福泰製藥 (VRTX) 2016 Q1 法說會逐字稿

Good evening. This is Michael Partridge, Vice President of Investor Relations. Welcome to our first quarter 2016 conference call.

(Operator Instructions)

You can access the webcast slides by going to the events section of the Investor Relations page on our website, and a replay of tonight's call will also be available on the website once we have concluded.

Dr. Jeff Leiden, Chairman and CEO, Stuart Arbuckle, Chief Commercial Officer, and Ian Smith, Chief Financial Officer will provide prepared remarks this evening. They will be joined by Dr. Jeff Chodakewitz, Chief Medical Officer for the Q&A portion of the conference call.

We will make forward-looking statements on this call. These statements are subject to the risks and uncertainties discussed in detail in today's press release, and our 10-K which has been filed with the SEC. These statements, including, without limitation, those regarding the ongoing development and potential commercialization of our drug candidates, our expectations regarding our approved medicines, and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially.

Information regarding our use of GAAP and non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP is available in tonight's press release. I would also refer you to slide 4 of tonight's webcast. I will now turn the call over to Dr. Jeff Leiden.

Thanks, Michael. Good evening, everyone. Over the last four years, Vertex has delivered two transformative medicines to people with cystic fibrosis. Today, there are approximately 27,000 people eligible for one of our approved CF medicines, and we have a clear path toward our goal of helping potentially all people with this rare and life-shortening disease in the future.

We're confident that our experience with ORKAMBI and KALYDECO, and our scientific leadership and progress in targeting the underlying biology of this disease, positions us well to increase the number of people treated with our approved medicines, and to develop new medicines in the years ahead that may provide even greater benefit for all people with CF.

Tonight, I'll provide brief comments on three key areas, which serve as markers of our progress toward treating all people with CF, including first, the performance of our approved medicines, ORKAMBI and KALYDECO, and our road map toward treating more patients with these medicines that will drive revenue growth in 2016 and beyond.

Second, the role of VX-661 in helping to achieve our long-term goal in CF. And third, our pipeline of additional CFTR modulators and other mechanisms we are advancing as part of collaborations. These approaches include ENaC inhibition, and in the longer term, gene editing with CRISPR-Cas9, and may position us to help all people with CF.

We're approximately nine months into the launch of ORKAMBI in the US for people with two copies of the F508del CFTR mutation ages 12 and older. As of the end of March, approximately 65% or 5,500 of the 8,500 currently eligible patients in the US have initiated treatment with ORKAMBI. We expect the number of patients who have initiated treatment with ORKAMBI will continue to grow during 2016. And we continue to expect that by the end of the year, the vast majority of all eligible patients ages 12 and older in the US will have initiated treatment.

We've seen excellent reimbursement and access for ORKAMBI from public and private payers in the US, and the feedback from the CF community continues to be very positive. Importantly, patients across the US have broad access to the medicine through public and private insurance, and we have assistance programs in place for eligible patients who need additional help. All major commercial insurers and all 50 state Medicaid programs are currently covering ORKAMBI, reflecting the important advance and value this medicine represents in the treatment of CF.

We're now moving forward toward bringing ORKAMBI to younger patients. And at the end of March, we submitted a supplemental new drug application to the FDA requesting approval for ORKAMBI for children ages 6 to 11 with two copies of the F508del mutation. We requested priority review, which if granted, would provide us with a decision on the application in the second half of this year. If approved, approximately 2,400 additional patients in the US would be eligible for treatment.

Outside the US, we have commenced discussions with reimbursement agencies in various European and other countries. Given the clinical benefits of ORKAMBI and the severity of the disease for people with two copies of the F508del mutation, we believe that we will achieve reimbursement from key European and other government payers, just as we've seen in the US. ORKAMBI is already commercially available in Germany, and through early access programs in France.

In the near term, the progress on our understanding of treating eligible patients with ORKAMBI gives us clarity on a revenue expectation for 2016. Later in the call, Stuart and Ian will talk about the ORKAMBI launch in detail, our guidance, and how we think about revenue trends from 2015, and growth into 2016 and further into the future.

For KALYDECO, we're increasing our revenue guidance for 2016, which Stuart will discuss in his remarks. As we think about the future opportunities for ORKAMBI and KALYDECO, I want to emphasize that revenue growth in 2016 and beyond, is largely a function of additional patients who are currently eligible for ORKAMBI or KALYDECO initiating treatment with these medicines. On that basis alone, we believe there is significant growth ahead for both medicines.

Consider that today ORKAMBI and KALYDECO are approved for approximately 27,000 people worldwide, but we're only currently treating approximately one-third of these patients. As we see additional uptake of ORKAMBI in the US, and achieve reimbursement for eligible patients outside the US, growth will continue as additional patients continue to initiate treatment.

In addition, there are many more patients not currently eligible for treatment who may benefit from either ORKAMBI or KALYDECO. In total, we believe there are approximately 44,000 people, an additional 17,000 people beyond those eligible today, who could benefit from one of these two medicines.

This additional group of patients is largely comprised of the following. First, approximately 12,000 people less than 12 years of age who have two copies of the F508del mutation, and who may be helped by ORKAMBI. And second, approximately 5,000 patients who may be helped by KALYDECO, comprised mostly of patients who have residual function mutation.

Treating a substantial portion of this additional group of 17,000 patients would further drive ORKAMBI and KALYDECO growth, if we obtain future approvals for these additional groups of patients. We have ongoing studies, regulatory submissions and development plans to support these efforts, including ongoing discussions with the FDA regarding our application for approval of KALYDECO in approximately 1,500 people ages 2 and older, with one of 23 residual function mutations, as well as our recent SNDA submission to the FDA for approval of ORKAMBI in children ages 6 to 11 with two copies of the F508del mutation.

While we are focused on getting ORKAMBI and KALYDECO to as many patients as possible, as soon as possible, we also recognize that there are many patients who are still waiting for treatment for the underlying cause of their disease. We hear from these patients often. So I'm particularly pleased to report that our CF pipeline is advancing. This gives us great confidence that we will ultimately be able to treat the vast majority of people with CF, and potentially enhance the benefit for those people currently taking our approved medicines.

I'll start with VX-661, which could play an important role in the treatment of people with CF, and is currently in Phase 3 development. In combination with ivacaftor, our Phase 2 data suggested that VX-661 may have an improved benefit risk profile compared to ORKAMBI in people with two copies of the F508del mutation, and may provide enhanced clinical benefits over ivacaftor monotherapy for other patients with gating mutations. We are on track to obtain the first data from the ongoing Phase 3 program for VX-661 in early 2017 from the study in people with two copies of the F508del mutation.

