Theravance Biopharma Inc (TBPH) 2018 Q2 法說會逐字稿

Ladies and gentlemen, good morning.

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

Thanks, Candice.

Good morning, everyone.

Thank you for joining our conference call and webcast to discuss our second 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 that is associated with today's call and a slide 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.

Before we begin, I'd like to direct your attention to Slide 2 of the deck and 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 is described further in the company's filings made with the Securities and Exchange Commission.

And with that, I'll call your attention to Slide 3 and hand the call over to Rick Winningham.

Thanks, Alex.

Good afternoon -- good morning, everyone, and thank you for joining us.

2018 is unfolding as a year of great progress for Theravance Biopharma as we focus on strategic priorities for the company.

Those programs where we think there is the greatest opportunity to create transformational medicines.

Today, we're pleased to report updates on 2 of those strategic priorities with positive results from both Phase II trial of TD-9855 in neurogenic orthostatic hypotension and from the Phase Ib trial of TD-1473 in ulcerative colitis, which complement the data previously reported.

With both programs, we've also completed exhaustive and extensive regulatory discussions to inform the progression of these programs in the pivotal registrational studies.

Starting with 9855, our goals in the Phase II study were to demonstrate a positive therapeutic impact on blood pressure and symptoms of nOH and to show durability of effect as well as safety and tolerability.

We believe that the top line 4-week data detailed today in a separate release strongly support advancing 9855 into a Phase III registrational program.

In a few minutes, Brett will provide additional perspective on the Phase II data, but we're pleased with these results and especially gratified by the responses from key opinion leaders in neurology with whom we've discussed the data set.

These clinicians support the view that these data are clinically meaningful and highly encouraging and that 9855 has the potential to be a transformational treatment for this debilitating condition in need of new options.

We've concluded our discussions with FDA on the design of the pivotal Phase III registrational program and we plan to initiate the program in late 2018 or early 2019.

Earlier this year, we announced a global collaboration with Janssen for the development and commercialization of 1473 in inflammatory intestinal diseases and plans to move forward in both ulcerative colitis and Crohn's disease.

As Brett will detail in a few minutes, we're excited to share our learnings today from cohorts 2 and 3 of the Phase Ib study in ulcerative colitis patients.

Rounding out the findings from previously reported first cohort, these results demonstrated localized biological activity and minimal systemic exposure with a favorable safety and tolerability profile.

Data from all 3 cohorts underpin our confidence in accelerating to a Phase IIb/3 induction and maintenance study in ulcerative colitis and provide a basis to initiate a Phase II induction study in patients with Crohn's disease.

Our regulatory interactions are progressing well around revefenacin, our once-daily nebulized long-acting muscarinic antagonist currently on file for review, and today, we introduced our brand name for revefenacin, YUPELRI.

For Theravance Biopharma, 1473, 9855 and YUPELRI all represent strategic priorities and each of which was internally discovered and developed by an R&D engine, which serves as an important driver of long-term value for the company.

As an example of how we continue to bring new programs from research to the clinic, our novel inhaled JAK inhibitor for serious respiratory diseases TD-8236 is on track to advance into first in human studies later this year.

This program plus other research stage projects comprising our next generation R&D portfolio, where we leverage our deep institutional knowledge and expertise in therapeutic areas such as respiratory, GI as well as immunology with a focus on developing localized medicines for localized disease.

We look forward -- looking forward to showcasing our foundational research strategy and programs at our R&D Day planned for later this year.

I'd now like to ask Brett to discuss the 9855 Phase II data we announced today and provide updates on our development programs, including learnings from cohorts 2 and 3 of Phase Ib study of 1473.

Thanks, Rick.

I'll begin on Slide 4 and discuss the Phase II trial of 9855 norepinephrine serotonin reuptake inhibitor in patients with neurogenic orthostatic hypotension or nOH.

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

The Phase II study of 9855 consisted of 3 parts.

Part A was a single ascending dose from 1 milligram up to 20 milligrams designed to evaluate the impact on blood pressure and standing time for 9855.

Part B was a double-blind, single-dose study designed to evaluate the impact on blood pressure for 9855 as compared to placebo.

Following emergence of encouraging improvements in patients in Part A and in response to patients request to continue taking therapy, the study was amended to include Part C. This part of the study focused specifically on evaluating improvements in both blood pressure and symptoms in nOH under repeat dose conditions.

The primary assessments in the study were measured after 4 weeks, although patients can continue to receive medication for up to 5 months.

Before I describe the data, I'll take a moment to explain what we mean by OHSA Question #1 and the symptom measurement scale used in nOH.

OHSA stands for orthostatic hypotension symptom assessment and it's a validated scale assessing the presence of a range of symptoms in nOH, including dizziness, weakness, problems with vision, fatigue, trouble concentrating and head and neck discomfort.

It's based on a scale from 0 with no symptoms to 10, which is the worst possible severity of a symptom with reductions in OHSA indicating symptom improvement.

OHSA Question #1 specifically measures patients' dizziness, lightheadedness, feeling faint or feeling that they might black out.

OHSA Question #1 has been accepted as a suitable endpoint in the investigation of nOH by regulatory agencies and was used in the conditional approval of droxidopa in nOH.

