing there? And how do you think the $75 patient co-pay or responsibility is impacting the fill rate?

Yes. So those are both good and important questions. On folliculitis, look, dermatologists are very familiar with folliculitis just as a condition, and that's all in with all its pretty familiar peculiar conditions. So there's not a lot of education to need to explain what it is. I think it's important that they have to head up about it. To be honest, we're just not hearing a lot about it in the field, which I think is exactly what we want. It's something that I think the docs are comfortable with, but also the patient experience of it is mild, it's transient. I suspect that we will be hearing more about it if many patients were asking their doctors about it after experiencing it.

So I think in general, it's just not having much read-through on patients or prescriber behavior is how I understand the current situation to be based on the feedback that we do have. And then -- so we're not sharing specific fill rates, but I think we're extremely pleased with the overall rate of filled prescriptions. And I think that reflects the actual to the product. It reflects the sales and marketing strategy, and it obviously reflects the impact of the co-pay card program in all of its features in terms of getting patients on drug. And we talked a little bit about how the way that our co-pay card disruption is also designed to help us in the coverage process. And so we're continuing to follow that as well.

Our next question comes from Yaron Werber with Cowen.

This is Brendan on for Yaron. First off, Tom, I just wanted to ask about the Japanese AD study. I guess looking at the baseline demographics there and maybe the enrollment criteria, would you say that's fairly reflective of the U.S. study? And maybe what we can expect there? And then on brepocitinib, building off one of the earlier questions. Can you maybe just tell us where you see the bar is for you on the Phase 2 study for next given some of the competition? I know -- and you also mentioned that your drug, you think would be potentially better than even dual administration and are inhibitors. Could you maybe elaborate a bit on why that would be the case?

Perfect. So on VTAMA, the answer is the study criteria are similar. Patient 5 are different only in the sense that the study in Japan was obviously exclusively Japanese patients. I think the read-through is positive. And then just a reminder, that study is significantly smaller. I think overall, that study is smaller than either of our individual Phase 3 studies in AD. So I think that's -- that's an important part of that read-through there.

And then I think your second question was on repo and what do we think is the bar. We've talked a little bit about what the unmet need looks like there. I think [candidly] with the bar has to be pretty high. We want to see superior SRI-4 to the approved therapies and then good data on secondary endpoints. So I think the bar for efficacy is reasonably high for the program. It would be one of the only oral agents actually there's no currently poor agents. We think we have a pretty good opportunity there.

Our next question comes from Nishant Gandhi with Truist Securities.

This is Nishant Gandhi, Truist Securities. Going back to the conversations with payers on formulary position, have the discussions been challenged at all with the launch of [ore] and a pricing point that the competitor has chosen as that modified the ongoing negotiations at all with the payers that you're seeing? And then also, can you remind us, are you monitoring for how many tubes per month that patients use for VTAMA in the real-world practice? And if you do, are you going to present this data to investors? And what time in the future might that be?

Yes. Those are both good questions about the VTAMA launch. On the [ACTIS] price point, I use a couple of comments. One is we're not going to comment on active discussions with payers and ARQ was just approved a couple of weeks ago. So I don't think there's a real-time update on the impact anyway. I think we talked a fair amount in our approval meeting about why we were pricing where we were pricing. And our cuts has been guiding to their pricing strategy for some time. I think for us, it was about threading the needle between a low enough list price to appeal to those claims that were really focused on list price but also a high enough list price to be able to offer the rebates to the PBMs or so much of the commercial volume wise. And I think we feel good about our pricing strategy, considering everything that went into it. So I can't comment spectate directly, but I feel good about ours.

But I also think we just have a differentiated product from ZORYVE, and I think the attributes of our product needs to be considered, we have a remitted benefit that we've talked to paramount about. Their label has some features that we don't, including they have [Grodig] interactions listed with [CYP] 3 and 4 metabolized drugs. That's not a small thing. That's like atorvastatin and simvastatin and most contraceptives are included in their drug interaction profile. So I think that's something that will potentially matter in practice. And so I think there's various differentiated features that will also impact payer conversations that will also impact where we are. And I think the other thing is I'd say refills in general – maybe I'll say on the question about 2 per month. We don't currently provide guidance on that. It's super early, obviously, with many of our patients have just received their first subscription.

That's I think refills are good indicators of happy patients and we're seeing already refill – some number of refills just a couple of months in, which I think is great in at least some patients are going to use multiple tubes going to be happy on the drug. So I think you should actually be able to track to some degree, tube utilization from watching the NRX,CRX rate. I think we're happy with that. We continue to see good engagement in the [Minto] program as well. So I think overall, it's too early to come to any long-term conclusions on the refill rate or the number of tubs, but I think the early data is promising to us.

At this time, I am showing no other questions in the queue. I would now like to turn the conference back to Matt Gline for closing remarks.

Well, great. Thank you, operator. Thank you for everyone for your questions. Thank you, everyone, for listening this morning. As I said, it was a short call cut our lesion was just 6 weeks ago. We're looking forward to getting back together in September for our Investor Day. And we're continuing to provide updates on VTAMA and on many other exciting things within our business over the months to come. So thank you, everybody, and we'll talk again soon.

This concludes today's conference call. Thank you for participating. You disconnect.