Travere Therapeutics Inc (TVTX) 2023 Q1 法說會逐字稿

Good day, and welcome to the Travere Therapeutics First Quarter 2023 Financial Results and Corporate Update Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference call over to Vice President of Investor Relations, Naomi Eichenbaum. Please go ahead, Naomi.

Thank you. Good afternoon, and welcome to Travere Therapeutics First Quarter 2023 Financial Results and Corporate Update Call. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined in the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer; Peter Heerma, our Chief Commercial Officer; and Chris Cline, our Chief Financial Officer; Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session.

Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Litigation Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC.

In addition, any forward-looking statements represent our views only as of the date such statements are made, May 4, 2023, and Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Naomi, and good afternoon, everyone. The first quarter of 2023 has been one of the critical milestones, representing significant progress across the organization. These advancements have positioned Travere for sustained growth, led by the ongoing launch of FILSPARI in IgA nephropathy and bolstered by the continued progression of our pipeline. The most notable achievement in the quarter was the U.S. accelerated approval of FILSPARI or sparsentan for the reduction of proteinuria in adults with primary IgA nephropathy or IgAN, at risk of rapid disease progression. The approval of FILSPARI marks the first and only nonimmunosuppressive therapy for the reduction of protein proteinuria in IgAN.

While we are only in the early stages, the commercial launch is progressing very well and in line with our expectations. Today, we'll focus on the important takeaways from the first 6 weeks. But I am very pleased with the early demand in the commercial organization's execution, which instills confidence that we will effectively position FILSPARI to meet or exceed our internal goals for the year. Furthermore, we were very excited to see the interim results from the PROTECT study published in the Lancet.

These data further elucidate the clinical profile of FILSPARI, demonstrating a greater than threefold reduction of proteinuria from baseline after 36 weeks of treatment compared to the active control irbesartan. The compelling data set supports our confidence in a positive outcome from the 2-year secondary endpoints in the fourth quarter of this year. Overall, it was a great quarter for our efforts to establish the foundation for FILSPARI to become a new treatment standard in IgAN for the addressable population.

Earlier this week, we were disappointed to report that our Phase III DUPLEX study of sparsentan and FSGS did not achieve the primary efficacy eGFR endpoints. FSGS is a very difficult disease to study. Despite this, sparsentan still managed to demonstrate a consistent profile characterized by sustained proteinuria reduction and a well-tolerated safety profile over 2 years. We will continue to analyze the data sets and engage with the FDA and EMA to explore the potential for future regulatory submissions in FSGS. Once we've completed this, we'll provide an update on our direction.

With regard to pegtibatinase, we continue to be highly encouraged by the forward momentum in our program for classical homocystinuria, or HCU. As many of you will recall, HCU is a serious and progressive metabolic disorder that can lead to thrombotic events, serious vision problems due to lens dislocations, bone male formation and a constellation of mental and psychiatric complications. Importantly, pegtibatinase is well positioned to potentially become the first and only disease-modifying approach to treat HCU.

We have made recent strides in our program and remain on track to report data from cohort 6 in the second quarter. We are incredibly grateful to the patients, family members and physicians who have supported us in our pursuit of therapeutic advancements for diseases with high unmet needs. Our team remains committed to our mission of improving the lives of those living with rare diseases, delivering for our patients for the rare disease community and our shareholders.

Now let me turn the call over to Jula for a clinical update. Jula?

Thank you, Eric, and good afternoon, everyone. I'll start by highlighting our continued efforts to support the awareness and education of the Travere clinical profile. As Eric mentioned earlier, we were very pleased with the recent publication of the interim results from the Phase III PROTECT study in the Lancet. The rapid publication in this renowned journal speaks to the scientific relevance and strength of the PROTECT interim results in IgA nephropathy.

The publication serves as a great platform to showcase the interim results from PROTECT, the largest interventional study of its kind in IgA nephropathy. The published results detailed the rapid and sustained reductions of proteinuria seen in PROTECT along with the inclusion of significant new data on complete and partial remission.

The new data highlighted that after 36 weeks of treatment in PROTECT, a significantly greater proportion of patients on FILSPARI achieved complete and partial remission of proteinuria. As recently published, most high-risk IgAN patients will face kidney failure within their lifetime and reducing and maintaining lower thresholds of proteinuria, particularly to levels less than 0.5 grams per day, can impact long-term kidney outcomes. We also saw encouraging early trends on important kidney outcomes. There approximately half the number of patients treated with FILSPARI reached the confirmed 40% reduction in eGFR from baseline kidney failure or all-cause mortality compared to irbesartan.

Furthermore, important data were included that support our belief and the primary efficacy objective of the Phase III PROTECT study that optimally antagonizing Endothelin-1 and angiotensin 2 with sparsentan may lead to protective effects in the kidney structure and function beyond hemodynamics. Specifically, the authors through the conclusion that the proteinuria-lowering effect of sparsentan is unlikely to be attributable to differences in blood pressure, especially given the large differences in proteinuria reduction relative to minimal differences in blood pressure.

Finally, the publication also included additional safety data from the interim analysis, which reported no cases of heart failure at the time of the analysis, no treatment discontinuations or serious adverse events of peripheral oedema, and no significant difference in weight change between treatment arms. These published interim results and the preliminary eGFR data from the interim analysis and the clinical literature demonstrating the relationship between proteinuria reduction and eGFR benefit to support our steadfast confidence for a clinically meaningful and statistically significant treatment effect on eGFR after 2 years of treatment with sparsentan.