With that in mind, I'll turn your attention to Slide 5 and the results we generated in the Phase II study, starting with observations from Part A and B.

As we previously reported, the majority of patients treated in Part A, 27 of 34 patients or 79% showed a response in improved systolic blood pressure with doses above 5 milligrams.

We were very encouraged, not only by the percentage of patients reporting improvements in this portion of the study, but also by their request to continue therapy beyond a single dose, which led to the addition of Part C to the study.

Part B was the single dose placebo-controlled sub-study of 10 patients, 5 on placebo and 5 on active 9855, who'd shown a blood pressure improvement in Part A. These patients started from a lower than normal baseline systolic blood pressure.

The plus at the bottom of the Slide 5 shows systolic blood pressure response after dose.

Placebo patients showed a continued drop in mean systolic blood pressure during the course of the day in response to postural changes and after meals, consistent with the underlying condition.

In contrast, patients on 9855 showed an increase in mean systolic blood pressure during the day.

The treatment difference between 9855 and placebo was 30 millimeters of mercury at the 4-hour time point, a statistically significant difference with a P value of 0.011.

Importantly, there was no evidence of 9855 causing elevations in systolic blood pressure at 12 hours or beyond, a time when patients would be lying down to sleep and where supine hypertension is a risk with other therapies, such as midodrine or droxidopa.

Now moving to results from the Part C extension phase on Slide 6. We were extremely pleased to observe that more than 75% of patients, 16 of 21 enrolled in Part C continue to take their therapy after 4 weeks.

These 16 patients showed a mean reduction of 2.4 points in the OHSA Question #1 at 4 weeks with more than 60% of patients showing a reduction of 2 points or more.

Recall that patients were eligible to be enrolled in Part C based on their blood pressure response in part A, not on the severity of their dizziness.

There is an OHSA Question #1 threshold of 4 points or more that's used by clinicians and in pivotal clinical trials to define patients with clinically meaningful dizziness.

This is the threshold we'll be using as an inclusion criterion in our Phase III program.

Applying this threshold, 3 of 16 patients were not symptomatic coming into Part C, but 13 patients were.

These 13 patients reported a mean OHSA Question #1 reduction of 3.8 points from baseline after 4 weeks of treatment.

To put this in context, the droxidopa label reflects a maximal reduction of 2.3 points from baseline at 1 week of dosing and droxidopa has not been shown in clinical studies to produce durable response beyond 2 weeks.

In terms of blood pressure effect observed in the extension phase of the study, treatment with 9855 in Part C lead to clinically meaningful increases in standing systolic blood pressure 3 minutes after standing up, with a 7 millimeter mercury or greater increase at all time points on all clinic visits.

Although patients could change their dose during the course of the study, the 10-milligram dose was the most frequently prescribed dose.

9855 was generally well tolerated through this 4 week dosing period.

The most commonly recorded adverse event in Part C was urinary tract infection, a condition commonly associated with nOH as a result of impaired blood function caused by autonomic nervous system dysfunction.

There were 4 serious adverse events, but none were assessed as drug related.

As Rick noted earlier, we're highly encouraged by this data and by the favorable responses to these results from neurology experts who treat patients with nOH and who are acutely aware of the debilitating nature of this condition and the unmet need it represents.

As we had hoped to show when we undertook Part C, we believe the durability of effect on dizziness and blood pressure observed in patients on active therapy after 4 weeks of dosing may prove to be one of the key differentiating features for 9855.

We will continue to track all patients through the remainder of their 5 month treatment period and will report detailed results from the full study at a future scientific meeting.

We've also completed a series of interactions with the FDA to confirm the scope and design of the pivotal registrational program for 9855.

We have clarity on the endpoints that will be required and are now in detailed planning activities to initiate the program in late 2018 or early 2019, testing the 10-milligram dose.

We will be providing more details on the Phase III program in future business updates.

Now I'll turn your attention to Slide 7 and our Phase Ib study of 1473 in ulcerative colitis.

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

We also previously communicated data from the first cohort of 80 milligrams dosed once daily.

More recently, we've completed the 2 additional cohorts, 1 dosing 20 milligrams and the other 270 milligrams once daily.

While we and Janssen plan to provide complete results from the study at an upcoming major GI conference, I'd like to provide a little bit more detail on these 2 cohorts to provide further context in support of our confidence to progress the programs in both ulcerative colitis and Crohn's disease.

A total of 40 eligible patients with moderate to severely active ulcerative colitis were enrolled across the 3 cohorts and received either placebo, 20, 80 or 270 milligrams of 1473, once daily for 28 days with approximately 10 patients in each arm.

I'll remind you that the study was not powered to evaluate the efficacy and only dosed patients for 4 weeks, as opposed to most Phase II and Phase III induction studies that include 8 weeks of dosing.

Even with the shorter treatment period of only 4 weeks, we observed encouraging evidence of biological effect, including on efficacy endpoints.

Rates of clinical response were higher for all active doses than for placebo, using both the partial Mayo and total Mayo definitions for clinical response.

And the greatest effect was seen with the top dose.

