Pharming Group N.V. (PHAR) Q3 2022 Earnings Report, Transcript and Summary

Hello, and welcome to Pharming's Nine Months 2022 Results Call. My name is Lauren, and I will be coordinating your call today. [Operator Instructions] I will now hand you over to our host, Dr. Sijmen de Vries, CEO, to begin. Dr. Sijmen, please go ahead.

Thank you very much, Lauren. Good morning, ladies and gentlemen, or good afternoon. I'm very pleased to have you here at the nine months '22 Results Call. And with me here is my colleagues Anurag Relan, our Chief Medical Officer; and Jeroen Wakkerman, our Chief Financial Officer. And before we do that, of course, I would like to -- you to look at that forward-looking statement slides because this presentation may contain forward-looking statements that, of course, are based upon our current estimations and beliefs and expectations and as you know, things -- circumstances could change towards the future. Okay. And having said that, I would like to switch to the next slide, where you see probably a picture of three gentlemen there that you are -- for those of you who have been here before, you know our faces. And I would immediately like to flip to -- I'd like to flip to Slide #5, where I would like to remind you of our strategic objectives as we first have formulated them a while ago and that are still standing here. And that is, we are here to build and continue to build a sustainable business by focusing on the RUCONEST set. That still is very much the case and will be the case for the foreseeable future. Then, of course, the next step is to focus on the market approval and launch and commercialization of leniolisib in key markets of the U.S., U.K. and the European Union. And as you know, we have our own sales force capabilities in all of these three markets. And that's exactly that will be the core of the leniolisib business that will be built on top of the RUCONEST business. And thirdly, the ongoing pipeline development from our own internal projects and projects that we have, of course, acquired over the course of time and the management of these rare disease assets because that is actually what we are doing. We are focusing ourselves on rare diseases to bring patients solutions that are unserved and suffer from rare diseases. And as you know there's quite a few of these rare diseases that still have no cures of which now APDS just one of them so far. So if you would like to please switch over to the Slide #6. And there, you see the three main pillars of our business. And indeed, the importance for RUCONEST is here, of course, because the positive cash flow from RUCONEST helps to fund all these wonderful things that we are aspiring to do to fund leniolisib, to fund further pipeline development and management. So in other words, those sales forces that are in the market working on RUCONEST will continue to do that in the -- for the foreseeable future as our product has a place in the market and will continue to have a place in the market. The next one on the res side is the anticipated approval and commercialization of leniolisib. It's a rare disease. It's a recently discovered rare disease. So disease awareness is still relatively low. And there were some publications, of course, that stated that there was estimated to be 1.5 patients per million of population which are works out, if you see that on that calculation so that we -- according to the literature, there should be 1,350 patients. We have become very active now in starting to search systematically for these patients and are finding them on a regular basis in all sorts of places. And then, of course, you see there below that in itself, we believe that the leniolisib compound could become a platform in itself because we have found some very interesting additional indications from research alliances that Novartis has been doing with several very renowned institutions and are currently sort of prioritizing which one of these diseases to prioritize for subsequent development and of course, bring them eventually to the markets. And on the right-hand side, as I was already alluding to, an ongoing pipeline development for the rare disease assets through internal projects and the potential acquisition of new referral late-stage assets to in-licensing and M&A opportunities so that we can actually build a portfolio going forward. And of course, internally, we already have the in-licensed OTL-105, the ex vivo hematopoietic stem cell gene therapy candidate for hereditary angioedema. And last but not least, from our own platform recombinant alpha-glucosidase enzyme replacement therapy for Pompe's disease. So this is an overview of the way we see that we build a sustainable business. And let's just reflect on that one more second here. This is an important stage for the company. I said this before and I will continue to say that we are about to basically turn the company yet in a big other big transformation, namely from one product dependency on mainly one geography, RUCONEST for the United States towards a balanced portfolio of 2 products in the market and of course, a significant business that we expect outside of the United States in the European Union, but also, as you heard us say before, we're branching out. We're planning to branch out to Japan with leniolisib. So we're really transforming the company going forward with upcoming introduction of leniolisib into the market. And having said that let's just look at the leniolisib progress here on Slide #7 and you have seen back in time that we have been very pleased that on September 28, we could actually announce the filing and acceptance for priority review of the new drug application to the U.S. FDA and that we have a PDUFA goal date of 29th of March 2023 and that is where we are gearing ourselves up to bring the product subsequently as soon as possible to the U.S. market. Very important, we could announce that we have already received ahead -- well ahead of time of the approval of the product and ICED10 code so that the patients can be classified, diagnosed and of course, can be reimbursable as well as product comes to the market. And that is not an easy thing to get an ICED10 code especially not