I'm pleased to report that the PROTECT study continues to accrue patient data as expected and remains on track for the scheduled top line readout in the fourth quarter of this year. Since FILSPARI's accelerated approval, we've also received solid support from the nephrology community, including physicians, patients and advocacy groups. Following a discussion with an academic nephrologist at NKF, I learned that the Lancet publication was the primary reason behind their decision to start to prescribe sparsentan for a handful of eligible IgAN patients. We are receiving similar anecdotes that physicians intend to alter the way that they treat their patients by including FILSPARI as a key treatment option now that it's available. Importantly, FILSPARI is now included in the treatment recommendations for IgAN and up to date, an industry-leading clinical decision support tool for physicians.

The physician authors recommend that patients with persistent proteinuria after 3 to 6 months of RAS inhibitors be treated by adding an SGLT2 inhibitor or switching the RAS inhibitor to FILSPARI. We eagerly look forward to the confirmatory Phase III PROTECT study data, which we believe will put us in a strong position to enable FILSPARI to become the new foundational therapy and IgAN. Since we recently hosted an update call, I'll only briefly touch on sparsentan's development in FSGS.

While we were disappointed to report that the DUPLEX study did not achieve statistical significance on the eGFR endpoint, it did demonstrate consistent proteinuria reduction of 50% across studies. Importantly, we also saw that with a higher dose, Vercenton continued to be well tolerated. Since we reported our results, we've had a chance to engage with both nephrologists and the patient community. The resounding feedback has been supportive and encouraging.

This, combined with the positive trends seen in the study further supports our motivation in seeking a path forward with regulators in both the U.S. and Europe. Beyond sparsentan, we continue to advance our Pegtibatinase program in classical homocystinuria. As many of you will recall, in the first 5 cohorts of our ongoing Phase I/II COMPOSE study, pegtibatinase demonstrated a dose-dependent response and ability to dramatically reduce total (inaudible) to clinically meaningful levels with the 1.5 milligrams per kilogram dose. Importantly, pegtibatinase was able to show a generally well-tolerated safety profile.

In the sixth cohort, we're examining a higher dose and lyophilized formulation, which will give us valuable insights for the program's next steps and aid our discussions with regulators regarding the design of a Phase III study to potentially initiate in the second half of this year. Additionally, we've made recent progress on our manufacturing to support a pivotal program and commercialization. We hear now more than ever from physicians and the patient community that new disease-modifying treatment options are desperately needed in HCU. And so we look forward to sharing an update on those data later this quarter and plan to provide an update regarding next steps for the program later this year.

With that, I'll turn the call over to Peter for the commercial update. Peter?

Thank you, Jula. I'm pleased to report that we are making great progress in the early days of sales for relos. Our results in the first quarter included only 6 weeks, and we are in line with our expectations. And we are encouraged with the strong level of interest and engagement that we are seeing across the holders, including patients, physicians and payers. Let me reflect on our progress and some of the metrics that we saw in the first 6 weeks of approval until the end of Q1.

Since our approval on February 17, we have remained focused on our 3 launch priorities: educating nephrologists on the efficacy and safety profile of FILSPARI, enabling broad-based access by securing reimbursement coverage and ensuring that both patients and physicians have a positive first experience of FILSPARI. First, looking at our physician education efforts, our commercial field team of overtrading seasoned professionals is successful in getting access to nephrologists and educating them on the first power label. Our strategy is to ultimately reach a universe of 6,000 nephrologists representing roughly 85% of the addressable IgAN patient population for FILSPARI in the U.S.

We have face-to-face interactions with over 2,500 of these nephrologists in the first 6 weeks. These engagements are aligned to our profiling insights, and we are reaching those nephrologists that have been, and we believe will be the early adopters. The reception to first power's efficacy and safety profile has been strong. Physicians consistently mentioned the impressive proteinuria reduction with FILSPARI, and the importance of having a non-immunosuppressive IgAN therapy. And we are excited to see a strong increase in brand awareness now that our team is actively discussing FILSPARI with nephrologists.

As mentioned on the last earnings call, we received our first patient start forms on the first working day after approval, which was also the day that we started educating physicians about FILSPARI, and the first product was shipped to the patient after just 8 working days from a tool. We look at one of these early prescribers anecdotally, with its first patients treated with FILSPARI, over the first 6 weeks, we have observed a rapid proteinuria reduction consistent with what was demonstrated in the interim PROTECT analysis. These are the stories that energize our incredibly dedicated bonds team. This team is going steadfast in serving and educating our stakeholders. And it is encouraging that we are starting to hear how patients may be benefiting from FILSPARI treatments.

In the first 6 weeks, Travere Total Care receives 146 patient start forms, and we see an increasing number of physicians getting enrolled in the REMS program as they have identified patients who can benefit from FILSPARI. Secondly, we are making robust progress in educating payers on IgAN as the leading (inaudible) low disease cause for kidney failure, and that most IgAN patients progressed to kidney failure within 10 to 15 years of diagnosis and the meaningfulness of proteinuria as a prognostic indicator for disease progression.

Within that context, our infield accountees, emphasizing FILSPARI is compelling value proposition to the payers. As a result of these educational efforts, we are seeing FILSPARI being discussed at P&T committees. And the first formularies start including FILSPARI policies. These product-specific coverage plans are aligned to the FILSPARI label indication.

In the first 6 weeks, we achieved 38% payer coverage of the U.S. population. And in the coming months, we anticipate coverage will continue to expand, and we will periodically share our continuing progress. Similar to other newly approved therapies for rare diseases, initial access to FILSPARI is mainly through prior authorization and is denied through appeal processes. We are encouraged with the rate at which patients are able to gain access.

