Theravance Biopharma Inc (TBPH) 2018 Q1 法說會逐字稿

Ladies and gentlemen, good afternoon.

At this time, I'd like to welcome everyone to the Theravance Biopharma Earnings Conference Call.

(Operator Instructions) Today's conference call is being recorded.

And now I would like to turn the call over to Alex Dobbin, Head of Investor Relations.

Please go ahead.

Good afternoon, everyone.

Thank you for joining our conference call and webcast to discuss our first quarter 2018 financial results.

With me on the call today are Rick Winningham, Chief Executive Officer; Reneé Galá, Chief Financial Officer; and Brett Haumann, Chief Medical Officer.

Following our prepared remarks, we'll open the call for questions.

A copy of the press release and slides accompanying this call can be downloaded from our website or you can call Investor Relations at (650) 808-4045, and we'll be happy to assist you.

Prior to our update, we'd like to direct your attention to Slide 2 of the deck, and to remind you that this conference call will contain forward-looking statements, which involve certain risks and uncertainties, including statements about our product pipeline; expected benefits of our products; the anticipated timing of trial results and regulatory filings; and expected financial results.

Information concerning factors that could cause results to differ materially from our forward-looking statements are described further in the company's filings made with the Securities and Exchange Commission.

And now I'd call your attention to Slide 3, and hand the call over to Rick Winningham.

Thanks, Alex.

Good afternoon, everyone, and thank you for joining us.

2018 is an important year for Theravance Biopharma as we focus on advancing our highest priority programs, where we believe we have an opportunity to create transformational medicines for patients.

We're pleased with our achievements to date towards this objective, led by our global collaboration with Janssen for the development and commercialization of TD-1473, our intestinally restricted JAK inhibitor for inflammatory intestinal diseases, and we are now preparing for the advancement of 1473 into larger studies.

Our strategic partnership with Janssen represents a key milestone in the evolution of our company and supports our research approach focused on discovering localized medicines for localized disease.

We view our research strategy and engine as important drivers of long-term value for the company, and we're working to progress new programs from research into the clinic.

In the first quarter, the NDA for revefenacin, our nebulized LAMA for the treatment of COPD, was accepted by the FDA with an assigned PDUFA date in November of this year.

Our work in discovering and developing revefenacin provided us with a base of knowledge in the lung and localized medicines, which our research teams continue to leverage today.

GSK's Trelegy Ellipta, in which we hold an economic interest, is off to a great start since its approval late last year, with steady progress in building payer coverage, strong uptake in scripts and a recently announced expanded indication.

We believe Trelegy has the potential to deliver significant value to Theravance Biopharma over time, and we look forward to seeing GSK's continued progress with this important medicine for patients suffering from COPD.

Turning back to our internal pipeline, I'll now provide an update on velusetrag, directing your attention to Slide 4. We and our partner Alfasigma, have been in dialogue with U.S. and EU regulators on the Phase III requirements for the velusetrag drug program, following the completion of our Phase IIb gastroparesis study.

As a reminder, Alfa paid for a majority of the cost related to the Phase II program.

Our discussions with regulatory agencies are now complete, and both we and Alfasigma, very recently made decisions regarding next steps in the velusetrag program within the framework of our existing collaboration.

First, Alfasigma has exercised its option to develop and commercialize velusetrag for gastroparesis, with an initial focus on the EU market.

Their decision to opt-in results in a $10 million payment to Theravance Biopharma and the right for us to receive future development regulatory sales and sales milestones as well as royalties.

Second, we have elected not to pursue further development of velusetrag.

Our decision is based on our planned pipeline investments and in light of the current FDA requirement that a chronically administered gastroparesis product in this class complete a large Phase III safety study.

As a result of our decision to not progress velusetrag in the U.S., we're transferring global rights for velusetrag to Alfasigma under the terms of the existing collaboration.

This decision was not taken lightly and it was strongly influenced by the breadth of competing opportunities in our pipeline, alignment and allocation of resources to optimize those programs, and how each fits into our overarching objective of bridge -- of bringing transformational medicines to patients.