Rectal bleeding scores were improved relative to placebo for the 80- and 270-milligram doses.

The most notable findings were that endoscopic improvements and even mucosal healing were reported in each of the 3 active treatment arms.

While in contrast, no patients in the placebo arm reported either endoscopic improvements or mucosal healing.

Recall that all endoscopic readings were conducted centrally by a blinded gastroenterologist.

Clinical responses were matched by dose-dependent reductions in surrogate biomarkers, notably C-reactive protein and fecal calprotectin.

The pharmacokinetic data from the Ib study in patients also provided critical insights regarding the localized effect of 1473.

Most importantly, plasma levels of 1473 in patients were all very low across all 3 active dose groups consistent with those previously observed in healthy volunteers.

In terms of tissue PK taken from IFC samples of the affected gut wall, there was evidence of dose-related increases in local G.I. tissue drug concentrations with 20 milligrams showing lower concentrations than either 80 or 270 milligrams and the latter 2 doses producing mean concentrations above the JAK IC50 inhibitory concentration in the inflamed tissue.

Data confirmed 1473 as being delivered locally to the gastrointestinal tract with minimal systemic absorption.

There were 2 serious treatment-emergent adverse events, both hospitalizations for ulcerative colitis exacerbation.

One occurred on a patient on 20 milligrams at day 7; and 1 patient, 10 days after completing treatment with the 80-milligram dose.

Neither were assessed as related to study drug.

There were no reports of systemic or opportunistic infections, including herpes zoster or reports of intestinal perforation.

1473 did not show any evidence of reducing white cell counts, including NK cells or platelets or red cell markers.

And while HDL showed dose-dependent increases from low to normal levels, possibly related to reduced inflammation, there was no evidence of elevated LDL relative to placebo.

In summary, the Phase Ib study of 1473 in ulcerative colitis patients demonstrated localized biological activity and minimal systemic exposure with a favorable safety and tolerability profile.

The next ulcerative colitis' study is a Phase IIb/C induction and maintenance study in moderate to severely active ulcerative colitis patients.

Patients will receive one of 3 doses of 1473, 20, 80 or 200 milligrams or placebo once daily for 8 weeks in the Phase IIb induction study.

Responders will then be re-randomized into the Phase III 44 week maintenance study in a study design intended to improve efficiency and accelerate the clinical program.

FDA and EMA have agreed to the design features and the study is planned to start in the fourth quarter of 2018.

In Crohn's disease, we plan to initiate a Phase II induction study in the third quarter of 2018.

This proof-of-concept study will assess 2 doses of 1473, 80 and 200 milligrams given once daily for 12 weeks versus placebo.

We and our partner Janssen are very excited about the progress in the 1473 program and its potential to transform the treatment of gastrointestinal diseases.

Turning now to Slide 8 and revefenacin, our once-daily nebulized LAMA for the treatment of COPD and for which we're pleased to share today the proposed brand name YUPELRI.

Our NDA is currently under review.

As we previously noted, in the first quarter, we completed our mid-cycle review meeting with the FDA.

We remain on track for the PDUFA date of November 13, 2018.

If approved, YUPELRI will be the first once-daily nebulized LAMA for COPD patients, an attractive proposition over current standard of care based on the market research we've completed.

We and our partner Mylan, see significant commercial opportunities in 3 major market settings: inpatients, outpatients and during the hospital discharge transition period.

Our joint commercial planning includes a strategy for Theravance Biopharma to leverage its hospital-based sales force in the inpatient setting for Mylan to capture the very large outpatient market and for combined efforts by both companies in the hospital discharge arena.

We are also determining responsibilities for other commercialization elements such as DME providers and distribution channels.

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

Thank you, Brett.

Starting on Slide 9, revenue for the second quarter of 2018 was $23.5 million comprised of revenue from collaborative arrangements of $18.1 million and product sales of VIBATIV of $5.4 million.

Revenue in the second quarter represents an increase of approximately $20 million over the same period in 2017.

The increase is primarily related to revenue recognized from both the Alfasigma opt-in payment for velusetrag and the Janssen upfront payment for 1473.

As we've stated previously, we expect to recognize the $100 million Janssen upfront payment over the course of the 1473 Phase II program.

R&D expenses for the second quarter of 2018 were $48.6 million compared to $42.9 million in the same period in 2017.

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

Second quarter R&D expenses include noncash share-based compensation of $6.9 million.

SG&A expenses for the second quarter of 2018 were $25 million compared to $24.3 million in the same period in 2017.

Second quarter SG&A expenses include noncash share-based compensation of $7 million.

We remain in a well-capitalized position with approximately $371 million in cash, cash equivalents and marketable securities as of June 30.

Our 2018 financial guidance remains unchanged.

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 does not include income related to our economic interest in Trelegy Ellipta as we recognize this income below the operating line as other income related to our equity interest in Theravance respiratory company or TRC.

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

Trelegy continues to perform well since its approval late last year with steady progress and pair coverage, strong uptake in scripts and as we previously noted, an expanded indication in COPD patients based on data generated from the landmark IMPACT study.

For the second full quarter since the products approval, GSK last week reported Trelegy net sales of approximately $36.5 million compared to $14.6 million in the previous quarter.