Consumer claims experienced a slow or delayed adjudication process, we have support programs to provide eligible patients with access to products. Finally, our third launch priority is providing IgAN patients, their caregivers and the treating physicians with a positive experience in a FILSPARI treatment journey. And I'm proud for the comprehensive services offered through Travere Total Care, which was designed with the patient in mind to offer easily accessible programs, including personalized education, assistance in the REMS process, supporting the reimbursement process in co-pay assistance for eligible patients. Initial patient feedback is rewarding as we hear through Travere Total Care about patients' appreciation for these other services.

Turning to Travere Total Care, we designed and launched support services to streamline and simplify the enrollment and implementation process for physicians and patients. We are hearing from nephrologists that the ramp process is straightforward. And to my earlier point, we are seeing a significant number of physicians enrolling in the REMS program because they have patients identified that could benefit from FILSPARI.

From a financial perspective, we finished the first quarter with (inaudible) of $3.0 million. It is important to note that this is predominantly based on the specialty pharmacies' initial starting of the distribution channel. As you may recall, we utilized a small network of specialty pharmacies to maintain high services for our patients. One of these specialty pharmacies have multiple regional distribution centers that elected to stop the initial loans to be ready for demand.

As a result of this, we anticipate that a meaningful portion of the stocking in the first quarter will be drawn down in the second quarter and impact our second-quarter revenue. We anticipate that we will begin to see a more representative trajectory of both demand and reimbursement in the third quarter, and a clear view by the fourth quarter. Overall, I believe that the loss is off to a strong start. We are seeing steady demand building. The initial metrics that I shared indicate the nephrology community's excitement of FILSPARI potential for IgAN patients.

With the recent plans of publication of the PROTECT info analysis, inclusion of FILSPARI in the treatment guidance for up to date, the personal experience that nephrologists are getting on the rapid and sustained proteinuria reduction with FILSPARI in their own patients, and the number of nephrologists that are now enrolled in the REMS program gives me confidence that we will continue building the momentum.

With respect to the commercial performance outside of FILSPARI, I am really pleased how our team is continuing the strong execution in connection with our established commercial portfolio. Our bioacid products reported $26.1 million in net par sales for the first quarter, which is consistent with our expectations of single-digit organic growth in 2023. For Thiola, we reported $21.2 million in net product sales in the first quarter, which is comparable to the same period last year. We continue to be reaching patients despite the competitive market dynamics.

Summarizing, we are really pleased with the commercial performance to start the year. Most importantly, the initial adoption of FILSPARI is progressing well and in line with our expectations. We expect the second quarter to work through destocking from the initial loans, and then we move forward to the true all trajectory becoming more feasible beginning in the third and fourth quarters.

Let me now turn the call over to Chris for the financial update. Chris?

Thank you, Peter, and good afternoon, everyone. Our first quarter performance was highlighted by continued strong execution across the organization as well as the strengthening of our financial position. For the first quarter of 2023, net product sales were $50.3 million compared to $46.4 million for the same period in 2022. The increase is primarily attributable to the first reported sales of FILSPARI growth in sales of the bioacid portfolio. As for FILSPARI, we utilize the selling methodology where we recognize revenue when products are delivered to our small network of specialty pharmacies. As you heard from Peter, that has resulted in a large amount of FILSPARI sales recognized this quarter being related to stocking in anticipation of demand.

For the legacy products, as we've seen in previous years, gross-to-net discounts in the first quarter were higher as a result of insurance coverage changes in the beginning of the year. As we move through the balance of the year, we expect these to normalize, but they will continue to be higher for the Thiola business than in previous years. During the quarter, we also recognized $6.7 million of license and collaboration revenue. This compares to $2 million in the same period last year. The increase is primarily driven by a sale of drug products to our partner, CSLB4, as they prepare for a potential launch of FILSPARI in Europe. This activity also resulted in a nearly proportional increase in the cost of goods sold for the quarter.

Research and development expenses for the first quarter of 2023 were $59.9 million compared to $56.6 million for the same period in 2022. The difference is largely attributable to the continued advancement of our sparsentan and pegtibatinaseclinical programs, including clinical trial expenses, manufacturing, and increased headcount. On a non-GAAP adjusted basis, R&D expenses were $53 million for the first quarter of 2023 compared to $53.2 million for the same period in 2022.

General and administrative expenses for the first quarter of 2023 were $72.2 million compared to $46.8 million for the same period in 2022. The difference is largely attributable to the onboarding of the FILSPARI field team and supporting staff, as well as launch-related activities, including the initiation of our REMS program and patient services with the approval of the FILSPARI launch in the first quarter.

During the quarter, we also began to amortize the $23 million milestone payment paid to Ligand upon approval of FILSPARI. On a non-GAAP adjusted basis, SG&A expenses were $55.8 million for the first quarter of 2023 compared to $35 million for the same period in 2022. Total other income net for the first quarter of 2023 was $0.8 million compared to total other expense net of $9.8 million in the same period of 2022. The difference is largely attributable to a recognized loss on extinguishment of debt relating to the refinancing of our convertible notes in March of 2022, partially offset by an increase in interest income.

Net loss for the first quarter of 2023 was $86.3 million or $1.27 per basic share compared to a net loss of $76 million or $1.20 per basic share for the same period in 2022. On a non-GAAP adjusted basis, net loss for the first quarter of 2023 was $56.2 million or $0.82 per basic share compared to a net loss of $51.6 million or $0.82 per basic share for the same period in 2022.