for a rare disease. It means the rare disease is recognized and is recognized as severe and significant and badly in need for treatment. And last but not the least, we are of course on track for the commercial approved of leniolisib in the first quarter because of that PDUFA date of 29 March. And we are, of course, planning to bring the product as soon as possible in the second quarter to the U.S. market. And we will keep you updated, of course, on progress regards to that. Then let's move to the next one, the strategic highlights of leniolisib progress outside of the U.S. on Slide #8. We were, of course, very pleased on the beginning of the year to receive the PIP, the pediatric investigation plan approval for the European authorities because the pediatric trials use the same endpoints as our adult, as our 12-plus trial on the basis of which leniolisib is hopefully going to be approved, so that was a very good news that there was buy-in from the European regulator for that as well. And then we were very pleasant surprised by the EMA granting us an accelerated assessment for our file for the leniolisib because that is a very rare trend that EMA grant accelerated assessment and therefore, recognizes that both the innovative character of the treatment is significant and the disease is very significant and needs urgent treatment. And of course, recently in October, you would have seen the announcement that we submitted the authorization application to the EMA, and we are expecting now any time soon a validation of the file by the Europeans. And that's the review continues. And then on the right-hand side, the U.K. authorities have granted us the -- in April, the promising innovation medicine designation, again, a recognition that there is a serious disease at hand here and as an innovative treatment that is making its way to the regulatory pathway. And we were very pleased that the U.K. government announced that they have extended the EC DRP as a recognition route for the European files until the end of '23. And as soon as we have the positive opinion from the CHMP, which is expected, of course, somewhere in the second quarter, we will be able to hand over the file to the United Kingdom authority, the MHRA. And in that respect, we will expect to get approval from them in -- early in the second half or late in the second half of 2023 because it takes about 2 months for them to review. That, of course, is very helpful because it means that we will have a generalized label generalized packaging throughout the European Union and the United Kingdom rather than a separate product with separate labeling potentially in the United Kingdom, which gives a lot additional complication and a lot of additional regulatory work. So we're very pleased with the decision by the U.K. government. And let's move over to the next Slide, #9 on our preclinical compounds. OTL-105, we have made some good progress, I should say, our colleagues at Orchard have made some good progress because they are the expert, of course, on developing that lentiviral vector to enhance the C1 inhibitor expression, and we're now starting to test this in preclinical HAE disease models. And as it says here on the slide, we anticipate to provide further updates as we get clearer views on when we can actually expect to go forward to the IND filing and of course, the subsequent clinical trials following an IND filing. And then on the right-hand side, last but not least in our pipeline are alpha-glucosidase in Pompe, where we are looking for differentiating features. Pompe's still a significant unmet medical need. And we believe that our platform may have the potential to have differentiating features versus the existing alpha-glucosidase enzyme replacement therapies. And that is why we are continuing to search for that. And if we find these, we will start developing this compound going forward. And that brings me, of course, at Slide #10, an overview of the pipeline that is now consisting of a product in the market, of course, a product in regulatory review on both sides of the Atlantic, leniolisib with the accelerated procedures ongoing, OTL gene therapy, 105 and alpha-glucosidase in Pompe. And of course, you see there that it would be good for the balance for the portfolio and the pipeline, if there were some additional in-licensed or acquired products that are in between that are in the clinical phase, preferably in the latest phase of development to actually get our launch calendar even a little bit fuller towards the coming years. And this brings me then on my last slide of the operational highlights on Slide #11, something we're very proud of at RUCONEST has again realized significant sales, and we'll continue to generate significant sales. RUCONEST has brought sales of $151 million these 9 months. And we are very pleased with the product that is already for such a period of time in the market that it has found its place in the market and is serving an increasing number of patients and is prescribed by an increasing number of physicians because of the fact that prophylactic therapy patients need a good medication for their breakthrough attacks. And RUCONEST as you know has a different mode of action than the prophylactic therapy, so it is a very rational choice to if you use bradykinin/kallikrein submission prophylaxis, either oral or injectable that RUCONEST is a very rational choice as your breakthrough medication. And we're very pleased that more physicians continue to see that and more patients continue to see that. And as RUCONEST will continue to play significant role in that market as a safe and effective acute treatment for hereditary angioedema. And therefore, we guided at the beginning of the year that RUCONEST will continue to have single-digit growth of revenues in 2022. And you can see that we are delivering on that and we think that is a very great compliment to all our colleagues who work very hard every day to bring RUCONEST to additional patients in mainly the U.S. market. And with that said, I'm happy to hand over to my colleague, Dr. Anurag Relan, our Chief Medical Officer, to take you through APDS and leniolisib highlights. Anurag, over to you, please.