GSK has stated they are applying a commercial prioritization to Trelegy, both in terms of level of investment and product positioning, given the unique value proposition provided by Trelegy and in anticipation of additional launches in new markets.

Finally, GSK recently announced a regulatory submission in Japan for the treatment of adults with chronic COPD.

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.

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.

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

Thanks, Reneé.

Moving to Slide 11, we made exciting progress across our portfolio, positive data from the 1473 Ib study in ulcerative colitis and 9855 Phase II study in nOH provide strong clinical rationale for the progression into registrational programs with regulatory dialogues recently completed, each program now has a clear path to late-stage studies.

YUPELRI our brand name of revefenacin, we and our partner Mylan are finalizing launch readiness activities in anticipation of a potential FDA approval later this year.

In our early stage pipeline, we are preparing to advance TD-8236, our novel inhaled JAK inhibitor for serious respiratory diseases into the clinic.

These recent pipeline advancements along with a strong balance sheet and emerging cash flows from Trelegy position us to continue to deliver growth across our businesses from research to commercial to drive value for shareholders and maximize the impact we can make on patients' lives.

Our anticipated upcoming milestones are, for 1473, initiation of a Phase II induction study in Crohn's disease in the third quarter and a Phase IIb/3 induction and maintenance study in ulcerative colitis in the fourth quarter plus full results from Phase Ib study in ulcerative colitis at a future medical meeting.

For 9855, the initiation of registrational Phase III program in nOH later this year or in early 2019.

Additionally, presentation of preclinical 9855 data at the Movement Disorders Congress in October.

For YUPELRI, COPD exacerbation data from the Phase III clinical program will be shared in an oral presentation at ERS 2018 in September, in Paris, and a potential regulatory approval and commercial launch in the fourth quarter.

For TD-8236, our novel inhaled JAK inhibitor and a compound that leverages our unique and powerful institutional knowledge regarding both the lung and JAK inhibition, progression to the first in human studies in late 2018.

For Trelegy Ellipta, potential label expansion in the EU supported by submission of the impact study to the EMA, potential regulatory approval in Japan and in early 2019, the expected completion of the Phase III CAPTAIN study in asthma patients.

And finally, we look forward to our R&D day in December focusing on research in the next generation of clinical programs, which represent the insight and innovation at the heart of our company.

And now, I'd like to turn the call over to the operator for questions.

(Operator Instructions) And our first question comes from Geoffrey Porges of Leerink.

Congratulations on all the progress.

First question on 9855.

Brett, could you help me understand the flow of patients from Part A to Part B and Part C. I just wanted to know which patients were selected on the basis of their responses before progressing to the subsequent stages to understand the context of the placebo comparison?

That was a little bit confusing.

And then secondly, could you talk a little bit about what the individual patient blood pressure excursions have been.

Have you had any patients with systolic blood pressure getting say above 160 or 180?

And then lastly could you give us a sense of what you're seeing in the extended follow-up after the 4-week dosing period?

It sounds as though I think you said 76% of patients are continuing, but are they continuing to get the same level of response or is the response eroding?

And then just quickly, for Rick, Trelegy, you're clearly breaking it out as a separate asset for the company, where you're not operationally involved at this stage.

At what point do you feel sufficient confidence in the outlook for the product and the value of that royalty stream that you might contemplate realizing that value in some other way?

And then, Reneé, could you just comment on the trajectory of R&D spend because it sounds as though you got to really be ramping up with pivotal trials for both -- pivotal trial for 9855 and then the Phase IIb 3 trial for 1473, which you are funding.

So could you give us a sense of how much of a step up we should be expecting in our R&D forecast for next few quarters?

Sorry for all the questions.

Geoff, this is Brett.

I'll answer your first 3 questions.

You were asking about the flow of patients, I'll actually combine that with an answer on the extended phase because we will speak about the flow and then you asked about blood pressure excursions as well.

So just to explain, how we set the study up.

The initial design of the study was only for 2 parts, Part A and Part B and we had 34 patients coming into Part A. They were assessed by their physicians, the treating investigators who are experienced clinicians in treating patients with nOH.

And 27 of those 34 were deemed to have a clinical response, either a blood pressure change and/or a standing time improvement at one of the doses that was assessed.

And that dose was different for different patients, but on average, settled around the 10-milligram dose.

So 27 patients were eligible to continue beyond Part A. The first 10 of those patients were considered for Part B and they were in fact randomized to either active or placebo and their blood pressure was assessed in the double-blind phase that I shared the data for.

But, while we were conducting Part B, we acknowledged and recognized that there were several of these 27 patients requesting extension on their therapy.

And so alongside Part B, we designed Part C and allowed patients to move into this ongoing maintenance portion.

That took us a little while to get up and running and certainly, during that time, there were patients who became ineligible from Part A to go into Part C. Of the 27 that could have been considered, 21 went into the extension study.

Sadly because of the progressive nature of this disease, there were some patients who were either too well or in some cases, sadly had died before being able to go into Part C. So 21 patients were able to go into Part C, 16 of those completed the first 4 weeks.

There were 5 withdrawals.