Additionally, VX-661 is positioned to play a key role in the development of a triple combination with a next generation corrector and ivacaftor. We believe that this triple combination approach will be fundamental for two reasons. First, triple combinations may allow us to treat a very large group of patients who are not helped today by either ORKAMBI or KALYDECO, including those with one F508del mutation, and a second mutation that causes minimal CFTR function. And second, these regimens could provide even greater benefit to patients currently eligible for our approved medicines who have at least one F508del mutation.

Today, we have two next gen correctors in clinical development, VX-152 and VX-440. These potential medicines are currently being evaluated in Phase 1 studies in healthy volunteers. Successful completion of these studies would enable us to move rapidly into Phase 2 studies in the second half of 2016 to evaluate one or more next generation correctors with VX-661 and ivacaftor in people with CF.

I'll now turn to our pipeline of other potential CF medicines that could be complementary to our portfolio of CFTR modulators, and it may enable us to treat more patients and provide greater clinical benefit in the years to come. The most advanced example of this is our lead ENaC inhibitor, VX-371. Today, we announced data from a Phase 2 14-day study of VX-371 in 142 people with CF who are not receiving ORKAMBI or KALYDECO. The study met its primary end point of safety, 96% of the patients who enrolled in the study completed all treatment, and the treatment regimens consisting of VX-371 were generally well-tolerated. There were no statistically significant changes from baseline in FEV-1 for those patients who received the VX-371, compared to placebo.

The data announced today are consistent with our in vitro data that did not show a meaningful change in cilia beat frequency, when VX-371 was used alone in human bronchial epithelial cells with two copies of the F508del mutation. In contrast, these in vitro data did show a meaningful change of cilia beat frequency when VX-371 was used in combination with ORKAMBI. Together, the in vitro and clinical safety data generated to date provide further support for our ongoing study of VX-371 in combination with ORKAMBI.

This ongoing study began enrolling people with two copies of the F508del mutation ages 12 and older in the first quarter of this year. And the primary end points are safety and mean absolute change from baseline in lung function at day 28 of treatment, as compared to placebo. Additional information on these studies can be found in our first quarter press release issued today.

Additionally, last year we entered into a collaboration with CRISPR Therapeutics, with a longer-term goal of discovering gene editing approaches for the treatment of genetic diseases, including CF. The use of this technology in people with CF may be many years away, but it is strategically important as we think about future advances that could fundamentally change the treatment of this disease in the years to come.

Tonight, I've summarized how we think about our opportunity in CF, an opportunity that is unique, both in terms of the potential benefit that ORKAMBI and KALYDECO provide to people with CF today, and also for the long-term potential of our development stage medicines to treat the vast majority of people with CF in the future. In conclusion, I'll make just a few comments about the type of company we will become as we achieve the success in CF that I have just outlined.

Vertex is on a path toward sustained earnings and revenue growth, driven by increasing number of people being treated with KALYDECO and ORKAMBI. We believe our business model, one focused on significant investment to create value through innovation, research and development positions us to consistently discover and deliver transformative new medicines for patients, and to reinvest in scientific opportunities to create future medicines.

With that, I'll turn the call over to Stuart to make more specific comments on the ORKAMBI launch.

Thanks, Jeff, and hello, everyone. Tonight I will review our progress with the launch of ORKAMBI, the basis of our 2016 guidance for ORKAMBI product revenues, and our ongoing efforts to obtain reimbursement outside the US to drive further growth of ORKAMBI in 2017 and beyond.

We are now just over nine months into the launch, and we are pleased that approximately 65% of eligible patients in the US have initiated treatment with ORKAMBI to date. Global sales of ORKAMBI in the first quarter were $223 million, comprised of US sales of approximately $214 million and ex-US sales of approximately $9 million, which were mainly from Germany.

At the beginning of the year, our intention was to provide financial guidance for 2016 ORKAMBI revenues, once we had gained sufficient understanding of the dynamics of the launch in the US. Today, we have a deeper understanding of how doctors and their patients are using the medicine, based on the real world treatment patterns we've observed in more than 4,500 patients who initiated treatment in the US in 2015.

I'll now share with you our understanding of the launch dynamics that informed our guidance. First, uptake, defined as the total proportion of the 8,500 eligible patients in the US who will begin treatment with ORKAMBI by the end of 2016, and also the rate at which these patients initiate treatment. Second, the persistence rate, defined as the proportion of patients who start and remain on treatment. And third, the compliance rate, which reflects the number of pills actually taken by a patient in a given month.

First, to uptake, to date approximately 65% of the 8,500 eligible patients in the US have initiated treatment with ORKAMBI, comprised of more than 3,000 patients who initiated treatment in the third quarter of 2015, more than 1,500 in the fourth quarter, and approximately 800 in the first quarter of 2016. We have seen further initiations in April, and expect that patient initiations will continue throughout 2016, albeit the lower rate than in the first three quarters post-launch. We continue to expect the vast majority of the eligible patients ages 12 and older in the US will initiate treatment with ORKAMBI by the end of this year.

Second, persistence. Among patients who have initiated ORKAMBI since launch, we've seen that approximately 15% of patients discontinue treatment within three months of starting treatment. Our clinical trial and market research data indicate that these discontinuations are largely related to respiratory adverse events. After the first three months of treatment, the discontinuation rate then slows considerably.

Based on what we've observed to date, from all patients taking ORKAMBI, including those who have been on commercial drug for up to nine months, and those who continue to receive ORKAMBI as part of our Phase 3 long-term extension study, we expect that the proportion of all patients who initiate and remain on treatment will stabilize at approximately 70% to 80%.

It is also important to point out that the pattern of patient initiations and discontinuations had an offsetting effect on our first quarter ORKAMBI revenues. Specifically, because more than 4,500 patients began treatment of ORKAMBI in 2015, the impact of approximately 15% of these patients discontinuing ORKAMBI was highly evident in the first quarter.

Therefore, while approximately 800 new patients initiated treatment in the first quarter, this growth was largely offset by the bolus of patients who discontinued treatment. This bolus of discontinuations began in the fourth quarter, but had a larger impact on the first quarter of 2016, where there were also fewer patient initiations to offset these discontinuations.

And finally, compliance. Based on what we have observed to date from the launch, we expect the compliance rate with ORKAMBI to be between 70% and 80%.