As of March 31, 2023, the company had cash, cash equivalents and marketable securities of $561.5 million, which includes $216 million in net proceeds from our underwritten offering of common equity in early March and also reflects the $23 million milestone payment we made to Ligand as a result of the FILSPARI approval in February. Looking to the balance of 2023, we anticipate that our operating expenses will increase moderately and may be variable quarter-to-quarter as we advance our programs. Importantly, we will be focusing our investments in the FILSPARI launch in IgAN and the advancement of pegtibatinase as the potential first disease-modifying therapy for HCU.

We remain disciplined in our investment in FSGS while we work towards further regulatory guidance later this year. With our strong financial foundation, we anticipate that our cash balance can support our operations into 2025. This takes into account the investments I just highlighted in FILSPARI and pegtibatinase, as well as potential further competitive dynamics for Thiola and potential milestone payments related to achievements for the programs.

I'll now turn the call back over to Eric for his closing comments. Eric?

Thank you, Chris. We began the new year with the first FDA approval from our rare disease pipeline. The accelerated approval of FILSPARI marks the first and only non-immunosuppressive treatment indicated for the reduction of proteinuria in patients with IgAN, and I am very pleased with the execution so far in the launch. Most importantly, following the first 6 weeks of launch, we are well in line with our expectations for demand, patient access, and reimbursement.

And I'm very pleased with how our team is executing on our launch plan. We will remain focused on building momentum as interest among nephrologists continues to grow, and we look forward to providing regular quarterly updates on the FILSPARI launch. We also have a number of exciting milestones ahead of us this year. We look forward to the top-line results from the PROTECT study in the fourth quarter of this year and remain highly confident in the final results, achieving a statistically significant treatment effect on eGFR as we know physicians are excited to see those data.

We believe positive results will lead to the traditional approval of FILSPARI and catalyze the next phase of growth. Furthermore, we are pleased with the ongoing EMA regulatory review and look forward to a potential approval of sparsentan for IgAN in Europe in the second half of the year. And finally, we are very excited about the opportunity in HCU. The HCU community has been highly underserved, and they are eagerly seeking effective treatment options. Pectibatinase has the potential to become the first disease-modifying therapy for this population if approved, and we look forward to providing an update on the program later this quarter.

Now let me turn the call back over to Naomi for Q&A. Naomi?

Thanks, Eric. Operator, can we now open the call for Q&A?

(Operator Instructions) We will take the first question from the line of Maurice Raycroft from Jefferies.

Congrats on the progress with the launch. Based on the Lancet paper, PROTECT is powered at 90% to detect an underlying treatment effect of 2.9 ml per minute per year. So that translates to 5.8 ml per minute over a 2-year treatment period. Can you clarify if that is the delta versus irbesartan or is that only the sparsentan treatment effect?

Maury, thanks for the question. I will turn that over to Jula.

Thanks, Maury, for the question. So to clarify, we have greater than 90% power to detect a different inflow of 2.9 ml per minute per year with 380 patients. So just to give some more color, this is based on historical data and achieving a 30% difference in proteinuria. And recall, we achieved a 41% relative reduction in proteinuria, giving us a geometric mean ratio of 0.59.

So when you put that on the anchor curve, it predicts a slope difference, close to what we originally modeled, and it shows a very high positive predictive probability for a difference in eGFR. So even with a modest-sized trial. And I'll point you if you want more details, I'll point you to the anchor appendix so that you can actually do some of the catalysis yourselves.

That's helpful clarification. And based on the new DUPLEX data and the view that IgAN is a progressive disease, is there anything additional you can point us to for how we should think about irbesartan treatment effect size on eGFR in PROTECT?

Well, remember the irbesartan in PROTECT was already essentially optimized on RAS inhibition. They were at least 50% label, maxi-tolerated RAS. So essentially, they were treatment failures because they had persistent proteinuria despite this. And there was still an incremental reduction in proteinuria on those ones, but we had a 41% relative reduction in proteinuria compared to the irbesartan.

So I would imagine that we can anticipate those on irbesartan to progress time we've seen in other studies may be slightly better. And in the TarPeostudy, they progressed at 6 ml per minute per year. Maybe they'll do slightly better than that just because we had a slight reduction in protein, but that is what I would say, compared to the historical control.

Got it. It makes sense. And maybe last quick question. Similar to DUPLEX, I'm wondering, do you have any feedback from FDA on whether it would be okay if you miss on a total slope what hit stat on the chronic slope for PROTECT.

Bill, why don't you take that question?

So we don't have a specific dialogue from the agency addressing that with PROTECT. In the discussions around the design of the DUPLEX study they did say that in the end, while the study is designed around total slope first and chronic second, they certainly want to look at all of the elements of the study. And I think that my expectation is they'd be consistent with each program with that type of approach.

We will take the next question from the line of Greg Harrison from Bank of America.

Congrats on the FILSPARI number. Are you able to give any additional color on what part of the $3 million sales number was patient demand and maybe how many patients are on treatment? And then what portion of the 146 patient start forms have transitioned into pain patients? Or at least maybe what should we expect that rate to be over time?

Greg, thank you for the questions. We would be in a position to be able to share, as we mentioned at the approval to be able to talk about the patient start forms as well as revenue, but we recognize certainly that early on in any phase of launch for specialty medicine, you're going to have variability in terms of the stocking as well as how quickly you get that through.