One patient just withdrew consent, another patient sadly had a fall, and there were 3 patients in whom the physician felt there was not enough benefit within that first 4 weeks to continue, but 16 patients continued.

Those 16 have continued to receive therapy beyond 4 weeks and in fact, the first 4 patients have now gone all the way through their 5 months of dosing.

We've had 1 patient drop out only after 2 months, but everybody else has continued.

So of the 16 who got past 4 weeks, 15 are either ongoing or completed the full 5 months of treatment.

Although these numbers are small in this rare condition, I see each of these as really encouraging for us.

We interpret these as indicators of ongoing clinical benefit.

These patients are free to withdraw consent at any point.

I'll remind you that these patients are not able to use either midodrine or droxidopa at any point in the study.

So they really aren't dependent on therapeutic benefit here and are free withdraw and go onto other therapies if they feel that they're not gaining any benefit.

So we've used those surrogates really as markers of confidence.

You asked about blood pressure excursions.

Perhaps by way of background, just to remind you that patients with nOH, around 50% of patients experience supine hypertension in the absence of any treatment, so that's the background prevalence.

We had 1 patient with supine hypertension as a precondition at baseline and that patient was withdrawn after having a relapse of that supine hypertension during the course of the study.

And one of the patient had a report of new supine hypertension not previously reported.

But those were the only 2 and as reported in the early part A of the study, nothing in Part C. And as you saw in Part B, we really saw no evidence of supine hypertension during the double-blind portion of the study.

I will pass on to Rick to answer Trelegy.

Yes, Trelegy, well Geoff, we continue to be favorably impressed with the progression of the product in the U.S. because that's where you have the most granular information.

But I think, the European Trelegy sales and success were just getting started and as GSK rolls out across the world, I highlighted the Japanese submission in my comments.

So I think, we're in the early stage of sort of the sales evolution of the product and clearly, it would be accelerated by with positive results from the asthma study early next year.

We do look at this as a strategic asset.

We do look at it as a potential source of funds either directly or through a debt instrument of some time, but we are really early on in the evolution of the sales cycle and we would expect based on everything GSK has said and how the product is performing for the sales and therefore, the economic benefit that accrues to us to continue to improve quite significantly over the next 18 months.

Reneé?

And Geoff, you had asked about the trajectory of R&D spend given the studies that we'll be initiating.

And yes, you're correct, we'll be paying for the Crohn’s study IIb in the ulcerative colitis program as well as the 9855 study.

As you know, we don't generally provide quarterly guidance, but I would reiterate that we are on track with our financial guidance for the full year of $180 million to $200 million in op loss excluding stock-based compensation.

And if you look at where we are year-to-date with about $86 million on that metric, including roughly $10 million received from Alfa Wassermann you will see that we are on track there.

With respect to 2019 guidance, I would expect we provide that early in 2019 as we normally would.

So stay tuned there, but we are pretty comfortable with where we are relative to our full year guidance.

And our next question comes from Tyler Van Buren of Piper Jaffray.

Congratulations on the positive data updates.

I guess, the first question would be, as we think about the results that were reported for 9855 and compare it to the historical Northera data, I guess, it's a little bit difficult because we don't have mean baselines.

But as you look at the earlier time points, perhaps at 1 week and then as you also look at the data at 4 weeks, is it possible to give us some sort of a sense of the percent reduction in the OHSA item 1 score or perhaps the placebo-adjusted percent reduction and how we should look at comparing that to the Northera data?

Tyler, this is Brett.

As you know, Part C match placebo and that was by design.

These were patients who were requesting ongoing active therapy.

So we haven't got a perfect correlate to answer your question in terms of comparing to the placebo-controlled responses that were seen with droxidopa.

But I think we can provide some measure of overlap with what was reported before.

With the droxidopa pivotal study and in fact, particularly the study 306B that was reported in support of their approval, they were able to demonstrate a change from baseline on active of around 2.3 points and this was in patients who had to have some symptoms at baseline.

When we apply the same threshold and by the way, that change of 2.3 was seen at 1 week that was the deepest response they got.

They actually saw less response when they continue to track patients at 2, 4 and 8 weeks.

The treatment delta or change from baseline drifted back up towards 2 points.

But if we apply the same criteria at baseline, it's those 13 of 16 patients I'm referring to who were symptomatic at baseline coming into Part C. In those patients, we see a change from baseline of 3.8 points.

So the treatment difference that we're able to overlay on droxidopa would suggest that in patients who are symptomatic at baseline and these are the patients we'll recruit in Phase III, we should see treatment differences that are at least as good as droxi for longer, but if we're able to maintain these effects, we should see greater treatment differences than we're seeing with droxidopa assuming, of course, that the placebo response is comparable to what they had in their own studies and we have no reason to believe that it would be different.

Does that answer your question, Tyler?

Yes, that's very helpful.

And I'm staring at OHSA Item 1 score draft in the label.

So is it safe to say -- and that's helpful in the magnitude at week 1 but is it safe to say that these patients didn't have that rebound from week 1 to week 2 as we saw -- as that graph shows in the droxidopa label?

So in our own program, we've evaluated the treatment effects on weekly intervals throughout the 4 weeks.