As we turn to the remainder of 2018 on Slide 5, we are enhancing our focus on the most important strategic priorities for the company, which are those programs where we think there's greatest opportunity to create transformational medicines.

For revefenacin, our commercial readiness activities are underway, in anticipation of an approval in the U.S. for COPD later this year.

And we recently completed our mid-cycle review with the FDA related to our NDA on file.

With TD-1473, for ulcerative colitis and Crohn's disease, and TD-9855 for neurogenic orthostatic hypertension, we're advancing 2 highly differentiated assets through mid-stage development.

In research, we're preparing to progress a novel inhaled JAK inhibitor for serious respiratory disease into the clinic.

These assets, combined with our strong balance sheet and emerging cash flows from our economic interest in Trelegy, position us to advance all segments of our business from research to commercial with the goal of creating transformational medicines.

Now I'd like to ask Brett to provide updates on our development programs.

Thanks, Rick.

I'll begin on Slide 6, with our JAK inhibitor program.

TD-1473 is a novel, potent, orally-administered and intestinally restricted pan-JAK inhibitor, with a potential to treat a range of inflammatory intestinal diseases, including ulcerative colitis and Crohn's disease.

1473 is designed to remain localized and only act within the gut wall.

Thereby, maximizing local anti-inflammatory efficacy and minimizing the systemic exposure that would otherwise lead to immunosuppression, as has been observed with other JAK inhibitors in development.

In February, we announced the global collaboration agreement with Janssen for the joint development and commercialization of 1473 and related backup compounds.

Partnering with the global leader in immunology, we believe, benefits 1473 in a number of ways.

First, by leveraging the expertise of Jenson right away, we believe we can optimize the clinical strategy and execution of 1473, which is of particular importance in the competitive field of inflammatory bowel disease.

Second, this collaboration allows us to accelerate and expand the scope of the development program, and we're planning to pursue multiple indications in parallel starting later this year.

And finally, our goal is to maximize the worldwide commercial opportunity for 1473 for Theravance Biopharma and our shareholders.

And we think having Janssen as our partner, in advance of our registration programs, will enhance our overall probability of success.

Ultimately, this partnership is designed to support 1473 to its fullest potential as a transformational mix for patients with inflammatory intestinal diseases, and we're extremely pleased with the immediate gains we've realized since bringing Janssen into the fold.

In partnership with Janssen, we are finalizing the plans for our upcoming Phase II study in Crohn's disease and the Phase IIb/III study in ulcerative colitis.

Both studies are scheduled to begin enrollments before the end of this year.

With respect to Crohn's disease, there's a strong rationale for the potential of utility of 1473 in this indication.

Based on what we know about precedent therapies, the location of inflammation within the body associated with this condition, and 1473's design and demonstrated behavior in the body.

Modulating IL-12 and IL-23 cytokines through Tik2 is associated within effect on Crohn's.

This is evidenced by STELARA and other IL-12, IL-23 systemically mediated drugs in development.

1473 is a pan-JAK inhibitor, which has demonstrated high affinity for Tik2.

Also, 1473 is absorbed slowly by tissue throughout the intestinal tract, including those parts of the small intestine affected by Crohn's disease.

As an immediate benefit of our collaboration, Janssen has applied its deep-seated expertise in Crohn's disease to help inform the Phase II clinical study design for 1473.

The study is designed using a 12-week induction phase to assist the safety and efficacy of multiple doses of 1473, evaluating disease activity indices and endoscopic improvements.

With regard to ulcerative colitis, we intend to start a Phase IIb/III adaptive design, induction and maintenance study this year.

Our discussions with the FDA and the EMA regarding the design of the study are ongoing, and we'll be in a position to provide more detail in the coming months.

I'll now turn to Slide 7 and TD-9855, our norepinephrine serotonin reuptake inhibitor, which we're advancing in the orphan condition of symptomatic neurogenic orthostatic hypertension, or nOH.

nOH is an autonomic disorder, which presents in a proportion of patients with Parkinson's disease as well as the majority of patients with multiple systems atrophy and pure autonomic failure.