And I think as both Peter and Chris mentioned, it is going to take some time to have that while we did have some reorders or orders that reflect underlying demand, you can largely think about that $3 million as channel stocking for the first quarter. And we are not going to be providing any specifics at this point with regard to the breakdown of or conversion of patient starts forms to reimbursement. They're very in line with our expectations.

We're really pleased with all aspects of the launch so far. But those metrics really are lumpy in the first part of the launch. And we want to make sure that we can provide a consistent set of metrics over time that are going to be predictable and consistent throughout the launch. So stay tuned, we may evolve and be able to share some of that as we have an underlying trend emerge in the launch. But at this point, I would say that you should rely on the $16 reflecting the underlying demand from nephrologists.

Okay. Fair enough. And then the 146 number, it's pretty impressive. I think it's above most people's expectations. Do you think that reflects at all a bolus of patients that was maybe waiting for treatment? Or do you expect more of a steady ramp throughout from here?

Peter, why don't you take that one?

Yes. Happy to do that. it. Thank you for that question. Yes, you don't really see a bot, and you have to realize IgAN nephropathy is still a rare disease even though every metrologist has at least a handful of IgAN nephropathy patients, it's not like a physician has top of mind like, hey, all those patients should come in at a certain day.

So I have to say, especially after spending some time in the field and seeing how busy those community practices are, IgAN nephropathy for us is on top of mind. But for nephrology, in all those spaces they are serving, it's only a small fresh. So I don't think there are some bolus. We're happy with the steady demand that we're seeing, and there is a building demand as well. But I wouldn't say there is a bolus of patients that you're seeing initially. I think you will see a constant steady growing demand with regards to IgAN patients coming into the office as we progress in the launch.

We will take the next question from the line of Joseph Schwartz from SVP Securities.

I was wondering if you can give us any insight into how many physicians have written a FILSPARI prescription to date? And if you can describe the earliest adopters for us?

Peter, why don't you take that question?

Yes, at this point, to years earlier point, we won't be disclosing how many prescribers we have. We have seen repeat prescriptions already. I think it's in line with what you may have expected given the 146 patients start forms. We're very pleased with the way they're receiving the product right now. And to your point, what is the profile of the prescribers so far?

Well, we have really been targeting based in 3 aspects. One is volume, patient volume in the clinic as well as the physician's behavior and adaptation of new innovation as well as the influence. And we see that especially patients, the physicians in large community practices are key to prescribe FILSPARI.

Okay. And then maybe a question on your HCU program. We hear that these patients can be somewhat elusive. So I was wondering if you can describe your relationship with the patient community and the physicians that treat them. And how has that evolved since running the COMPOSE study? How challenging was that to enroll? And do you think it -- how much of a challenge do you think it could be to enroll a larger Phase III study?

Yes, Joe, thank you for the great question. I'll start by sharing a little bit about the relationship and how the community has evolved. And then I'll ask Jula to share some of the insights that her team has gathered in conducting the COMPOSE study. This is a patient community that really has been underserved. And when we took over the program, many of them were actually served by connecting with (inaudible) or PKU community because of a lot of the similarities and how the conditions are managed.

But I think as we've started to really build our relationship with them, they really start to build their own community online as well as with kind of the standard patient advocacy organizations, both here in the U.S. as well as abroad. And I think that we're starting to see a much more concerted and organized effort to articulate what the needs of that community are with regard to earlier diagnosis, improving newborn screening, helping to understand better management of the disease as well as, I think, for us, educating about the importance of engaging in the clinical trials as a potential for innovation in the future. So I think largely, we've been really pleased with how quickly the community has evolved. And I think we've really gained a lot of good learnings with regard to clinical trial enrollment. And with that, I'll turn it over to Jula to share more.

Thanks, Eric. Well, in any rare disease, it can be challenging to recruit because there's very few patients per site. So it can take a bit longer, and you often have to go to where the patients are, and you really do need to engage with your advocacy partners and with the patient community to understand what's important to them, simplify the trial design and provide a lot of support.

And so that's what we're doing moving forward. I would say also importantly, we have significant engagement with the key opinion leaders to make sure that what's important to them and their patient community is what we incorporate into the design of the study. And then we also have a natural history study that helps us with having access to patients who, if they're interested in participating that can provide us with additional patients that can help to enroll a bit quicker.

We will take the next question from the line of Carter Gould from Barclays.

This is Leon Wang on for Carter. And congrats on that. So on FILSPARI, any early signs of the patient profile that docs are prioritizing versus those that they may be waiting for more confirmatory eGFR data or any profiles of docs that may be perhaps waiting for the data and not as receptive to show launch?

Yes. Thanks for the great question. Maybe I'll start by saying with any launch, you typically will see a spectrum of adoption by physicians where you have some that are early adopters and those that are waiting. So it's not surprising that there will be some physicians that want to wait. What I will say is that we're very pleased, and the performance this far from physicians is absolutely in line with our expectations and also in my experience with launches. I'll ask Peter to share a little bit more about the types of patients that we're seeing prescribed FILSPARI in the first 6 weeks as well as the profile physicians that we see adopting.

Yes, I think I'm happy to provide some color on the patients that we are seeing. So the majority, the vast majority of patients are those patients that are in rapid path of progression, with consistent high proteinuria levels. Many of those are above 1.5. But we also have some restrictions for patients with lower proteinuria levels than 1.5 but have additional indicators for rapid progression. So I think not in line with how the indication is written, mainly above 1.5% and also below 1.5 per gram.