And the durability that we describe here is because we're seeing that degree of change, that magnitude of effect in each of the weekly assessments.

So our improvements we believe are more durable because we're seeing greater magnitude of effect not only at 4 weeks, but throughout the 4-week dosing interval.

Got it.

That's helpful.

And I believe you all were measuring norepinephrine levels at baseline or throughout the study.

Was there any correlation there to response?

And what do you think about as using as a potential biomarker moving forward?

It's a great question, Tyler.

And in fact some of what we'll be disclosing in future scientific meetings will give a lot more insights, including correlation with underlying disease state as well as baseline norepinephrine levels.

Today, we've obviously focused on the top line results, but we certainly will be bringing that material -- those data to future scientific meetings.

Great.

And just finally, if the pivotal study is started around year-end or early next year, what do you all think is the approximate time line to approval and market launch?

So it's a great question.

I think we are always a little bit hesitant to perfectly predict on our enrollment rates.

I think it is fair to say that right now having just completed our regulatory discussions, we are finalizing our sample size for the entire program and that will obviously drive recruitment rates, but we are in advanced discussions with investigators in scaling up for this program.

So really all eyes now are on initiating this program before the end of this year or very early next year.

Would it be possible to...

Sorry, once we get the study up and going, we will be able to provide more context in timing, anticipated timing.

I would just hang in.

I know it's maybe not a fair proxy, but could you just remind us how long the Northera pivotal trial took from start to data?

So they had several attempts, as you may recall Tyler, in getting successful approval.

There were 2 separate filings in there to run further studies actually after a series of failed studies.

I'm not sure that their program would necessarily be a reasonable proxy for what we're hoping to achieve.

I think -- our intention here is obviously to seek an expedited path with as lean a program as possible.

So I'm not sure that the droxi analogue would necessarily be one that we draw reference to.

And our next question comes from Josh Schimmer of Evercore ISI.

First on 9855, how is the dose determined for Part B and how do you assess whether any individual patient is dose optimized?

Thanks, Josh.

This is Brett.

So, in fact, in the early part of the study, we didn't have a perfect answer to that.

We were curious as to whether there may be very different doses required for different patients in order to titrate.

But really the observations we had in the single ascending dose reaffirmed in Part C where patients could change their doses if they needed to based on symptoms or blood pressure.

What became evident is that the majority of patients were really gravitating around the 10-milligram dose and that, that was producing really the most consistent response.

So even though we are allowed for titration in the early parts, our view on the basis of this data is that the 10-milligram dose would be a central dose for Phase III.

It would be the dose we would focus on.

The other point I would add is we've published some data on 9855 with regard to central net occupancy based on PET scans that we've done with the compound.

And clearly, if you look at the occupancy measures, it would also guide you -- would provide additional support to what we actually found in the clinic at 10 milligrams.

Is the 20 milligrams not give incremental benefit?

Or does it lead to excessively high blood pressure?

So it doesn't lead to excessively high blood pressure, Josh.

But when given the opportunity to increase the dose, physicians didn't feel that it was needed or warranted because the patients were getting adequate responses clinically at the 10-milligram dose.

And then for the 30-millimeter mercury benefit at 4 hours, it seems like it was split fairly evenly between a gain in the treatment arm and a reduction in blood pressure in the placebo arm.

How do we think about what a typical placebo responses in these trials might be?

Or what.

For this specific trial design, the placebo response might have been since it looks like it's a little bit hard to get a handle on how the placebo arm performed on blood pressure at least in the droxidopa studies?

Thanks, Josh.

So I think that one difference in certainly Part B of this study is that we tracked this blood pressure over a 24-hour duration.

We were really interested in seeing what the profile would look like.

The placebo response was very much as we might expect it to be.

Patients starting with a low baseline, a low blood pressure, bear in mind, these are patients with nOH.

Their blood pressure even early morning considered somewhere between 50 and 70 millimeters of mercury as opposed to where all of us operate at around 120.

So it's a low baseline to begin with.

And then as patients become active in the absence of therapy, their blood pressure drops.

Interestingly, their blood pressure also drops after meals because blood is directed away from the brain and actually recirculated to the gut in order to facilitate absorption.

So patients often will have further declines in their blood pressure after meals.

And indeed, we see this profile in the placebo response.

You're right, that's part of the difference.

The increases that we saw with the active therapy, taking us around 15 beats -- sorry, 15 millimeters of mercury above their baseline is actually quite reassuring to us.

It's an evidence of the pressure effect.

If you cross-reference the droxidopa, I think in the label they quote improvements of around between 6 and 12 millimeters of mercury based on or depending on the study.

In the placebo arms of those studies, on average, they see a slight increase around 4 millimeters of mercury.

But I think it's probably not fair to compare it directly because those are often spot blood pressures as opposed to profiles as we've generated in the study.

But I think we'll continue to monitor for blood pressure obviously through the remainder of the Phase III program.

As we accrue more patients, it will probably be easier and certainly once we've got balance numbers of active and placebo in larger studies, we'll be able to create a useful frame of reference.

And one last thing I'll say on blood pressure is that, although it is an important precursor to improving blood pressure in this condition, it isn't an end point that regulators are interested in.