We are currently running a multipart exploratory Phase IIa study in approximately 30 patients with nOH.

In the first part of the study, the single ascending dose portion, we've observed encouraging responses in blood pressure and standing time.

Responders in the single-ascending dose portion are eligible for an open-label, repeat-dose phase of up to 5 months of treatment, in which we're assessing sustained effects on blood pressure and symptom improvement to understand the durability of response with 9855 with the primary assessment after 4 weeks of treatment.

Enrollment into Part A is complete, and the final subjects for Part C are currently being scheduled, which is pushing the expected timing of our 4-week results to the end of July.

Based on our discussions with key opinion leaders and regulatory authorities, it's evident to us that despite blood pressure being fundamental to this condition, an ideal treatment in nOH would be one that provides patients with improvements in symptoms as well as functions.

We're collecting measurements in both categories in order to assess the durability of response to 9855, with particular interest in dizziness as a cardinal symptom, as well as standing time.

Bear in mind that patients who are unable to stand for 10 minutes are severely debilitated and spend the majority of their day in a wheelchair or lying down.

We believe these patients will provide data that will be most helpful in informing the clinical evaluation and dose selection for 9855, and they constitute the majority of patients enrolled in our Phase IIa study.

Our intention is to seek an expedited development parts for 9855, and discussions with regulatory agencies around the program have been constructive.

Pending durability data from our ongoing study and continued dialogue with the FDA on the design features of the pivotal Phase III program, we'd like to be in a position to start Phase III late this year or early next year.

Turning to Slide 8, in revefenacin, our once-daily nebulized LAMA for the treatment of COPD.

Our NDA with -- our NDA for revefenacin is currently under review.

As Rick mentioned earlier, we've now completed our mid-cycle review meeting with the FDA.

The agency reiterated it does not plan to convene an advisory committee meeting to review the NDA, and the assigned PDUFA dates remains on track for November 13, 2018.

If approved, revefenacin will be the first once-daily nebulized LAMA for COPD patients.

Our launch rate in these activities, in partnership with Mylan, are ongoing, and we're pleased with the progress of our collaborative efforts.

Now I'll pass the call over to Reneé for a financial update.

Thank you, Brett.

Starting on Slide 9. Revenue for the first quarter 2018 was $8.3 million comprised of revenue from collaborative arrangements and U.S. net product sales of VIBATIV.

Research and development expenses for the first quarter of 2018 were $47.8 million compared to $40.6 million in the same period in 2017.

The increase is primarily due to higher costs related to employee, share-based compensation and allocated expenses.

First quarter R&D expense includes noncash share-based compensation of $6.6 million.

Selling, general and administrative expenses for the first quarter of 2018 were $24.7 million, as compared to $20.8 million in the same period in 2017.

The increase is primarily due to higher costs in G&A related to employee share-based compensation and external expenses.

First quarter SG&A expense includes noncash share-based compensation of $7.4 million.

We remain in a well-capitalized position, with approximately $435 million in cash, cash equivalents and marketable securities as of March 31.

This amount includes the $100 million upfront payment received earlier in the year from the global collaboration with Janssen, but excludes the $10 million opt-in fee from Alfasigma.

Turning to guidance, our 2018 financial guidance remains unchanged from our communications in February of this year.

For the full year of 2018, we expect our operating loss, excluding noncash share-based compensation, to be in the range of $180 million to $200 million.

As a reminder, our guidance assumes 2018 revenue recognition of less than $25 million of the $100 million upfront nonrefundable payment received from Janssen.

The remaining revenue will be recognized in future periods over the course of conduct of the Phase II programs in Crohn's and ulcerative colitis.

Also, our guidance does not include income related to our economic interest in Trelegy Ellipta, as we recognize this income below the operating line as other income.

I'll close on Slide 10, with an update on our economic interest in Trelegy Ellipta, the first and only once-daily, single-inhaler triple therapy.

The FULFIL and IMPACT studies have demonstrated the benefits for patients of triple therapy over dual, with Trelegy providing significant reductions in COPD exacerbations versus Brio, Anoro and Symbicort.