Maybe the other thing that, Peter, that I'll add is that the payer mix is very consistent with what we had assumed with the majority of these patients having commercial insurance. So I think a lot of the work that Peter's team did to really profile what this looks like, what the launch uptake could look like is, again, very much in line with our expectations and planning.

We will take the next question from the line of Liisa Bayko from Evercore ISI.

Congratulations on the initial good start here. I know you wouldn't have this right now, but as we think about sort of later in the year, what kind of growth to net can we expect? What would it be initially? I'm not saying about this quarter, but then what do you think it will stabilize around?

Yes, great question, Liisa. Certainly, as you allude to, the first part of a launch is going to be quite lumpy. So we've been reluctant to provide any estimates at this point, but I'll ask Chris to comment on where we think we may be landing once we get to that steady state.

Yes. Thanks for the question, Liisa. Really a stable state, we're going to be looking at mid-to-high teens. And I think what we're seeing now is reflective of us getting there once we do get to that stable state. So no change from our expectations on that point.

Okay. And then just back to the PROTECT and your powering. So Jula, can you just clarify. So you saw a 2.9. So you're powered for a 2.9-milliliter difference slope. That was assuming 30% difference in proteinuria, but you actually got a bigger delta than that. So now you should have a greater difference. Is that the right way to think about that? Because you just -- I didn't hear everything you said, it was a little confusing.

Yes. Jula, would you like to take that?

Well, our initial power calculation was based on historical data, and then you can map it based on the anchor data. So based on anchor data, we fall in line with our original power calculations to be able to predict a statistically significant and clinically meaningful effect at 2 years. The other thing I do want to add to this is that as part of our review for accelerated approval, the FDA was very focused that we'd be able to confirm our benefit at the 2 years.

So they asked us the likelihood of achieving statistical significance, both on the chronic and total slope endpoints for the 2 years. So we provided conditional power calculations that looked at our available eGFR data at the time of the interim as well as the information from the trial-level analysis to address their requests. And importantly, the conditional power calculations provide a very high level of confidence on achieving statistical significance at the 2-year confirmatory analysis.

We will take the next question from the line of Mohit Bansal from Wells Fargo.

This is (inaudible) on for Mohit. Can you discuss whether you think naive patients or patients switching to FILSPARI is the bigger driver of demand in the first year at the launch? And then separately, on the 3% of insured lives being covered, is that ahead of your expectations? And how could we think about that going from here in the type of cadence from quarter to quarter?

Sure. Peter, why don't you take those 2 questions?

Yes, Eric. Thanks for that question. So when you think about like where is the main demand coming from with regards to patients naive or switch, it is very consistent. The majority, vast majority of those patients have been on ACE or ARB in the past and are switched to the sales bar. So I think that is quite consistent. I think, ultimately, you will start to see naive patients as well. I think it's a small fraction of the total patient population because the majority of those patients are prevalent and are already in the offices of the physician.

So what we are seeing right now is much on that phenomenon patient that has not been managed to the proteinuria level that the physician wants and or orgs are being replaced with FILSPARI. So that was the first part of your question. With regard to the second part of the 38% coverage, it's a good number, and it's not in line with our expectations, especially if you take into consideration that it was only after 6 weeks. So 38% coverage by more (inaudible). So I think it's a good number that we feel quite proud of, and I think is at the high end, what you see with benchmark products.

Yes, Adam, thank you for that, Peter. The only thing I would add with regard to actually both of those questions is the quality of the payer coverage. It's really important to think not just about coverage, what's the quality of the coverage relative to the label indication. And we're really pleased to see that there's a high degree of quality when we think about the access for patients aligned to the label.

And we do see a number of those payers that have stepped through ACE or ARB. But again, as Peter alluded to, the majority of these patients are already on as NR. In fact, many of these patients are referred to their nephrologists on ARR. So when we look at the actual quality of the coverage, it's not this 38%, but it's actually the quality of that access, and we're really pleased. Again, early days, but I think it's a great foundation upon which to build throughout the rest of this year.

We will take the next question from the line of Laura Chico from Wedbush Securities.

I guess I wanted to talk a little bit more about the cadence of ordering here. And I guess, Eric, maybe said differently, could you just walk us through what are the expectations around the timing from receipt of a start form to when the product is actually going to be dispensed? What is the time frame there? Sorry if I missed it.

Yes. No, it's a great question, Laura, and it's an important dynamic to think about any specialty launch where there is a range of timelines from prescribing. And I'll ask Peter to talk a little bit about what we're seeing and also what we expect to see throughout the rest of this year. Peter?

Yes, maybe to respond to that. Thanks, Laura, for that question. I think Eric's point, as is typical for many rare disease product launches, there's a wide range of what I call the time to fulfillment, especially in the early days as payer access may take longer. I would say in these early days, the first part-time to fulfillment is in a range that is typical in rare diseases, which is definitely in 30 to 60 days rate, I would say. So we anticipate that this pull-through will decrease if we get more payer coverage.

And I'm sorry, Peter, just to verify, you said it's ranging from 20% to 60%, but over time, would likely to be closer to a typical 30-day range. Do I have that correct?

Well, I'll clarify that, Laura. I was talking about what is common and rare is in general. But I will say we are in inventories. It's more historically what I've seen in rare disease and specialty launches. So it is not reflected (inaudible).

Yes, I think the important aspect, Laura, to keep in mind is we won't provide any specific numbers because it really is only the first 6 weeks of experience after approval. What's important is as we get more broader coverage and high-quality coverage, that lead time should shrink. And I think what's important in the experience that Peter's team has had is that we've already -- one, we're off to a great start with regard to payer coverage and reimbursement.