Thank you, Sijmen. So we can jump to Slide 13. And here, you see that APDS is a primary immune deficiency and you see this on this slide, with many serious clinical manifestation. At the heart of it, it's an abnormal development of the immune system. And because of that abnormal development, you have what's called nonmalignant lymphoproliferation. So this is -- you see this manifest itself as swollen lymph nodes and enlarged spleen and liver. You can also see this in the GI tract. Another key feature of APDS because of this abnormal development of the immune system are the recurrent infections and a whole variety of infections are seen in these patients. And because of these recurrent infections and because of this abnormal development, these patients also develop a progressive lung disease and worsening of their airways with recurrent infections, but also a condition called bronchiectasis, which is irreversible loss of function. On top of that, these patients have -- because of this lymphoproliferation, they have the ability to transform into something malignant process such as lymphoma. So this is a serious consequence of the condition and it's observed unfortunately quite frequently in these patients. And lastly, these patients, although they have an immune deficiency, they also have an immune dysregulatory disorder, so they also exhibit some autoimmune phenomenon and we can see this manifest itself in anemias and other types of cytopenias, but it can also be seen in the GI tract as well as in liver disease. On the next slide, we have the results from the randomized, double-blind, placebo-controlled study with leniolisib and this was a 12 week study looking at 2 co-primary endpoints. The first co-primary end point is presented on this Slide #14 where you can see that leniolisib reduced lymphadenopathy and it did it in a rapid matter in this 12 week study again compared to placebo, and you can see that both on the left-hand, on the primary outcome analysis, showing a statistically significant reduction versus placebo in the size of these so-called index lesions. And then you can see that on an individual basis, also you can see the placebo patients, for example, either remaining stable largely or in some cases, worsening, but you can see the leniolisib-treated patients, you can see the size of their lymph nodes decreasing. On the next slide, we have the other co-primary endpoint. And I mentioned earlier that you see an abnormal development of B-cells in APDS patients. And because of that abnormal development, they have all of those other clinical consequences we've talked about. One type of B-cell that doesn't develop properly one manifestation of this abnormal development or what we called naive B-cells. And so what we see is in APDS patients, they have a low proportion of naive B-cells. And when we treat them with leniolisib, you can see on the left with the primary analysis, again, a statistically significant increase in the proportion of naive B-cells. But you can see on the right panel where we included the full set of patients, you can see, first of all, it's quite rapid. You see even by the first month, there's a significant jump in this proportion of naive B-cells. And you see that that's sustained over time for these patients versus the placebo patients who do not respond. And this, I think, again gets to the heart of the immune phenotype as seen in these patients, specifically that their B-cells now are able to function and produce antibodies and recognize antigens. On the next slide we see the safety profile and this is again from the double-blind, placebo-controlled study where we see that leniolisib was generally well-tolerated with the severity and grade of AEs across placebo and leniolisib patients were similar. There were no deaths reported in this study and in the -- there were no AEs that led to a steady discontinuation during this randomized study. And then lastly, there were no severe adverse events or serious adverse events that were related to study treatment. And now moving on. So these patients, I mentioned were treated for 12 weeks in the double-blind placebo-controlled study, but then they went on into an open-label extension study and here are some data that were recently presented at a conference in Europe just a couple of weeks ago. And this is showing patients who were in this -- in the randomized study and then went on to receive leniolisib and you can see data out to almost a year in these patients. And you see for -- on the left panel, you can see that their lymph nodes actually continued to decrease in size. So you see that initial decrease that they had. And then over time, that continued further out. And on the right side, you can see some images showing some representative samples of what this looks like. Again, on the top, you have patients who were treated with leniolisib in the double-blind study. And then you can see their lymph nodes decrease in time at the 12-week mark and then further out at the day 252 mark. And then on the bottom panel, you see a placebo patient, you see actually very nicely that there is almost no change in the size of this patient's lymph node between the screening time period and the day 85 time period. And then the patient receives leniolisib and you can start to see that there's no decrease in size. Similarly, we can see this on Slide 18 with the size of the spleen. I mentioned earlier because of this abnormal development, these patients' immune system, they also get lymphoproliferation and that can also be manifested in these massively enlarged spleens that these patients have. So on the left panel, you can see, again, these patients have a large spleen that comes from a decrease in size during the first 12 weeks of the study, but then that continued to decrease over the course of the extension study, the long-term study. And then if we look on the right side with the images, you can see in the top panel of patients who was treated with leniolisib, you can see that improvement, again, rapid improvement in the first 12 weeks and then continued and sustained decrease in the size of the spleen. And then on the bottom panel, you see a placebo patient whose spleen actually increased in size over the first 12 weeks. But then over the course of the following nearly a year, you see that spleen significantly decrease in size. So I think these are all consistent aspects that we're seeing with the treatment of leniolisib. And then I think the Slide 19 also highlights another important aspect is that because of these abnormal development of the immune system and specifically B-cells, they have what's called a class switch defect. So these patients do not transition to produce IGT type antibodies, but their immune system gets stuck producing IGM antibodies. And what you see here are three lines showing that patients who were say, treated or not treated with leniolisib in the placebo study. So those are in the red line. So that's no previous leniolisib and you see they have high levels and those come down over time and continue to decrease. And then patients who were treated with leniolisib, you see that they started at lower level, but they also continue to decrease over time. And then when we take all patients together, we can see that same trend that these patients now, their immune system is functioned properly because they are not stuck making just this one type of antibody and they're able to class-switch and produce specifically the IGT antibodies. On the last slide, or the next slide, excuse me, on Slide 20, you can see some of the milestones for leniolisib, Sijmen highlighted that we have now seen acceptance of the FDA file with priority review. We have completed the submission to the EMA also earlier this month. And later this year, we hope to start improvement for the pediatric studies and followed by some significant events also in 2023 with regulatory approvals that are anticipated as well as commercial launches. And with that, I will turn it over to our CFO, Jeroen Wakkerman.