In summary, based on our understanding of the launch dynamics for ORKAMBI, and the fact that we have continued to see additional patients initiating treatment with ORKAMBI in April, we expect to deliver quarter-to-quarter revenue growth for ORKAMBI beginning in the second quarter, and continuing through the end of 2016 and into 2017.

I will now turn to the use of ORKAMBI to date outside the US. We are now well into the reimbursement process in all key European countries, Canada and Australia, specifically the clinical and cost effectiveness assessment portions of the reimbursement process. These discussions are going as expected, and have been productive.

We believe that government payers across Europe recognize both the severity of this disease and the broad clinical benefits of ORKAMBI. These discussions will take time to complete. However, as Jeff mentioned earlier, we believe that we will achieve broad reimbursement from key European and other government payers, just as we've seen in the United States.

ORKAMBI is already available commercially in Germany, and through early access programs in France. We are only three months into the launch of ORKAMBI in Germany, and the uptake has been slower than we observed in the US. We attribute this to a number of factors, including that CF care in Germany is not concentrated in large centers as is seen in other countries, meaning there are many smaller centers, and also many centers and physicians who have not yet had personal experience with CFTR modulators.

In Germany, there are approximately 2,500 patients eligible for treatment. As of March 31, 2016, approximately 230 patients had initiated treatment. However, we expect the number of patients initiating treatment in Germany will grow through 2016 and into 2017.

We do not expect what we are seeing in Germany will be representative of the uptake in other European countries. In fact, in France, where early access programs provide the opportunity for physicians to begin treating patients with ORKAMBI prior to formal reimbursement approval, we have already seen approximately 400 of the 1,500 eligible patients initiate treatment with ORKAMBI in 2016.

We took all of this information into account when we set 2016 revenue guidance for ORKAMBI of $1.0 billion to $1.1 billion. Our guidance reflects our understanding of the ongoing US launch as I just discussed, as well as expectations that we will receive both approval for ORKAMBI in the US for patients ages 6 to 11 in the second half of 2016, and certain revenues from sales of ORKAMBI outside the US, primarily from Germany. Taking a longer-term view, we expect significant further growth for ORKAMBI revenues in 2017, driven primarily by patients initiating treatment following the completion of reimbursement discussions outside the US.

And now, to KALYDECO, today we are increasing our financial guidance for 2016 revenues. We now expect KALYDECO net revenues of $685 million to $705 million. The prior guidance provided on January 10, 2016 was for KALYDECO net revenues of $670 million to $690 million.

We increased our KALYDECO guidance based primarily on increasing number of patients initiating treatment with KALYDECO globally, and on expectations of a reduced impact this year from the VX-661 Phase 3 program. Our guidance for KALYDECO excludes any potential revenues from the approval of KALYDECO for people with residual function mutations. I'll now hand the call over to Ian.

Thank you, Stuart, and good evening to everyone. With the closing of the first quarter of 2016, and nine months into the launch of ORKAMBI, we are seeing significant progress across our business. Notably, we are seeing increasing number of patients being treated with our approved medicines, resulting in a growing revenue base that we expect to drive earnings growth.

I will now review our first quarter financial results, and provide some specific comments about the long-term financial trajectory of our business. Financial results first.

In the first quarter of 2016, we reported total CF product revenues of approximately $394 million, a significant increase compared to $130 million in the first quarter 2015. With ORKAMBI, we reported sales of $223 million for the first quarter 2016. We have recorded approximately $[574] million of ORKAMBI revenues in the first nine months since the US launch in July 2015. The first quarter KALYDECO sales of $171 million were up $41 million versus the first quarter of last year.

Now to the operating expenses. Our first quarter non-GAAP operating expenses were $306 million, compared to non-GAAP operating expenses of $246 million for 2015. The increased operating expenses were primarily due to increased costs related to the progression of our CF pipeline, and to increased investment in global commercial support for the launch of ORKAMBI. Our non-GAAP net profit for the first quarter 2016 was $22 million, or $0.09 per diluted share, compared to a non-GAAP net loss of $148 million, or $0.62 per share for 2015.

From a balance sheet perspective, we ended the first quarter with approximately $1.03 billion in cash, cash equivalents and marketable securities. Vertex also has $300 million outstanding from a credit agreement repayable by the end of the third quarter of 2017. The agreement also allows for the facility to increase to $500 million.

Now to financial trends. Stuart provided 2016 ORKAMBI and KALYDECO revenue guidance and the assumptions that drive our projections, and therefore, I will focus my comments on the longer-term growth opportunities that may come with treating more patients with our currently approved medicines.

We expect ORKAMBI revenues will continue to grow as we treat more patients in the US, achieve reimbursement outside the US, and expand the ORKAMBI label to younger patients. KALYDECO's growth is based on gaining reimbursement for certain groups of patients outside the US, including those with R117H mutation, and the people ages 2 to 5 with gating mutations.

In summary, as Jeff noted earlier, approximately 27,000 people are eligible for our CF medicines, yet we are only treating approximately one-third of these patients. As additional patients in the US start treatment, and we complete reimbursement discussions outside the US, we expect the number of patients treated with our medicines to increase significantly, and we expect revenue growth will follow.

I will note that in 2015, we reported total CF revenues of $983 million. Based on 2016 guidance provided for ORKAMBI and KALYDECO, we anticipate the total CF revenues of approximately $1.7 billion to $1.8 billion, an approximate 75% increase over the prior year. As our revenues grow over future years, we are committed to managing our operating expenses to drive earnings growth, and we expect to deliver a financial profile as similar to many of our large cap biotech peers. With that, I open the line to questions.

(Operator Instructions)

And our first question comes from the line of Michael Yee of RBC Capital Markets. Your line is now open.

Hi, good afternoon. Thanks for all the details. I really appreciate it, think it's very helpful for everyone.

A two-part question. One is, you gave all of these discontinuation and persistence rates and compliance rates, which is in your guidance.

Is there anything out there that you can do, to either improve these things, education, getting people to -- just get patients to take more drug, and can you apply any of this learnings to Europe? Are you seeing the same stuff in Germany? Are there any ways to improve it there?

And then the second question, is a pipeline question on the 661 Het-min. You mentioned in the press release that you're changing the enrollment to do 200, instead of 300. But is that assuming you actually passed the futility? Can you just clarify that a little bit? I guess, why are we talking about changing the enrollment, if we haven't passed the futility?

Thanks.

Hey, Mike, it's Stuart here.