We're pleased to see these clinical benefits translating to clear market demand for our Closed Triple therapy in COPD, as evidenced by the strong initial uptick.

In its first full quarter since approval, GSK reported net sales of $14.6 million, surpassing all other Ellipta launches and demonstrating a promising trajectory.

In addition, the IMPACT study has come back to the forefront in recent weeks with its publication in the New England Journal of Medicine and the approval of an expanded indication for Trelegy based on data generated in the study.

Trelegy Ellipta is now indicated as a long-term, once-daily maintenance treatment of airflow obstruction in patients with COPD, and is indicated to reduce exacerbations of COPD in patients with a history of exacerbation.

In addition, the boxed warning was removed from its prescribing information, in line with the recent updates to the ICS/LABA class.

With the expanded label approved by the FDA, GSK stated they expect to ramp up promotional activities and expand reach beyond the initial target universe of pulmonologists into the primary care physician base.

We have long believed Closed Triple therapy can have a major impact on how COPD is treated, and we're excited to see GSK expanding their commercial reach to drive the longer-term success for this product.

As a reminder, GSK is also running a Phase III study of Trelegy in asthma patients, which they expect to complete in the early part of 2019.

Theravance Biopharma holds an economic interest in Trelegy that equates to upward tiering royalties of approximately 5.5% to 8.5% of worldwide net sales.

This economic interest represents an important strategic asset to the company, as both an emerging future contributor of growth and an alternative source of funding for our pipeline.

Now I'll turn the call back over to Rick.

Thanks, Reneé.

Moving to Slide 11.

2018 stands as an important year for Theravance Biopharma as we focus on our strategic priorities, drive clinical execution and advance programs from our validated research platform towards clinical development.

Operationally, we're enhancing the focus on the advancement of our highest priority programs, all centered on the core principles of transformational medicine.

Over the course of the remainder of the year, we're focused on optimizing the development of 1473 with Janssen, where we plan to initiate a Phase IIb/III study in ulcerative colitis, and a Phase II study in Crohn's in the second half of 2018.

Advancing 9855 towards a registrational program in patients with symptomatic nOH, following results from our exploratory Phase IIa study expected by the end of July.

In partnership with Mylan, the potential approval and launch of revefenacin, with the designed PDUFA date of November 13 of this year, and finally progressing our inhaled jack inhibitor for serious respiratory disease into the clinic in late 2018 or early 2019.

This is the next program from our research platform aimed at discovering localized medicines, and it leverages our very unique and powerful institutional knowledge regarding both lung tissue and JAK inhibition.

In closing, we're very proud of our entire team at Theravance Biopharma, all of whom continue to drive our business forward.

And we look forward to introducing you to a few of our key team members at our R&D Day in the fall, and sharing with you how the insight and innovation within our research and translational groups is generating compelling opportunities to transform how serious diseases are treated and to create value for shareholders.

Now I'd like to turn the call over to the operator for questions.

(Operator Instructions) We'll have our first question from Geoffrey Porges from Leerink.

This is Brad Canino, on for Jeff.

Now that you've partnered so many of your assets and your wholly-owned mid-state drug is in the cardiovascular area...

I'm sorry, you're breaking up.

We can't hear your question.

I'm sorry, can you hear me now?

Yes, we can.

Okay.

Sorry about that.

I just want to check, now that you've partnered so many of your assets and your wholly-owned mid-stage drug is in the cardiovascular area, we want to hear an update on the NEP inhibitor program for heart failure or if we should just consider that under discontinued program?

Yes.

I might have missed the last one, but I did hear a comment about our own programs being in cardiovascular.

Now just a quick point, before I turn it over to Brett on the NEP inhibitor, I'd say that 9855 program, while it's focused on symptomatic neurogenic orthostatic hypertension, this is really a condition that is focused, I'd say, primarily in neurology -- sort of the intersection of neurology and it's a cardiovascular condition, i.e., the low blood pressure, but the patients are being treated by neurologists with some input for cardiology.

So 9855, I wouldn't necessarily -- I wouldn't categorize it as a cardiovascular program.