Thank you very much, Anurag. First, the financial highlights of the first nine months. We had an increase in revenues of 3% from $146 million to $151 million. And in Q3, specifically, we had a turnover of $54.2 million, which means a growth of 2.6% in the quarter versus previous year. Our gross profit increased by 7% to $139.7 million and that was driven by, in the first place, growth in revenues, but also by production efficiencies and favorable tailwinds from currency translation effects. You probably all know that our sales is mainly in U.S. dollars and our cost of goods are in euro. So that is being reflected here. Our net profit increased by more than 100% compared to the same period last year, and that was driven by an increase in other income. And you may remember that, that is largely due to the reduction in the stake of BioConnection, our Finland -- Finnish partner transaction that we did in Q2. And the profit on that transaction was $13.8 million. The cash and cash equivalents, together with the restricted cash decreased from $193 million at the end of last year to $189.9 million at the end of the third quarter 2022 driven by, on the positive side, a strong operational cash flow, offset by foreign exchange effect because we've got a lot of cash in euros. Still a strong treasury chest also to be able to fund future growth in [indiscernible] by potential acquisitions. Moving to Slide 23. The -- again, the key numbers, a growth of 3.4% to $151 million in revenue, a growth of 7% in gross profit to $139.7 million, operating profits going up by 85% to $28.4 million. And here again, you see reflected the gain on the BioConnection share sale in Q2 and a net profit of $28.3 million, which is an increase of more than 100%. The quarterly development over the last 2 years in H1, we had a sales of $96.8 million so far this year, Q3, $151 million. That means a sales of $54.2 million in Q3 compared to $52.9 million in Q3 last year. So I would say, a steady growth in revenue which is seen here. Now moving to Slide 25, explaining the profit before tax growth from $21.3 million in Q3 last year to $33.1 million year-to-date in Q3 this year. Starting off with the growth in the business. As I just explained, that's the gross profit increase. Then an increase in costs and you see the different categories. First one is R&D expenditure that was largely related to leniolisib, the preparation for the launch. This includes also manufacturing costs and also additional costs in OTL-105, as Sijmen just described as well. Increased G&A expenditure, that's a collection of many costs, think about IT costs, think about recruitment costs because we have recruited a lot of people also to identify patients in the U.S. for leniolisib. And the latter categories marketing and sales expenditure that grew by almost $13 million. And again, that is largely due to out-of-pocket cost for leniolisib, almost $8 million, and a big chunk of it is because of payroll for increased marketing and sales staff. The next 2 bars are pretty high. First one, they almost wash out, but the one is the negative impact on profit last year from the OTL-105 investment, the collaboration with Orchard Therapeutics. And this year, the BioConnection sale of the shares. And that overall brings us to a profit before tax of $33.1 million. Moving to Slide 26. You see the development of cash from beginning of the year till the end of Q3, starting off with $192 million at the beginning of the year. And as I said, strong operational cash flow, operational cash flow before working capital was plus $26.7 million. Cash because of an increase in working capital, especially in inventory was $4.6 million, and we paid taxes of $5 million. And then you get to the net cash flow generated from operating activities of $17.2 million. Cash flow from investing activities, that's largely a cash inflow because of the BioConnection transaction. The cash part of that was plus $7.4 million and that was offset by capital expenditure and that was mainly in IT. The cash flow from financing activities, minus $5.3 million is regular lease costs and interest and the exchange rate effects of minus 20.9 is because -- mainly because we have euro cash in a euro reporting entity, but we are reporting our results here in U.S. dollars. So overall, that brings us to a cash and cash equivalent of -- at the end of Q3 of $188.7 million. So we're very pleased with this development, especially on the operational cash flow and a strong balance of cash for -- to support future growth. With that, I would like to hand over back to Sijmen.