I'll take the first part of your question around the discontinuation and compliance rates. And then I'll have Jeff Chodakewitz to answer the pipeline question. So on discontinuation and compliance, and what we might be able to do to improve those: much as we did with KALYDECO, we will be continuing to generate data on the long-term benefits and even broader benefits of ORKAMBI when used in the real world. And I suspect that data, if it's compelling may lead physicians and patients to reconsider restarting ORKAMBI. So we'll continue to develop the overall clinical profile of ORKAMBI as we have more experience in the market.

In terms of compliance, really many of the same things that we did with KALYDECO, we'll be doing with ORKAMBI. And that's really providing both providers and physicians with the educational materials to be able to understand how this is a product, which is treating the underlying cause of their disease. And so, is a product that they would want to try and stay compliant with as much as they possibly can. And we'll certainly be leveraging all the learnings we've had from KALYDECO with ORKAMBI and those programs are already in place.

And lastly, to your point about, to Germany, clearly one of the things we're going to be doing, is transferring all of the learnings from our launch experience in the US to all of the other markets that we're launching into. And that's in many ways, the benefits of those markets coming on stream a little bit later, is they can learn from our experiences here in the US.

With that, I'll hand it over to Jeff to have him answer the question on the pipeline.

Hi, Mike. It's Jeff.

Maybe just to clarify, we did provide some information about the timing of the interim analysis in the Het-min study, but there's been no other changes for that trial. The change in sample size comes from one of our other Phase 3 trials, looking at 661 ivacaftor in patients who have more of a residual function mutation on one of their alleles. We did look at that, and saw that there was some opportunity to maintain good power, but simplified and reduced the sample size. And that's what that was about.

Okay. So still the Het-min interim in Q3; no change to that. Okay.

That's the interim, that's correct.

Thank you. And our next question comes from the line of Terence Flynn of Goldman Sachs. Your line is now open.

Hi. Thanks for taking the questions. Maybe just a follow-up on the discontinuation rate. I know you mentioned it's mainly due to respiratory events, but the 15% I think over three months is significantly higher than what you saw in the trials. I know you mentioned previously it could be higher.

But any more color there on the drivers behind that, that you can expand on a little bit? And then on the ORKAMBI guidance, just wondering if you can provide a little bit more clarity there on the contributions from US rest of world, and then the patients 6 to 11 in terms of relative contribution?

Thank you.

Sure, Terence.

So on the respiratory events, I think what I would say there is, now what we're reporting today, is what we're seeing in the real world usage of ORKAMBI in the broad population. Obviously, the clinical trial population that we studied in traffic and transport is a very controlled situation. That was patients with an FEV1 between 40 and 90.

So really whilst, we tried to extrapolate from the clinical trial experience, the real world experience, that's one of the reasons -- that uncertainty is one of the reasons why we wanted to make sure we had sufficient time in market before we gave guidance, was because we really wanted to see how the product would get used in the real world.

In terms of the contribution of the various different parts of the world to our ORKAMBI revenue guidance, as you might expect, the vast majority of these revenues is going to come from here in the US. There will be a contribution ex-US, but it's going to be relatively small. And then, incorporated within our guidance, as we said, is also an expectation that we will see an approval in 6 to 11 year-olds in the latter part of 2016, which would give us access to an eligible population of about 2.5 thousand. And that's also incorporated within our guidance. But that approval is not anticipated until the back end of 2016.

Thank you. And our next question comes from the line of Geoff Meacham of Barclays. Your line is now open.

Hello. Thanks for taking the question. I got a couple.

I'm trying to get a sense, as to when you realized that compliance or persistent or discons were different for ORKAMBI versus KALYDECO, or commercial ORKAMBI versus Phase 3? You had a chance, 3Q call, JPM, 4Q call to be crystal clear on this. And it's 10 months almost into the launch, and now we're getting some detail.

I just have a couple follow-ups.

So Geoff, thanks for the question. Let's see, so I just want to take us back a few months. Which as we went into JPMorgan, and also year end conference call at the end of January, we were very clear, with what we wanted to do regarding the ORKAMBI guidance. For us at that point in time, it was early in the launch.

Yes, we had recruited a number of patients onto ORKAMBI, but it was still early in the launch to understand treatment patterns. We stated that very clearly.

What we've been able to do now, as we sit here, as you point out just over nine months into the launch, we've been able to take a significant bolus of patients. For example, 3,000 patients that initiated in the first three months of, since approval. And we've been able to track those six to nine months.

What that allowed us to do was to understand the compliance rates, helped us to understand discontinuation rates, and also the pattern of discontinuation. As Stuart mentioned, that's been an important feature for us. So this was the -- we feel as though we're in this position at this point in time, where we've been able to track a substantial amount of patients over a good period of time, to have the confidence to provide guidance for 2016.

The comparison to KALYDECO was less relevant, for us, it was more about the treatment patterns for ORKAMBI. ORKAMBI is a different medicine than KALYDECO, based on its clinical data and the patient population. But we now have enough confidence to provide you with the ORKAMBI guidance.

Okay.

And just a follow up to some earlier questions; to ask it a different way, for patients that are at low FEV1 at baseline and do experience bronchoconstriction, is there a treatment protocol in place? I mean, we've obviously heard of things like half dose, then up titrate, or dose skipping. Is there something that you can recommend to pulmonologists, a strategy for those that do experience the bronchoconstriction?

Thank you.

Geoff, it's Jeff Chodakewitz, maybe just to give you a couple of comments about that. We don't have anything, in terms of very concrete specific guidance that we can give you, but we can make a couple of observations. First of all, what's clear from speaking to our investigators, and also to physicians in the field, that clearly the support for the patients, both setting expectations for the patient, and for the physician, and helping patients in those early weeks manage any symptoms, we think is very important. And something that goes back to some of the education questions that we've heard about earlier.

We are also collecting information in our own study for patients whose FEV1s were less than 40, and we're in the process of summarizing that. We did in that study, give patients the option to start on a lower dose, and we'll get that data together and summarize it.

But it's not going to be the kind of data that says, here's a specific recommendation. We know that that is being used. But it's really still about physicians, and their patients working together to manage.

Okay, thanks.

Thank you. And our next question comes from the line of Mark Schoenebaum of Evercore. Your line is now open.

Hello. I really appreciate you taking the question on the call.

Number one, I would just like to know, have you been surprised by the way the launch has unfolded? I'm sure you had some projections a year ago for persistence, [sully things] and have you been surprised?