I'd categorize it as a neurology program.

For the NEP inhibitor, we continue to look at ways for the NEP inhibitor to be leveraged in smaller indications.

I mean that work is ongoing, but a majority of our focus this year will be on the programs that we outlined in our remarks.

Brett?

Thank you, Rick.

I was going to make very similar points, actually.

I think just back briefly to the 9855, in our epidemiology work, to understand the way in which patients are managed in this condition, they will often present to cardiologist but then are referred across to neurologist, because it may be the first manifestation of one of these rare neurological conditions.

In our clinical development program, we'll be looking to use both specialisms in terms of identifying patients for recruitment into our program.

And then as Rick has rightly said, on the NEP inhibitor program, continuing to explore ways in which the NEP inhibitors can be well utilized, but it has not being a primary focus of our efforts this year, really, as we've been concentrating our efforts on the programs we've touched on today.

Okay.

And then a follow-up, if I may.

Given the clarity you now have on the Closed Triple program, is there any appetite for selling or securitizing any portion of its future revenue streams to finance the company's other development efforts?

And for that matter, can you also discuss the profitability of VIBATIV and the potential monetization of that asset?

Great.

Thanks for the question.

This is Reneé.

I'll take Trelegy, and then Rick and I will tag team on VIBATIV.

So clearly, we view, as I have mentioned in my comments, we view Trelegy as a strategic asset.

And one of the reasons we view it as such is because it is a potential source of funding for the company in the future.

In fact, it's also a potential source of the funding today, if you were to think about the options that we have with this asset.

There are lots of different ways you could think about monetizing the asset.

I don't think, based on where we're sitting here today, it would make as much sense to sell the asset based on our views of the momentum that we see, both in the scripts and in the payer coverage that GSK has been able to secure.

We think there's a lot of upside potential in this program, and we look forward to seeing how the launch continues.

There are ways you could securitize this asset without having to give up upside that you would incur as part of the sale.

And clearly, that's something that we think about in the future.

Yes.

Thanks for the question on VIBATIV.

I think VIBATIV, importantly, we've mentioned before that we cut back the spending on VIBATIV.

But the sales force, particularly, small sales force that we have focused on the hospital, and in fact a key call point in the hospital being pulmonologists, will also be a critical call point during the launch of revefenacin.

As we've talked before, there are about 900,000 patients, approximately, that are admitted every year in the United States because of the sudden worsening of COPD into the hospital.

And approximately, half of them today are discharged from the hospital on nebulized therapy, without the availability of a long-acting muscarinic antagonist.

So we view both the use in the hospital for nebulized LAMA as well as the discharge from a nebulized LAMA, as an important element of launch success for revefenacin, hence, using our acute care infrastructure that we've established to make that happen.

Our next question is from Alan Carr from Needham.

Around velusetrag, so global rights have gone to Alfasigma.

I'm wondering did they only plan to develop it in Europe?

Could you clarify that?

And I think that the Europeans are more flexible in terms of use -- the registration requirements versus the U.S. And then, also, can you clarify where things stand with Part C of the 9855 program?

Have patients been enrolled in that or not?

Thanks very much.

I can take both questions.

First on velusetrag, the -- as you may recall, Alfasigma's been our partner, really, throughout the course of the Phase II program.

And indeed, they paid for the vast majority of the Phase II external costs.

You are correct that in dealing with both the European and the U.S. agencies, we've got a sense of different requirements.

And the Europeans were simply more flexible in their expectations of the program requirements prior to submission.

In the U.S., as Rick mentioned in his script, the agency has an expectation for drugs in this class to generate a large safety database through a pre-registrational study.

And as we've signaled our evaluation was, given the other priorities we're focused on right now, that was that an area that we chose to invest in.

In Europe, Alfasigma has, I think, a clear path with the European regulators at this time.

Our global rights do transfer to them, so they have rights to be able to explore other territories in the future.

I take it they have no plans to do anything in the U.S. either?

I think it's probably appropriate that we don't comment on their behalf.

But I think their priority right now, the immediate focus is on the European regulatory path.

Your other question related to Part C, and that relates to the MARINE study.