And in fact, even physicians will tell us that blood pressure is an important enabler, but it's the symptoms that are critically important.

In fact, above a certain blood pressure improvement, symptoms will completely disappear.

And the reason for that is that above a certain threshold on blood pressure, the brain is adequately perfused to prevent or to ablate dizziness.

So you don't see a perfect correlation between blood pressure and symptoms.

And symptoms have emerged really under the experience of droxidopa as the sentinel measure of benefit and that will be the key focus in Phase III.

That's why OHSA Question #1 is of central importance to us.

Then maybe just one follow-up to that and one other question.

I guess, given that commentary about I mean, it sounds like blood pressure is kind of a proxy for the therapeutic effect, it looks like the benefit sustained for 7, maybe 9 hours, but by 12 hours, at least on blood pressure, the effect versus placebo is diminished.

What is the optimal duration of benefit for a patient, is 12 hours a little short from what they might want to be to kind of make it through a full day and early evening or is that the target profile and then a quick one on 1473.

You had mentioned that the highest dose had greatest efficacy, was the difference between the high dose and the low-dose meaningful?

And do you have any plans to explore higher dose given it sounds like you are seeing a dose response?

Thanks, Josh.

Just on your question with 9855, the profile that we're describing on the blood pressure, we believe to be really very much in line with what we would like to see.

We don't need these patients to have high blood pressures when they're lying down at night.

In fact midodrine and droxidopa carry box warnings for the risk of supine hypertension in the evening.

Both therapies need to be administered at least 3 hours before patients lie down to prevent the risk of overshooting on blood pressure.

And, in contrast, our product, dosed 1 once daily we think in the morning producing this sort of profile would really be ideal because patients don't need that elevated blood pressure when they're lying down.

In fact, we want to mitigate against the risk of supine hypertension.

So this profile is very much in keeping with what we would like.

Symptoms, of course, remain the key measure and OHSA 1 ultimately in our Phase III program we will be looking on a chronic basis at improving symptoms regardless of the time of day.

The recall period for that instrument is 7 days.

So it really looks back over the last week.

On 1473, you're asking about whether there were any meaningful differences between the top 2 doses.

We certainly will be sharing more information on each of the dose responses on a number of our clinical endpoints, including partial and full Mayo.

I think it is fair to say that both the 80 and the 270-milligram dose were giving us confidence that those are within a therapeutic range.

And it's on that basis that the 80- and 200-milligram doses going forward remain central both for Crohn's and for ulcerative colitis.

Based on our tissue concentration data, we are not convinced that there is any additional benefit above 200, which is why we pulled that as the top dose for the next range of studies as opposed to 270.

But the 80 and 200 remain of significant interest to us.

And I think 20 milligrams, although we've evaluated in this program, was beginning to suggest that, that may be suboptimal, not ineffective, but suboptimal.

You'll see that it appears in our ulcerative colitis program and the reason for that is purposeful just as we did with the revefenacin program, its important still to anchor pivotal registrational studies on what we deem to be as subeffective dose.

And that's the reason for the inclusion of the 20-milligram dose in ulcerative colitis pivotal programs going forward.

And our next question comes from Alan Carr of Needham & Company.

It sounds like you're hesitant to give the mean baseline number, but I'm curious, if you can at least tell us if it's meaningfully different from the approximately 5 that was in the Northera trial.

I was wondering also can you tell us whether there were other metrics, other components of OHQ that were assessed in the 9855 trial and any patterns there?

And then, I guess, lastly, around 9855, it sounds -- OHSA 1 is obviously important from a regulatory perspective, but I'm wondering if you can comment on duration.

Is this going to be for the Phase III trial check plan, is there any reason to believe it's going to be different from the 8 to 12-week range that we've seen for some of these other trails in the past?

Thanks very much, Alan.

So no sensitivity in sharing baseline actually.

You're right, the droxidopa average baseline certainly in their pivotal registrational studies was 5.1.

In this study, the extension study, the average baseline for our patients, for all patients, 16 of them coming in, was 6.6.

So slightly more severe in terms of their baseline OHSA than what was reported, but within a range that we think was still significant.

And bear in mind, 3 of those 16 patients actually didn't have symptoms to begin with.

So you can get a sense then of the severity of their baseline dizziness.

And you were asking about associated changes in other measures.

Although we're not going into all the detail of the study today, we'll be sharing that in the future.

I think it's fair to say that looking at the umbrella terms, we tend to focus very much on OHSA Question #1.

It's viewed by clinicians as being the least confounded of the measures.

As you would appreciate, measures such as fatigue, or activity in the context of patients with Parkinson's disease, there may be reasons why they're fatigued or not active, unrelated to orthostatic hypotension, but still related to Parkinson's.

But nevertheless, we still measure them and we saw consistent changes at the overall level with reductions on the OH queue, the orthostatic hypotension questionnaire as well as the subdomains, looking at OHSA the symptom assessment as well as OHDAS, that's the daily activity symptom.

And we'll be reporting more detail on that at upcoming scientific conferences.

And your last question I think related to duration of studies, is that right?

And forgive me, was that in relation to 1473 or 9855?