Thank you, Jeroen, and then that takes me to the Slide #27, the outlook, the final slide of this presentation. And we -- as we said before, we continue to guide with a single-digit growth of the remainder of this year for RUCONEST sales. We already alluded about the commercial approval subject to the positive outcome of the FDA review that we anticipate with the PDUFA date on 29th of March with the anticipated launch in the U.S. in -- soon thereafter, so in the first half of '23. Then of course, subject to the positive review of the EMA, the positive opinion of -- from the CHMP, followed by the issuance of the MAA by the European Commission. And as you know, there's some timing between there. So you can anticipate both of them in the first half of '23. And that means that as soon as possible thereafter, we will start rolling out individual European markets in the second half of next year. And then the very pleasant surprise, as I was alluding to earlier, of the extension of the EC DRP filing for leniolisib by the MHRA, which means that we can work by submitting the European file to the U.K. authority and expect a much quicker decision, namely about 2 months after the CHMP positive opinion and we can go to market in the U.K. faster than anticipated as well. And then, of course, we continue and as you see -- and you saw from the numbers that Jeroen was outlining, we continue to allocate significant resources towards the anticipated launch and commercialization of leniolisib with a few that we are accelerating future growth as we start to build next year, expect to build the leniolisib business on top of the RUCONEST business. And last but not least, we are continuing to hunt for new opportunities to fill the pipeline, potential acquisitions in licensing of new late-stage -- preferably late stage development opportunities in rare diseases. And last but not least, all of the current activities can be funded as it's very clear from our current balance sheet. And only in the case of acquisitions, we think we may actually have to do additional financing, of course, depending on the size of the acquisitions. I think that concludes the outlook and that concludes the presentation. So operator, we could now turn the floor over to the Q&A questions -- to the Q&A section of this presentation. Thank you very much.