I can confirm that patients have been enrolled in Part C and in fact, have been actively progressing through Part C. So some of those patients have now progressed into several months of therapy.

And really, the purpose in us waiting until July is to be able to report to you on all of the patients who have been enrolled into part C and have been able to achieve the 4-week endpoint.

So that's a particularly important threshold for us.

It is possible that patients will continue in the study beyond July because they will have the opportunity to continue for longer than 4 weeks, but our plan for July is to be able to report the 4-week data in all patients who were eligible and have got to that point.

So you reached all -- (inaudible) 30 patients in the single ascent -- or the single dose?

And they -- how many of those have -- or do you plan to move into Part C?

So we're not reporting the total number at the moment because it's an active process.

The last remaining patients are moving from Part A into Part C, so we don't have a final number for you.

Sadly, as a function of the progression of the disease, not all patients actually are strong enough, or sadly even alive, to be able to progress from Part A to Part C. So because of the aggressive nature of the disease, particularly, in patients with MSA, their prognosis is sadly quite limited.

And so not all patients who've gone through Part A have either been eligible or indeed alive to progress into Part C. So it will be a subset that we report in Part C. We just don't have that final number at the moment because the last remaining patients are being scheduled for Part C, as we speak.

Okay.

And then just a clarification on your answer to a previous question around the NEP inhibitors.

You're happy with the profiles of the drugs that you brought through Phase I, it's just a matter of finding the right indication for Phase II and beyond.

Is that a fair assessment?

I think that's a fair assessment.

Actually, we were very pleased to have been able to characterize 2 NEP inhibitors in the clinic.

And certainly, in terms of their tolerability profile and their engagement to the targets, we were satisfied that both have met our target profile.

Yes.

And just to add to that, importantly, each of the NEP inhibitors -- and this is the unique advantage of these NEP inhibitors, are cleared through the lever, not through the kidney, making it more appropriate for patients with renal compromise.

Our next question is from Louise Chen from Cantor Fitzgerald.

It's Brandon Folkes, on for Louise.

Just continuing a bit on the 9855 and trying to think through the market opportunity there.

How large are the other products for nOH currently?

And how do they compare to 9855 in terms of efficacy, safety, perhaps, you can just elaborate on dizziness, standing time, durabilities, stuff you talked about earlier in the call?

So I'm happy to take the last part, first actually, and then I'll perhaps turn it over to Reneé and Rick, who can give a bit more color on the market opportunity.

But certainly, in terms of disease -- alternative therapies that are available, sadly, there are very few in this space.

In fact, the only 2 drugs that are approved, are midodrine and droxidopa, Northera.

Of those, midodrine was evaluated only for blood pressure, and so none of its clinical studies looked at elements, for example, like dizziness or standing time, or any of the symptomatic improvements.

The drug was approved at the time when the agency, particularly the FDA, had not formulated its view on what endpoints would be most attractive.

And so midodrine is approved only on the basis of changes in blood pressure.

Northera went through 2 iterations in order to be successfully approved in a conditional fashion.

They were able to show symptomatic improvements in a number of their studies, not all of their studies.

But unfortunately, they were not able to show durability.

So the label for Northera reflects the fact that there is no evidence of efficacy beyond 1 week.

And in fact, the label points to the fact that they may -- that there was no evidence to support treatment for longer than 2 weeks.

On that basis, we've been really focused with 9855 to seek durability of response.

One of the key elements in our program, and indeed why we're looking at a 4-week endpoint for the current exploratory study, is to see whether we would be able to achieve what Northera has not been able to achieve, evidence of more sustained, durable response.

Clearly, this is an exploratory study, so it's not perfectly powered to detect this as Northera did in the Phase III program.

But building on the confidence of this, our plan would be to move into the pivotal registrational study and program that would look at standing time, dizziness, a broader range of both functional elements as well as symptom elements.

And the plan here is to differentiate ourselves from both of those therapies, not just on blood pressure, but indeed on symptoms and on sustained treatment benefits.