But we're already starting to see that average time to fill reduce. And I think that as Peter's team continues to execute and we continue to get growing coverage, we'll continue to see that average time as well as the range reduce. So again, really early days, so we don't want to give numbers because it is lumpy. But the dynamics that we're seeing are exactly what you would expect to see with a successful launch.

Okay. That's helpful. And maybe I'll sneak in one quick follow-up. And again, apologies if I missed this, but did you quantify yet how many physicians have signed up for the REMS at this point?

Peter?

Yes. No, we haven't given the number down, but we're very pleased with the basin platform. So we see a steady increase in REM certification and enrollment. And I think it speaks to the physicians that they understand the value that FILSPARI may have for their patients, but all that I understand that the REM's process is relatively straightforward.

We will take the next question from the line of Tim Lugo from William Blair.

This Locklin on for Tim. So I guess heading into the launch, one of the headwinds you guys had mentioned or potential headwinds was just that physicians wouldn't really have -- I wouldn't know the data very well because there's obviously not much has been released. So I'm just wondering how much, I guess, how that has played into the launch so far? Have you seen that sort of affecting any of the interactions or the speed at which physicians are maybe starting to prescribe or is that really not affecting that rate, I guess, compared to what you expected?

Yes, it's a great question, but I think first, I'll point to what Jula mentioned in having a high-profile publication of the interim data that I think really gives physicians a better understanding about the data. But Peter, why don't you share a little bit more about what you're hearing from your team about going through the data on FILSPARI?

Yes. No, happy to do so. So in the nephrology in general, is not as much inclined with innovation and maybe some other specialties given that I have been getting innovation to nephrology in general. And I think that's a phenomenon that we have seen with other nephrology launches, in particular, (inaudible) I think having new data, and this is kind of like a rolling launch because we launched in the first 6 weeks without having a publication or without having further data, which is not very tong to want to product without that specifics.

And so we lost basically on the PI. Also given the promotional restrictions in support of a product with Brazil's accelerated approval. But now that we have the land of publication and we start including in medicine guidance like up to date and as Jula mentioned in her part of the prepared remarks, I think that further provides confidence and provides more insights in that process as well. So I think I'm very pleased with what I'm seeing, both on the intent to prescribe the cost but also the actual prescriptions already (inaudible). I think as we get more data and we have those publications, this will continue to help bring confidence to the nephrologists community and also continue to accelerate FILSPARI.

Yes. I think that's absolutely right, Peter. And I can share with you 2 maybe additional observations. And like Peter, I spent quite a bit of time in the field meeting with customers. I think there's a real eagerness to understand the profile, and the data feels far more. So the publication and guidelines are going to really help provide some of that independent or third-party perspective. But the other aspect is that it really helps understand the REMS better and the profile of a low rate of ALT, and AST elevation because I think in the absence of that information, it was hard for physicians to put into perspective what the level of risk really is. And I think it's been very reassuring for physicians when they see the actual rates in the publication and in the label.

Got it. And on the topic of reimbursement, Peter, I think you mentioned that most of it had gone through, but there were some delays for the patients that you're seeking reimbursement for. I guess to the extent that there have been delays, can you maybe talk about what pushback you're getting from payers?

No, I wouldn't say that. I mean as you don't have inclusion in the formulary, I mean it goes through the prior authorization pathway. And so that generally takes longer. I mean, I think that's a common process in rare diseases in particular. So I wouldn't indicate this as like particular obstacles that we are seeing for FILSPARI.

We will take the next question from the line of Vamil Divan from Guggenheim Securities.

I think most of mine on the launch have been asked and answered. But just one more, just in terms of the patients that are getting FILSPARI so far, obviously, just early. I'm trying to get a sense that you mentioned sort of the ANR dynamic. But in terms of SGLT2s, if you can comment on neuro patients already on SGLT2s or not? And also curious with the label mentioning the greater than real 1.5 gram per gram. Is that sort of a metric that physicians seem to be sticking with?

Or are they just using their judgment, and maybe patients are even below that threshold? And then the second question is more on the expense side, I guess, for Chris, just how we should think about, especially SG&A spend this quarter? The first quarter was a little bit more than we were expecting. Is this sort of a reasonable amount to assume going forward? Or is there still a little bit of buildup we should expect sort of higher ramp-up as we go into 2Q and 3Q this year?

All right. Vamil, thanks for the questions. Peter, why don't you take the first on the patients?

Yes, it's a good question. Maybe I'll start answering the question by giving a broader perspective on the patient profile because this is often a younger patient population. Many of those patients are being diagnosed in early 20s. And that's what we are seeing as well, many young patients that are on a path of rapid progression. And to your point, what we're seeing is many of the current available medication doesn't bring patients to the level to the target level that physicians would like to see. It didn't do that. We have SDL to do.

I think that's something that you mentioned as well, and we see that increased utilization in SGLT2. The statistics feel very comfortable in combining its needs or, if appropriate, with SGLT2 as it's mechanistically synergistic, but also FILSPARI has that very rapid progression of 50% point, which physicians haven't seen with older medication, and especially the not unsuppressed nature of FILSPARI with or without combination with SGLT2 make statistically very comfortable, especially when you talk about the human page profile that has been -- yes, the side of it got of a new suppression is not the repression, especially for this patient population.

And Chris, for expenses.