Number two, I know you can't comment specifically on peak numbers, but the sell side consensus is around $4 billion at peak for ORKAMBI. I'm just wondering, can you just talk about that? And then finally, is there any opportunity for re-initiation in these patients that dropped out early?

Thank you very much.

We have a list of questions there. So if we don't get to all of them, please (multiple speakers)

Sorry about that.

Yes, so we're all scribbling them down. But if we don't get to them, please say them again.

So Mark, in terms of how we feel about the launch, I'd say we're very pleased with the way the launch has progressed here in the US. So from how we were able to work with payers, to get access and reimbursement from ORKAMBI from early on in the launch, to the rate of uptake that we've seen. I mean, to get close to 65% of eligible patients initiated within the first nine months is a fairly steep ramp, and so one we're pleased with.

So I think overall, we're pleased, and the launch has played out much as we anticipated. In terms of the potential for re-initiations, we have heard anecdotally from physicians that they have tried re-initiating patients on ORKAMBI. We don't have much in the way of clinical data to be able to support that, but we are certainly aware that there are physicians who've done that successfully before for some of their patients. So that certainly is something that we'll continue to watch in the marketplace.

Mark, this is Jeff Leiden. Maybe I just add a little bit more of a 10,000-foot view, on both KALYDECO and ORKAMBI. Like you, I have been involved with many, many drug launches, and I think it's worth just putting those in perspective.

From the standpoint, as an example in ORKAMBI of getting to 65% of the patients in nine months, and of course, with KALYDECO, it was close to 90%. That's a fairly unusually fast ramp. And from the standpoint of persistence, the kinds of numbers Stuart's talking about, lets say, 70% to 80% is the number that we settled out at, is still a very, very high number compared to most chronic medicines. And we believe that really represents the correct perception that both physicians and patients have about the value of these medicines, in treating the underlying cause of the disease for a long period of time.

And that really underlies our thinking about the pipeline as well, because as we develop this next set of medicines, including next gens, and [poclios] and [what we] things like CRISPR, we're talking about progressively increasing the benefit/risk profile of our portfolio of drugs that these patients can take. And that only, of course, will increase both persistence and compliance rates. So overall, very pleased with where we are. We know we have more work to do to get to more patients and improve therapy. But these two drugs have really performed quite well so far.

Thanks, Jeff.

Thank you. And our next question comes from the line of Geoffrey Porges of Leerink Partners. Please go ahead.

Thanks very much. Just a few questions. First, could you help us out? Just give us the breakdown between US and ex-US sales of KALYDECO, so we're all on the same page?

And then, I want to go back to Jeff's comments. And Jeff, could you really clarify this residual function change, and what has altered in terms of your statistical analysis, or your assumptions about the activity of the drug, or the combination? And give us a sense of what the hurdle there is for ORKAMBI's effect?

And then lastly, on this issue of persistence, is it reasonable to assume that about 50% of patients of the eligible pool are on drug right now? Because we keep going round and round about initiations and discontinuations. But surely what's important is the number of patients who remain on drug at the end of the quarter, and is 50% roughly the right number? Or perhaps slightly below that 45% to 50% of the eligibles? Is that the right way to think about it?

Thanks.

So Jeff, it's Stuart here.

I'll take your first question around KALYDECO revenues, and then I'll hand it over to Jeff Chodakewitz. So within the total KALYDECO revenues of $171 million for the first quarter of 2016, $95 million of that was in the US, and the balance of that $76 million, was in international.

Thank you.

And Jeff, in terms of the residual function study, we really stepped back and said, is there an opportunity to reduce the end of the study somewhat, without sacrificing the integrity of the trial? And we really looked at that two ways, that we saw opportunity. One is that we've really focused our statistical analyses on key parameters, and that really allows us to take care of that. The other thing is that we also looked at the line to data, and saw that the discontinuation rate from the trial was actually lower than what we had left room for, and that also was an opportunity to reduce the end.

Great. Thanks very much.

And finally, Jeff, to your question on ORKAMBI, your back of envelope math is approximately right at the end of the third quarter. You're right, about 50% of the eligible population were on.

Clearly, that's a moving target, because it's a mix of the discontinuations and the initiation. The important thing I would add to that number is, that moving forward in Q2 and beyond, we do expect patient initiations, which we've continued to see in April in the US. And obviously we continue to see internationally in places like Germany, we expect to outpace discontinuations, which is why we are predicting quarter on quarter growth for the remainder of 2016 and beyond.

Great. Thanks very much.

Thank you. And our next question comes from the line of Brian Abrahams of Jefferies. Your line is now open.

Hello. Thanks very much for all the granularity, and I appreciate you taking my question. My first question is I'm wondering if you're seeing any trends towards maybe less sick higher FEV1 patients going onto therapy over time, which could -- with ORKAMBI, which would theoretically improve persistence and compliance?

And then on 661, if 661 looks better tolerated, but perhaps less efficacious than lumacaftor? I'm just wondering how you weigh which potential backbone to combine with the next generation corrector into a triple combo?

Thanks.

In terms of trends of any trends to where the product is being used, in either sicker patients or less sick patients, to be honest with you, Brian, with 65% of eligible patients being initiated, it is being used across the board. Obviously, we've got a range of different physicians and centers here.

Some started using it in their more severe patients. Others started using it in their less severe patients, but we are really seeing usage across the whole range of FEV1s of patients, as you would imagine with 65% of eligible patients having been initiated. And on the backbone, for the triple combination, I'll pass that over to Jeff Leiden.

Yes, just on the triple combination, obviously, we can't speculate there, exactly what will happen, but I would remind you there were a number of reasons that 661 is the preferable partner. Most of those have to do with drug-drug interactions and making it simpler to combine it into a triple regimen.

So what I would say is, all things being equal, if 661 and lumacaftor had equal efficacy in combination with KALYDECO, we're certainly going to go with 661, because of those pharmacokinetic properties. Did that answer the question?

Yes. Well, not exactly.

I was wondering whether -- I mean, we know 661 has less CYP3A4 interactions. I was wondering whether some of the real world ORKAMBI side effects that you're seeing, are perhaps driven, by not only the respiratory AEs, but driven by CYP3A4, which we know is going to look better with 661 and how you weigh that, if efficacy is perhaps not as good?

Yes, that's not the reason, just to be clear. So those AEs, are not driven by CYP interactions. We feel they are driven, as we said before, by off-target bronchoconstriction. It's unique to lumacaftor. We don't see or haven't seen with 661.

Thanks.