No, I am thinking more of 9855, the FDA ADCOMs for Northera, the focus on 8 and 12 weeks, wondering if your proposed design with the FDA is meaningfully different from that?

So again, we'll be sharing more detail around the studies at future business updates.

I think it's fair to say though that we've got real clarity from the agency.

And the endpoints that we're looking at are conventional end points.

OHSA Question #1 remains really important in terms of assessing the efficacy.

And then, consistent with droxidopa, the agency is also looking for confidence of durability of response, and so, the designs that we are really now finalizing will reflect that.

But we look forward to updating you on those designs really as we begin to initiate those programs.

We'll be -- we'll provide more detail on what those are.

I wonder if you could comment a bit more about the baseline of 6.6 or actually it would be even higher for the 13 patients that had, I guess, the average response was what, 3.8 of those 13 and you have a baseline that's going to be well over 6.6.

Can you comment on -- why is to say -- why do you think you had such a different baseline population here versus some of the other trials that Chelsea had and then is that something that can be easily replicated in the Phase III like you have enrollment challenges or greater enrollment challenges with higher baseline and can you talk about that a bit?

So just to be clear, Alan, although there were numerical differences here, I'd be careful not to over-interpret them just because there are very different size of studies.

The droxidopa program had almost 300 patients.

We're talking about a much smaller denominator here.

But notwithstanding that, allowing all comers to come into our program, I think, what we were satisfied with is that we weren't getting patients with really 0 symptoms.

We feel confident that interpreting this magnitude of change in dizziness comes from a baseline that was significant to begin with.

You raised a very good point about the eligibility in Phase III and really what we're focused on is ensuring that we enroll the right patients coming into the program that are able to demonstrate improvements to a meaningful treatment.

And in that respect, we are putting not only criteria around a minimum threshold for OHSA, and I mentioned that we're going to use that threshold of 4 points or more coming into the program, but we'll also be really rigorous in ensuring that these are patients who are able to report those symptoms with accuracy.

So we're putting a lot of investment into ensuring that these patients are properly screened, including with tilt table assessments coming into the next portion of the study.

Tyler asked earlier about thresholds for norepinephrine, and again, that's a -- the plan in the program is to use thresholds to ensure that the patients who are coming in could respond to this mechanism.

Bear in mind that, in contrast to droxidopa and midodrine, this compound, 9855 doesn't add extra exogenous norepi into the system, it really prevents the breakdown of what's already in the body and that's in contrast to these other 2 mechanisms.

So we're going to be using those sorts of criteria to ensure that we recruit the right patients and we are confident having based -- having done feasibility with sites that treat these patients, we are confident we will be able to identify them.

That actually triggered another question.

What percent of these patients -- did you disclose what percent of these patients were Parkinson's versus pure autonomic failure or MSA, can you tell us that if you haven't disclosed it?

We haven't disclosed it, but plan to at a future scientific congress.

So we'll provide the details around that breakdown certainly in a scientific forum.

Can you say whether it was distributed across...

Operator...

Did it represented...

Again, I think we'll -- we're going to hold that for the scientific congress, it's just out of respect for the fact that today was a top line review.

But certainly it was representative of the population.

Yes, representative of the population, both MSA and Parkinson's disease patients were in the study.

Operator, we're just about up.

Thanks, Alan.

Just about up on the hour, operator.

If there is another question in the queue, we have another minute or 2.

And our final question comes from the line of Louise Chen of Cantor Fitzgerald

So first question I have was just based on the latest data for 9855, do you still believe you can get an expedited development pathway for this product?

And then, I just had a question on your TD-8236 product.

What is the market landscape here?

And what supports proof-of-concept for the opportunity for you?

Thanks, Louise.

Certainly, our plans continue to be for an expedited program.

We are working with a rare condition here.

And so, certainly, this is aligned with the program that we've agreed with the agency.

The purpose is very much to continue and expedite a development.

You had asked about our inhaled JAK and I'll ask Rick to comment too, but certainly, I think we will provide more details in terms of our clinical development strategy as we get really close to the market, I beg your pardon, to the clinic should I say, but let me pass over to Rick to comment on the inhaled JAK.

I think clearly there exists -- continues to exist an unmet medical need in the broad patient population in severe asthma.

There are patients that are uncontrolled on current therapy and compliant to current therapy.

These mix between maybe traditional Th2 and non-Th2 patients.

I think, that even with the advent of some improved medicines out there such as the IL-4 and IL-13 product, I think, that the market continues to be quite significant.

And the beauty -- of course, the beauty of an inhaled medicine and our objective with all localized therapies is that you can deliver the medicine directly into the lung without an overlapping toxicity of a systemic therapy therefore, for the potentially first time, for those very serious patients being able to execute a combination therapy without overlapping toxicity, but we will be talking and providing more data, market data, and so forth through the rest of the year on 8236 and the opportunity that exists there.

Thank you.

It appears we have no further questions on the phone.

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

Please go ahead, sir.

Thank you very much, operator.

I'd like to thank everyone for joining us today and listening to our business update.

Have a good day.

Ladies and gentlemen, thank you for participating in today's conference, this does conclude the program and you may all disconnect.

Everyone, have a great day.