Yes, absolutely. Thanks for the question, Vamil. What I would point back to is in the prepared remarks, I talked about for overall expenses, we anticipate moderate increases for the balance of the year. And really, when I think about the breakdown of SG&A and R&D, that's probably more pointed towards R&D as we look to continue both the DUPLEX and PROTECT studies that are going to continue on for the balance of the year.

But then also the pegtibatinase work that's going to go into the potential initiation of a Phase III as well as the supply, CMC work that all needs to be done to scale up for both Phase III and commercial. And so I think that's where you'll see likely the larger magnitude of increase come for the year. I think from an SG&A perspective, there may be some modest increase from this point, but I wouldn't expect it to be of any significant magnitude. And really, what we've gotten to in this first quarter is the first time in which you had the full sales force fully in place doing all the promotional activity and putting that right investment behind FILSPARI to make sure we can position appropriately for IGA.

We will take the next question from the line of Alex Thomson from Stifel.

I got one question on FSGS question. I guess on an, I'll try to ask another sort of commercial dynamics question. I guess, given that you're starting by targeting a lot of higher volume prescribers, can you talk a little bit qualitatively about whether a majority of the start forms that you're seeing so far coming from single physicians or multiple physicians writing multiple start forms for patients? Or is it broader than that? And then on FSGS, can you comment on sort of historic flexibility within the cardio renal division and if there's any good precedent for them sort of looking towards subgroup analyses in rare disease, especially?

All right, Alex. Thanks for the questions. Peter, would you like to take the IgAN question?

Yes. Thanks, Alex. So if I understand your question correctly, your question was like, do you see many prescriptions from prescribers that have multiple prescriptions or more single and if it's mainly in the higher-volume centers? I think it's early to make a specific statement on that. I think we see the majority of the prescriptions coming from community centers, especially from large community centers, but we also see prescriptions from academic centers. And we see a mix of physicians that have prescribed a single time or a second time. But again, it's early days. I'm describing this for the first 6 weeks, so I wouldn't be too sure with it. We see a large prescriber base, and we see both single as well as multiple prescriptions among those prescribers.

And Bill, why don't you take the question on regulatory flexibility?

Yes. No, happy to. I think the one that comes to mind, quickest is ENTRESTO for congestive heart failure was approved by cardiorenal, I think, in '21, if my memory is right. And that was a drug that missed their primary endpoint, but the decision of the agency was that there was a clear benefit and across the trial based on the totality of evidence and unmet need, that was something that they were interested in approving. I think that there have been other instances across rare disease indications. And I think the most recent work that I read was in JAMA, where they said about the past 5 or 10 years, about 10% of the drugs approved by the FDA were ones that missed their primary endpoint in their pivotal studies. So it's not the norm, but it's also not something that's unheard of.

And Jula, anything further that you'd like to add on that question?

I would also point to Fabry is another potential indication for (inaudible) to look at as another reference.

We will take the next question from the line of Antonio Arce from H.C. Wainwright.

I see here, obviously, first 6 weeks, $3 million is, as you said, represents mostly stocking and 146 TSFs mostly demand. And I recognize, as you pointed out, that it's highly variable at the beginning. But I'm wondering, as we get through the next few quarters and years if there are specific launch metrics that you intend to report regularly. For example, we've already discussed sort of the fulfillment conversion rate or number of prescriptions or patients on drugs.

And then perhaps, later on, numbers around persistence or compliance rate. So that's first. And then secondly, just wanted to ask as well on the readout later this quarter in HCU with the higher dose and the lipolyze formulation. The focus clearly is at least partly on the efficacy look from that dose as well as the PK with the new formulation. But what other aspects to the data readout could we expect later this quarter.

Yes. Thanks for the great questions. I'll take the first one. So I think we certainly are looking at a number of different metrics. And it's important for us to make sure that the metrics that we provide regularly are ones that we have confidence in the sort of trend ability and the predictability. We believe that's why we focused on patient start forms and access because they really are robust predictors of underlying demand as well as the ability to pull through and have those reimbursed.

I think as we look forward, you can imagine that there likely will be others, like the persistence rates or the reimbursement rate. And you can look to our commercial business, where we have talked about persistence, the high rate of persistence, et cetera. So as we start to understand the underlying dynamics of the FILSPARI launch, we'll look to evolve what those are. But again, we want to make sure that we really focus on those fundamentals this year that we believe are going to be most important in the first year of launch.

And then with regard to the readout of the cohort 6 and the COMPOSE study, Bill, I'll turn to you to provide some further perspective on what we'll be looking for and possibly what we will be disclosing. But I will say we haven't yet committed to what we will disclose specifically. Bill?

Sure. The Cohort 6, we utilized the highest dose to date on a mig-per-kg basis in the study in what we view as the final cohort in the COMPOSE study. It also gave us the opportunity to utilize the lyophilized formulation and evaluate that in patients. What we're looking for is the most predominant biomarker is going to be the reduction in homocystinuria or in almost total homocysteine over time in the 12-week double-blind portion of COMPOSE. In addition to that, of course, we're looking at safety and tolerability. It's a Phase I/II study and evaluating that for those individuals at that dose. And those patients will roll over into the open-label extension. That will give us the data then to select the dose and help us with the design of the Phase III study.

There are no further questions at this time. Ms. Eichenbaum, I will turn the conference back over to you for any additional or closing remarks.

Thank you, everyone, for joining us for our first quarter 2023 financial results call. We look forward to providing additional updates on our progress. Have a great rest of your day, and thank you.

This concludes today's call. Thank you for your participation, and you may now disconnect.