Thank you. Our next question comes from the line of Adam Walsh of Stifel. Your line is now open.

Hey, thanks for taking my question.

A few weeks ago, we published a 47-physician ORKAMBI survey, and a few things jumped out at us. I want to bounce them off of you. Most notably, our survey showed that if patients discontinue ORKAMBI due to drug-related side effects, 70% of doctors encouraged these patients to restart the drug. And then, a very meaningful percentage of those patients, not only successfully restart the drug, but also subsequently remain on the drug long-term.

So my questions are, is this consistent with your own internal research? Are patient restarts factored into your guidance? And if so, to what extent? Thank you.

So Adam, it's Stuart here. Thanks for the question.

In terms of restarts, yes, your survey is consistent with what we've heard, in that we have heard from physicians that they are trying to restart ORKAMBI in some of their patients who they have, previously had to discontinue the product in, largely because, as you know, they are often firm believers that treating the underlying cause of the disease is clearly a good thing for those patients, if they can tolerate the medicine.

In terms of the absolute volume of that, at the minute that's hard to quantify. We've certainly heard it anecdotally. We've certainly heard success stories.

It's fair to say, though, that within our guidance we've assumed a relatively minimal impact from restarts, because at this time, we really don't have evidence that it's happening in quite the numbers that perhaps people have said that they might do it in. So at the moment, within our guidance, a relatively minimal amount of restarting patients is assumed to happen in 2016 here in the US.

Understood. Thank you.

Thank you. Our next question comes from the line of Phil Nadeau of Cowen and Company. Your line is now open.

Good afternoon. Thanks for taking my questions.

Two on commercial, then a quick one on the pipeline. On the commercial, can you give us a sense of how many lives outside of the US could gain reimbursement for ORKAMBI in 2017? I'm sure you have internal estimates and ranges. I'm curious what those are?

And then, similarly in the younger kids, do you expect any different penetration of ORKAMBI into that population than you've seen in the older kids and adults? Then last, on the triple, can you let us know if you've combined all three drugs in healthy volunteers yet? And what your disclosure strategy will be when you move into Phase 2? How much data from the Phase I will we get?

Thanks.

So Phil, it's Stuart here. I'll take those two first commercial questions.

In terms of the number of lives that might be eligible, so the number of patients with the F508del homozygous mutation 12 and above in Europe is somewhere around 12,000. Within our 2016 guidance, the only country that we're assuming we're going be able to recognize revenues for is in Germany.

We're not in a position to be able to give 2017 guidance at this point. And trying to predict exactly when these reimbursement discussion is going to conclude is frankly, impossible to do, because clearly, it's a negotiation and the vast majority of countries don't have a formal time clock. And so, at this point, we're really not in a position to be able to speculate on when those might be concluded.

In terms of what we would be anticipating in the 6 to 11-year-old population? If we are successful in gaining approval for that here in the US, then our anticipation would be much as we've seen with KALYDECO, that the uptake there is likely to be similarly robust as we have seen in adults. Although I would remind you, that from a 2016 perspective, that's likely to come in the second half, or in the second half of the second half of 2016.

And Phil, I'll take the last question. So the Phase I study in healthy volunteers is still ongoing, so we can't make a comment on that. But as terms of disclosure and time line, still as we've discussed before, we expect to be in patients with triple combination in the second half of the year.

The disclosure, if I wrap up the Phase I around that, will be relevant information that supports the Phase 2 study design. At this point, that is too difficult to describe. And we'll let you know when we have that information, and we're initiating the Phase 2 study.

Great. Thanks for taking my questions.

Our next question comes from the line of Cory Kasimov of JPMorgan.

Hey, good afternoon. Thanks for taking the questions. I have two left for you.

So realize it's early, but wanted to ask about the potential of payer reauthorizations on ORKAMBI? How common is it, and how does it compare with the process you saw with KALYDECO?

And then, a capital allocation question for you. Now that you're profitable and growing and you're sitting on $1 billion in cash on your balance sheet, at what point would you consider buying back some of your stock?

Thanks.

So Cory, on the payer reauthorizations, not all payers have published policies that include their reauthorization criteria. So that's the first thing I'd say. Of the ones you have, most have a time clock of 6 to 12 months. So we're really only now beginning to get to the point of, patients getting to the time point when they are having to go through the reauthorization process.

Having said that, so the payers that have published policies or where their reauthorization criteria are known, the vast majority of them are either in line with the label, or reflect the systemic benefits of ORKAMBI. And by that, I mean they recognize that this product can have benefits across multiple end points, and either improvements or stabilization in those end points qualifies as a successful outcome. So whilst we are only now beginning to get into the period of seeing those reauthorizations, I feel good about the reauthorization criteria that we've seen to date. And to the last part of your question, they are not dissimilar at all to what we saw with KALYDECO.

And to the last question, we have thought about stock buybacks in terms of capital allocation. But as we think about the priority of capital allocation for our business, I'll just give you a broader thought, which is we're still in this transitional period of moving into profitability and cash generation, and watching the revenue curve.

As we go up the revenue curve, and we drive revenue growth and therefore earnings growth, which translates to more cash generation, we look to apply that capital to reinvest back in the business first, first internally into our pipeline.

But then potentially outside of the Company to diversify and expand our pipeline. And we've already done activities in that area, as you know, with CRISPR and our ENaC inhibitor. So those continue to be the priorities. It's the internal investment, it's the external investment.

As we go up that revenue growth curve, and have greater capital to allocate, we will give consideration to capital strategies, such as share buybacks. But at this point in time, it's a little early for us. And if we were to move into something in the near future, it would be of a smaller scale to stop the shares outstanding creep that occurs each year through option exercises.

All right. Thanks. Appreciate it.

Thank you. Our next question comes from the line of Alethia Young of Credit Suisse.

Hello. Thanks for taking my question. The three of them are around compliance. And I guess, when we looked at the math, we did over the quarters, it seemed like the first two quarters, the compliance was potentially higher, like 95%. And maybe in this quarter, based on our math, it would have gotten to about 80%. So one, is that analysis fair? Two, can you give us any color on, if the scripts are written in one or three-month increments?

And then, third, when you think about 70% to 80% range on compliance, which actually does move the model quite a bit, what qualitatively, do you think about that kind of gets you in the 70% range versus the 80% range? Should we think about like, amount of days that are people are taking? So there's a delta in the days they miss, and kind of adding that up and thinking about it? Or is there some other way, we should think about quantifying compliance?

Thanks.