Despite the limitations of the existing therapies, and I haven't touched on safety, but both of these drugs, unfortunately, that I've mentioned, have a risk of supine hypertension.

This is effectively patients who have low blood pressure, actually having the opposite effect when they lie down.

The blood pressure, in response to therapy, goes too high and they're then at risk of cardiovascular events, heart attack and stroke in the evenings.

As a result, both drugs that I mentioned can only be dosed until 3:00 in the afternoon.

They're given 3x a day, but really are only given in the morning and the early in the afternoon.

Again, in contrast, 9855 has a long sustained plateau-like response and could be administered once daily.

And at least, based on the mechanism, we believe, would have a lower risk of supine hypertension.

Notwithstanding the limitations of droxidopa, in fact, it does reasonably well.

And I'll pass over to Rick to speak about the commercial value of that asset at the moment.

Yes.

I think, the 2 points relative to droxidopa Brett mentioned.

One is the limited duration of response.

The second is the risk of supine hypertension.

The product is doing quite well commercially.

In fact, Lundbeck had their call, I believe, earlier today, and I think recorded sales of $65 million in the quarter, first quarter.

And I thought there was some seasonal effect, perhaps, that might have depressed that versus where they were in the fourth quarter.

So they're doing quite well, quite well with droxidopa.

I think it underscores the dramatic unmet medical need that exists in these patients.

Because as Brett outlined in his comments, the patients with symptomatic, neurogenic orthostatic hypotension are confined to, many times, a wheelchair or their bed, and can't get up and move around.

And that, of course, is what -- our primary objective would be with an intervention like 9855.

(Operator Instructions) And our next question is from Tyler Van Buren from Piper Jaffray.

I have a few more on 9855.

We spoke about Part C, but can you just remind us what the encouraging responses that you observed in Part A during the single-ascending dose portion was and if you see those data by the end of late July when the data report out?

Thank you.

This is Brett.

I'll remind folks on the call that, actually, the initial design of the current study was purely a single-ascending dose study.

So when we initiated this, Part A was an important dimension of the program.

We started with a very low dose and climbed up through several dose increments, looking to assess for an individual patient and then across several patients, where they might start to get symptomatic improvements.

And the primary focus here was actually on blood pressure.

It was on evaluating whether patients had the ability to sustain normal blood pressure, or at least some improvements in their blood pressure when moving from a lying to a sitting, and then from a sitting to a standing position.

As a number of secondary evaluations, we did look at things like their ability to stand for a period of time and then, indeed, whether they have any symptomatic improvements, including dizziness.

But that was not the primary focus of Part A. So Part A was very much focused on what we call pressor responses or blood pressure changes.

And in answer to your question, that information will be shared at the time that we report on the Part C data.

Part C was introduced, lastly, because we observed that patients who had gone through the single-ascending dose portion and were commenting on the improvements that they felt, we're asking whether they could continue to take therapy on an ongoing basis.

And rather than provide that in a compassion fused fashion, we chose to transform the design of the study to include a long-term follow-up durability assessment.

So that within the conditions of the protocol, we were able to collect the information on these patients who were experiencing a benefit of for a single-dose and then were able to continue.

Okay.

That's very helpful.

And with the initial data that we receive, leading up to the primary endpoint at week 4 and the single-ascending dose portion, will we be able to look at that data and compare it to, say, the initial, like 1-week Northera data and kind of glean if there's any potential efficacy advantage?

Is there anything based upon the mechanism in the off-label atomoxetine use that you think might lend an advantage?

And then, secondarily, related to the week 4 data, what percentage of patients do you think would be encouraging to see that maintaining on therapy with respect to durability that would clearly demonstrate that it's a more durable treatment than what we have today?

Yes.

This is Rick, and then I'll turn it back to Brett.

Well, clearly, what we wanted to do with the Part C was to demonstrate the durability of response.

The ability for a short-term response, while encouraging for us was not -- certainly, that level of evidence wouldn't have had us thinking about a pivotal program.

But if we could demonstrate durability of response and maintain a number of patients on therapy out for 4 weeks that, in fact, would be quite interesting.