[Operator Instructions] Our first question comes from Hartaj Singh from Oppenheimer.

A couple of questions. One is different. One is on RUCONEST, one is on leniolisib. One, just what we are hearing, Sijmen de Vries, is that the increased use of prophylaxis therapies, especially the oils out there is leading to an increased use or at least patients having acute treatments on hand like RUCONEST. How do you expect that going forward? Do you expect that to be sort of a tailwind to your revenues for RUCONEST going forward? And how long could that last? And then when you listed, we get a lot of calls from investors who are interested in which other immunes or conditions, primary immunodeficiency disorders could you go after? And when could we start seeing some thoughts or some insights there?

Okay. Let me try to answer that first one first, Hartaj. RUCONEST prophylaxis, yes, I was alluding already to this that we see a continuing positive trend in the number of physicians and patients using RUCONEST. In the past, RUCONEST was never used for a breakthrough attacks also because the prophylactic therapy was mainly C1 inhibitor, and it did not make much sense in this case to use it. And RUCONEST was typically used for the very severely affected patients. Now those severely affected patients are still a lot of the core of business of RUCONEST because they can't get anywhere else although there's also patients who then switch over to prophylaxis and reducing their use of RUCONEST because they continue to have breakthrough attacks. And that's exactly why we are very pleased to see with the paradigm shift that has taken place over the past few years and towards bradykinin/kallikrein submission, although prophylactic therapies are significantly improved, there is still for a considerable and sometimes people tell me that it is more than half the patient that should expect either on a regular basis or incidental basis have breakthrough attacks, and even worse, I was recently at a patient -- international patient conference. And opinion leaders were warning there these patients that, please, even if you don't have any breakthrough attacks for a considerable period of time, please always have rescue therapy at hand because this is a nasty disease. It's stress-driven and you can never know when a breakthrough attack can come by. Because now the biggest danger is that people are sort of getting comfortable with their prophylaxis and that they get an attack still which because of this unpredictable disease and have nowhere to go without any rescue therapy. So that emphasis is being brought out more and more also from the key opinion leaders to the patients and make them aware of that. And that is actually the trend that we see. That is, of course, supporting and will continue to support the RUCONEST business towards the future. And it's, of course, when a very high and high using patient switches over to prophylaxis, we have to replace that patient with several patients that are, of course, on breakthrough medication. But that's exactly what our people are doing and what our people continue to do and where we continue to make progress and see a lot of opportunity there because we still have a relatively modest market share as you know in this market. So in other words, sorry for the longwinded answer. We see -- but for the foreseeable future, RUCONEST will continue to play that role in the market. And for the foreseeable future, this will be a necessity. Also, when other additional bradykinin/kallikrein inhibitors may come to the market, there's always the danger for breakthrough attacks and RUCONEST is there to be there with the unique mode of action that RUCONEST now has compared to all of its competitors and future competitors because we see no C1 inhibitor being in development anywhere in the pipelines of any of the companies simply because C1 inhibitor is a notoriously difficult compound to make and to develop other than that you get from blood donors. And those products are indeed not actively promoted anymore for active treatment. Sorry for a longwinded answer, Hartaj. I hope that answers your first question. And then I would like to... And maybe Anurag, could you shine light on that question about new indications for leniolisib because you're more at heart of it than I was recently.

Sure. Thanks, Sijmen. So we are looking at additional indications for leniolisib. These are not actually in the area of other primary immune deficiencies, but we are looking at a number of indications. And as Sijmen mentioned, these include areas where Novartis had actually started some work and has already some research collaborations ongoing. So we're trying to leverage that. But we're also looking at some new areas. I don't think we're ready yet to disclose what those areas are today. But as soon as we make some more progress with this, and I think we'll be able to talk about that in the near future, which specific areas these include.