So let me try, and answer those sequentially.

In terms of the compliance trend, compliance is the metric that you need the longest period of time to measure, because clearly, this is a chronic medicine. And so, in the first prescription they get, your assumption is you're 100% compliant, and you have to wait until they get the second prescription to work out exactly what it is. So this is the one that really takes the longest period of time for us to get a good handle on.

I don't know obviously, the intricacies of your model. I'll just reiterate that we are, based on the trends that we've seen to date, and the experience we've got with the patients who have been treated to date, our expectation for the year, and the assumption on which our guidance is built, is that it will be somewhere between 70% and 80% for ORKAMBI this year.

In terms of the one- or three-month script, the vast majority are written for one month. There are some three month prescriptions written, but the vast majority of prescriptions are written for -- on a monthly basis.

And in terms of qualitatively, what would lead you to one end versus the other? To me this is all about education, and our ability to help providers to give to their patients information which educates them on the nature of the disease, the underlying defect, the fact that ORKAMBI is designed to treat those underlying defects. And to the extent they believe in the science, believe in the long-term benefits that ORKAMBI could provide to them, then I think that's only likely to lead for patients having a higher compliance rate.

We're very focused on that. We're certainly taking all the learnings we can from our experience from KALYDECO, to support patients to take their prescriptions in line with their physician's recommendations.

Thanks.

Thank you. Our next question comes from the line of Matthew Harrison of Morgan Stanley. Your line is now open.

Great. Thanks for taking the question. I had two, which are somewhat follow-ups on Phil's question.

Just on next generation correctors and those studies, can you just tell us if you saw a safety event, what kind of safety event would be disclosable, versus not disclosable? And then, there is a point in time that we're going to see PK data from healthy volunteers, which might help us better understand how the drug levels that we saw on HB data might compare in patients?

And then, a separate commercial question, just in the 6 to 12 pool for ORKAMBI, are your assumptions for persistence and discontinuation rate, the same as what you're seeing now in the older population? And if they are not the same, can you just explain why? Thanks.

So maybe I'll take the first couple of questions.

So with the next-gen disclosure, what would be require disclosure, it's reg FD. And if there was a material adverse event, we would have to disclose that. If you wanted me to give you an example, that would be a discontinuation of the trial, for example, and we would have to disclose that.

Other than that, it's an ongoing trial. We need to complete the trial, gather the data. That will inform us, as I said earlier, for the Phase 2 trial in patients with triple combination. And we will provide relevant information at that point in time, that supports the design of that trial.

Can you just remind me of your second question? Disclosures? Is that -- (multiple speakers)

I was just wondering, will we see PK data, so that we can compare the drug levels that you can achieve in healthy volunteers, versus the drug levels that you were achieving in the HB] assay, so we have some sort of comparison on relative drug levels?

So we'll provide you the relative information that helps you understand the design of the Phase 2 study. However, it is not our practice to provide that kind of detail on a Phase I study, and there's a number of reasons for that. And I would just give you one, that there is a specific competitive reason that would, we would prefer not to provide that information on a Phase 1 study.

And Matt, in the 6 to 11, I mean, really the contribution of the 6 to 11 population if we're successful in getting approval, as I said, it's really going to be in the, likely to be in the fourth quarter. So really the contribution there, within our overall guidance is more about uptake than it is around persistence and compliance. And much as we did with the 12 and above population, I think we'll obviously be watching that very, very closely, just as we have done since the launch in July.

And that will give us an ability to learn how the product performs with those patients in the real world. Again, one of the things we have seen with the younger population with KALYDECO, is they tend to be slightly more compliant than the average. Not surprisingly, because they have got a lot of parental and caregiver supervision.

But really, those assumptions that we've given you, are much really more related to the 12 and above population. But we'll see how the 6 to 11 patients play out in the real world, in the course of time after the approval.

Thank you. Our next question comes from the line of Ying Huang of Bank of America Merrill Lynch. Your line is now open.

Hello. Thanks for taking my questions. Number one, I want to know if you have seen an uptick in discontinuations due to lack of efficacy, or it's all due to the chest tightness? And then secondly, for the ATU pricing you get in France, how does that compared to the German pricing of EUR159,000 per year per patient?

And lastly, I have a question on your gross to net. Is that consistent with what you have guided before, which is like mid-teens in 1Q 2015?

Thank you.

So Ying, in terms of discontinuations, the -- based on our clinical trial experience, and also what we are seeing in the market, the vast majority of those discontinuations are for adverse events, and most commonly that's for chest tightness. In terms of the ATU, we haven't disclosed the price within the ATU program. And in terms of the gross to net, the gross to net that we've seen and are predicting is potentially slightly lower than we originally thought.

That's largely due to the fact that the Medicaid patient population that we're seeing is slightly lower than we anticipated. This is really as a result of many of those Medicaid patients that we thought would be covered by Medicaid are actually qualifying for disability benefit under Medicare. As a result of that, we're seeing a lower Medicaid population. And as a result, we're seeing, we're predicting a slightly lower gross to net of somewhere around 12% for the year.

Yes, I might just add to that Stuart, which is in the, coming into 2016 and 2015, where the gross to net on ORKAMBI was close to 7%. As we moved into the Q1 of 2016, it's increased to 9%. So it is moving up slightly, as we expected. But as we plan out, and we look at the patients that are coming onto drug, we anticipate that it could end the year around 12%, as it eventually creeps up to that 12% level. That's also placed into our guidance.

Thanks for the color.

Thank you. And our next question comes from the line of Liisa Bayko of JMP Securities. Your line is now open.

Hi. Just a couple technical questions. Were there any inventory changes in the quarter?

No. (laughter)

Okay.

The ORKAMBI inventory at the end of March was, to all intents and purposes, identical to that which it was at the end of January 31. So there was really no inventory change for ORKAMBI at all.

Okay, great. And then can you comment on gross to net: where were you for the quarter? And would that be relatively consistent for the rest of the year? Will it change in some way?

Are you referring to ORKAMBI, Liisa?

Yes. Sorry. Thank you.

Yes. So I actually just mentioned this, which is that in Q1 we were at approximately 9% gross to net discount.

Okay.

In Q4 of last year, we were at 7%. We actually expect the Q1 level of 9% to trend up, to be something closer to 12% by the end of the year.

Okay, great. That's helpful. Thank you.

And then when you say, 15% of 65% have discontinued, that's like a 10% discontinuation rate roughly? Is that the right way to think about that?