And to do that without patients experiencing supine hypertension and looking at patients -- again, we're looking at 3 different sort of categories of patients: the pure autonomic failure, multiple systems atrophy and Parkinson's disease.

And each one of these patient types is different, but each one of them suffer from symptomatic neurogenic orthostatic hypotension.

And as long as these patients have available norepinephrine, then there remains a chance that we can help them with a norepinephrine reuptake inhibitor.

Just a couple of quick points on 9855.

One of the fundamental advantages of 9855 is it has quite a long half-life, an excess of 24 hours.

So that when it goes on these protein transporters, it's not going to come off in the middle of the day.

This is going to be dosed once a day and it's going to exist for a long period of time, blocking the reuptake of norepinephrine.

And that's a fundamental advantage of the product versus anything else that modulates, either serotonin or norepinephrine.

The other point is that it is metabolized by multiple [CYPs] . And of course, these patients, many times, are on multiple other medicines and the drug-drug interactions become a risk for these patients.

And a product like 9855 was designed, in fact, to be metabolized by multiple CYPs because patient populations that would be taking it, we assume, would be on other medicines.

So Brett?

Yes.

Thank you.

Just a few points there.

Actually, you had asked about ability to compare the data against what's out there at the moment.

And I think there will be an opportunity for us to be able to look at durability of response in a way that would allow us to cross-reference against Northera.

Certainly, having patients get to the 4-week endpoint is an important assessment.

But for those patients who achieve that, we'll also be looking in much more detail at things like the quality of life.

The instruments that are used in the droxidopa program are being applied in this program as well.

One point to make is that, because we adapted the design of the study and a lot of patience to continue on therapy, we don't have a placebo in the extension study.

So the patients who go into this Part C are all on active therapy, and that's the one limitation compared to a classic pivotal design study of Northera, is we won't have placebo-controlled comparisons.

But we still believe that in this exploratory phase, we will get a sense of confidence about whether this drug has a durable response.

So I think, although it won't be a perfect match against Northera data, there will be a sense of durability and of symptom improvements that we'll be able to report in April -- I beg your pardon, in July.

And of course, that will then inform confidence about progressing to more definitive studies in Phase III.

Okay.

That's great.

And just a final question.

Understanding that you guys need to have the data, need to have discussions with regulatory authorities, but assuming you get an expedited development path and start Phase III around year-end or early next year, how soon do you think you could get 9855 to market?

Okay.

An excellent question.

And normally, we don't commit at this stage to a definitive date.

But I think that the principles that you're asking for are the right ones.

And in fact, our expectation here is to seek a path that gets us quickly to having this drug available to patients if we're seeing evidence of efficacy.

So knowing that we're operating in an orphan space, knowing that we're dealing with both the cardio, renal division and with the orphan division of the FDA to navigate orphan indications and an expedited path, I think that we are seeing a supportive environment.

I think as we reported on in the script, our discussions to date have been constructive and I expect those to continue to be so.

There is a sense that there isn't much available for patients and that, actually, on that basis, bringing a solid therapy forward is really an imperative.

So I think we feel the urgency.

I wouldn't commit to an exact date at this time, but you can certainly take it from us that we are intent on finding a prompt and efficient path to getting this drug to market.

And just to add -- Tyler, this is Rick.

I think it's important to understand that both droxidopa and midodrine were approved under an accelerated mechanism.

That is actually not what we're -- we're looking for an expedited path, but not an accelerated mechanism.

One, because the accelerated mechanism, of course, gives the sponsor an obligation, in fact, to do a confirmatory study.

So what we're looking for and working with the regulatory authorities on is an expedited development pathway to market, because the other 2 products have not delivered to date a confirmatory efficacy study.

It appears we have no further questions on the phone.

I'd now like to turn the conference back to Mr. Winningham.

Please go ahead, sir.

Thank you very much, operator.

Thanks, everyone, for participating.

We look forward to updating you throughout the course of the year with the events that we've reported on today.

We're very excited about 2018 and how it's going to unfold.

And I'd like to wish all of you to have a great day.

This concludes today's conference.

We thank you for your participation.

You may now disconnect.