Our next question comes from Joe Pantginis from H.C. Wainwright.

Hartaj asking some really good questions about the market dynamic. And I guess as you guys continue to block and tackle, getting more patients on RUCONEST because of the ongoing need for rescue therapies, can you remind us first about current patients and how often they need to get a new prescription either through exploration or other?

Yes, that's an interesting question, Joe. Typically, this is 12 months, the prior authorizations in the U.S. So every 12 months, they need to be renewed. We see some trends disturbance of that due to COVID were plans because they couldn't handle every 12 months extended that to a number of years. And then they took that back and did it for 3 or 6 months. But generally speaking, I think it's still the 12 months prior authorization that is actually very valid in the U.S. market. And a lot of that is concentrated in the beginning of the year. So patients that have been on drug for a long time mostly are getting their prioritizations renewed in the sort of sometimes during the first quarter, which is then, of course, a lot of admin work for those offices, doctors' offices. And we have our teams to help the doctors' offices process that paperwork and facilitate there whichever way we can. And that is, of course, what all rare disease companies do to actually make sure that the patients are not without any medication any time during that process because it can be a bit of a tedious process from time to time.

Got it. Makes sense. So my main set of questions really focuses on logistics and maybe some information that might be a little out of your hands. So I appreciate that ahead of time. So first, with regard to BD, obviously, you've been saying for quite some time now you're looking to be opportunistic with regard to expanding the pipeline in rare diseases and what have you. So just wanted to do a bit of a status check with regard to where some of these discussions stand and level of maturities.

Yes. Yes, we get a lot of inbound, Joe, from various banks that we work with and consultancies. And of course, our own folks, we've got a lot of inbound stuff. And a lot of it is, unfortunately, is repurposed molecules and then for some rare indication where sometimes the one rare disease, not the other one, leniolisib serves a APDS disease, which is very severe and is -- has a very high unmet medical need. And as you know, some of these rare diseases may not be so severe. And these repurposed molecules may not be the business model that you're looking for because there's either already generics available inside or outside the U.S. and we do not believe that this is a sustainable business model that -- but we're looking for more true innovative treatments and leniolisib is a good example in a case in point here. So in other words, we're being very precise also because it's our first M&A deal, of course. So we better get that right. That by it takes maybe a little bit more critical approach from our side. On the other hand, we've been very close with 1 or 2 companies over this year, became very, very close. And at the end, decided to still step away because we couldn't validate in the rare -- in a specific rare disease, we couldn't really validate the numbers that this company was quoting for these patients. And of course, that's always the case in rare diseases, right? In rare diseases, the numbers of patients that you find is a critical issue. And we have built up a significant database in the meanwhile, with our genetic testing of genetic diseases. We also have bought a significant amount of other data that we have -- we think we have very good insights in a number of mutation patterns that leads to certain diseases. And therefore, that helps our business development folks to actually make a choice and Anurag, who is an integral part of that group sits here, nodding his head opposite me that this is really always a challenge here. But we're very active in this market. And as you know, with business development, can never say, could be very soon, could be that another one bounces off and we have to continue and we continue our search. But we have increased our capacity significantly over the last year -- over the last year also having learned from some of these experience where you spend a lot of time and then eventually decide not to do it. And you want to add something here, Anurag?

No. Sorry, go ahead, Joe.

No, no, I was just going to say, no, that's really helpful and it's always great to see when Anurag and Sijmen agree nodding each other at the table. So -- go ahead, Anurag, sorry.

No, I was just going to add that, yes, we look at a whole range of different opportunities, and we do it in a systematic way. And I think as Sijmen said, we want to be cautious and careful and make sure that we bring in the right opportunity where we could add value and then we can leverage the work that's already been done.