No, Liisa. So -- and it's really important, so thanks for asking the question. It is of the patients who have initiated, 15% of them have discontinued ORKAMBI within approximately the first three months. The -- and so if you think about 4,500 patients who initiated between July and December, 15% of those patients who would have discontinued within the first three months. And then that rate of discontinuations slows considerably.

The 65% is the number of patients who have initiated therapy by the end of March. So the 15%, you need to apply to all of the patients who initiated. It's -- you don't -- it's not 15% of 65% is 10%; it is 15% of the 65% who have initiated, they will discontinue therapy is our belief.

And Lisa--

Right, but that gets you 10%, doesn't it? If you multiply [65 by 15] -- ?

Liisa, we'll jump on the phone with you after the call, and we'll do the math.

All right. Okay Thank you.

And then I just had a question about the Rho inhibitor. Can you give us a little detail on that trial? What are the end points you're looking at, what is the timing for data?

And that's my final question. Thank you.

Hi, Liisa. It's Jeff.

So the Rho inhibitor trial is really specifically in patients who had a pretty catastrophic injury to their cervical spine, and really have very poor function immediately following that injury. In the study then, we follow those patients.

At the time of surgery, they have either placebo, or one of two doses of active drug. It's about 150 patients total. And then we follow them for six months, looking at particularly how their upper extremities function, because that's so important to how patients, the quality of life of patients. And then, we do some other measures of disability.

And it's very hard right now. We just started the study, as we've said. So I think it's very hard to predict in that kind of population, in particular, exactly when we're going to get results.

Thank you.

Operator, we have time for two more questions.

Thank you. Our next question comes from the line of Tony Butler of Guggenheim. Your line is now open.

Yes, thanks very much.

Briefly, Stuart, in France, again the early access patients which receive ORKAMBI, I think you mentioned 400, I understand reimbursement has not occurred. But given the uptake being fairly strong, if one assumes that the majority of that 1,500 will be treated by year end, and you do get reimbursement, let's say next year, does that come in a bolus payment for that which has occurred, or is that payment then amortized assuming those patients stay on drug for 2017 and beyond?

Thanks very much.

Yes, thanks for the question, Tony.

So the way the accounting works in France is that, for the cash that we get for those patients before we get reimbursed, those are recognized as cash, not as revenue. At the point that we have certainty about the selling price, or very close to certainty about the selling price in France, then we will be able to, in a one-term adjustment, convert that cash to revenues. And then, from that point forward, all of those will be counted as revenues going forward. That's because the, whatever rebate you agree with the French government is retroactive, to the sales that you've had from the point that you launched the product.

And that's helpful, thank you. And finally, you would call that out as an item in the quarter in which it occurs, I assume?

So maybe I'll follow on from Stuart. I'll just validate Stuart's answer as a CPA, so nice job, Stuart. (laughter)

In terms of revenue recognition, many of you that are on this call, probably have seen other companies go through this with the ATU in France. And then absolutely, at the point that we are, we get to a point where we're confident with the price in France, yes, we would call it out in the quarter specifically. And at that same point of time, we would recognize all the revenue in that very quarter.

Thank you.

Thank you.

And our final question comes from the line of Katherine Xu of William Blair. Your line is now open.

Hi, good evening. Thanks for squeezing me in.

So I just have one question on the CRISPR program. Based on the research that you have ongoing right now, what kind of mutations are the most amenable for the technology first? And how difficult is it to eventually correct those FFO8, which is a deletion. You have to add back the [space] there.

Yes, this is Jeff Leiden. Thanks for the question.

I think as you know, right -- if you look today, CRISPR is most amenable to actually inactivating treatment, making cleavages, because that's what it does most efficiently. And obviously, that's not what we would want to do in the delta 508 case. Then you move to making corrections, and then you move to more complex deletions and insertions.

And so, there's no doubt that there are still challenges to conquer, both in terms of how we correct deletions like in delta 508, but also in how we deliver this. Because obviously, this has to be delivered efficiently to large numbers of cells in the lungs, and we don't know how to do that yet.

So that's why we said, while we think CRISPR is an incredibly powerful technology for the future, it's going to take a number of years to conquer, both the, some of the editing challenges, but also in particular, the delivery challenges. And that's what we're working on in CF.

Now we're also -- I'd just remind you that this CRISPR) Cas9 collaboration, we have a right to several targets, fixed targets, and some of those will be in other diseases, where some of these issues like delivery and editing are much more straightforward. So I think you can expect to hear from us over the next couple of years on our progress, in some of those other diseases.

So at this point, are there mutations that are easier than others to edit? Do we know that?

Yes, as I said, I think single-base payer corrections are going to be a lot easier than complex deletions and insertions to correct. But nevertheless, I mean, there are still some pretty significant challenges in diseases like CF. When you move ex Vivo therapy, and you move to inactivation in ex Vivo therapy, you're in a whole different world, in terms of efficiency. And so, you will see those I think from us and others, as being the first application.

Thanks.

So I'll turn it back over to Jeff maybe for some final comments tonight.

Yes. First of all, thanks for your questions. Thanks for your patience.

I know it was a long call, but we did want to give you, not only our guidance, but the detailed rationale for the guidance, so that you understand our model. And we appreciate your questions on that.

And as I look at our progress as a Company over the last year, I would call out three things that I think are important. First, the continuous increase in the number of patients that we can treat, and actually a fairly dramatic increase in the number of patients that we can treat with KALYDECO and ORKAMBI. And as we look forward, the increasing number of patients that we can treat with today's approval. So as I mentioned, 27,000 eligible. We're still only treating a third of those, and I think we have a clear path to get to the majority of those patients, both in the US and Europe over 2016 and 2017 and beyond.

Second thing I would say, is the pipeline progression, we're pleased with 661, progressing well into Phase 3 of multiple trials, of multiple patient populations. But equally importantly, the next gen correctors which are progressing through Phase I with our -- and still on a time line to get into patients as triple combinations later this year. We think that's going to be very important, both for the patients we treat, and potentially for additional subsets of patients.

And then finally, the progression of the science. We didn't talk about that a lot today, but the science of CF I think has progressed significantly, and we have a much better understanding of the folding correction process. And the science that David Altshuler is driving, and the rest of the research group in some of the new diseases.

And we've touched on those a little bit with CRISPR Cas9, but also others, that I hope we will be able to have a chance to talk to you about over the rest of 2016 and 2017, is an important long-term growth engine for the Company. So with that, maybe I'll close the call, and thanks again for joining us.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.