Got it. And then just lastly, and this is really the part I alluded to where your hands might be tied with regard to how you answer it. So with 105, obviously, there's a bit of growing excitement for potential gene therapy around HAE, and this certainly came out at the recent HAE conference that we hosted. So I was just wondering, right now if you'll give us information as it comes out. Is there anything that we could look to even without timing that as the plan would be to release X type of preclinical data to be able to tease the profile of the asset?

So Joe, that's really the goal here, right? So I think, first of all, what got us into this position or why did we enter this partnership with Orchard was that we believe, again, around C1 inhibitor. We believe C1 inhibitor is the root cause of -- we know it's the root cause in these patients and we wanted to be able to provide these patients with C1 inhibitor in the same way that we do with RUCONEST to be able to do that with a gene therapy. The other modalities that we looked at really didn't present themselves with a reliable way to do that. So the goal now in terms of these preclinical models is to be able to use a vector that now has been refined by the team at Orchard and to be able to show that we can actually increase the C1 inhibitor levels in these disease models. So these are disease models being knocked out mice that have -- that don't have the C1 inhibitor gene in place. And now can you increase those levels to levels that we think would be meaningful in a clinical situation. And we're doing that testing now. So I'm hopeful to be able to provide an update on that soon. But those are the -- that's the type of information that we can look for is, say, can we show meaningful increases in C1 inhibitor expression levels in these preclinical disease models that could translate into the type of benefit that we would need to see in patients.

Our next question comes from Simon Scholes from First Berlin.

So you mentioned that you've identified 400 potential leniolisib patients. And I was just wondering if you could tell us how many of those are, if any, are pediatric patients? Then on the ICD-10 designation. In the last call, you -- well, in this call as well you've mentioned that this gives you the [indiscernible] start reimbursement discussions. I was just wondering how the reimbursement discussions are progressing. I mean, presumably, you expect to complete them by the time of approval in the U.S. in March. And then on pricing of leniolisib, I mean, I don't know to what extent you can comment, but I was just wondering if you expect -- I mean, presumably, the difference in pricing with this product between Europe and the U.S. is not like to be any way as large as it is with RUCONEST. I was just wondering if you expect any pricing differential at all? Or I mean what the size of the pricing differential might be like compared with RUCONEST. And then lastly, so you mentioned that there aren't any B1 inhibitors currently -- C1 inhibitor products currently under development. Does that also extend to C1 gene therapies besides your own pipeline product?

Okay. So maybe, Anurag, you want to say something about the patients and the...

Sure. So I'll take the first question, Sijmen, and then the last one.

Yes.

The -- with respect to the patients that we're finding and the patients that were in the study, it's important to note that, first of all, this is a -- it's a genetic disease. So these patients are born with this genetic abnormality to have these variants in one of these 2 genes at birth. And the disease can begin to manifest itself very early in life. So it is a serious disease and that it can manifest very early and then it's progressive. So it gets worse over time. In the clinical trial, we identified and treated patients that were at least 12 years of age and about half of the patients were actually in this age range between 12 and 18. I think the median age was actually 19. So there was a significant portion of patients between 12 and 18 years old, which they're adolescents, but they're in a formal definition that's still pediatric patients. Beyond that, so in this younger age group, we are finding patients in that age group as well. And it's probably in the range of around 20% to 30% of patients that we're finding that are even below the age of 12. So hopefully, that gives you some idea of the types of patients that have been treated so far in the clinical program and the types of patients that we're finding, but also that we're planning of course, clinical trials in this younger population too because there certainly is an unmet need there.

Looking into the future, wouldn't it be, Anurag, that as the disease becomes more known and more recognized that these patients are caught earlier because now you see that it takes many, many years for them to come to diagnosis, right? So earlier you catch them, the better, right?

I think certainly, as we increase disease awareness, but also hopefully a treatment becomes available, a specific treatment becomes available, that also oftentimes can drive further diagnosis. So I think those were all sorts of trends in a favorable direction. On the question of other C1 inhibitor therapies in development, so I think really, Sijmen was alluding to, there's no acute C1 inhibitor therapy in development, and there's really no actively promoted acute C1 inhibitor therapy other than there is a plasma-derived therapy also. But the -- there are gene therapies aside from our program that are in development and I think different modalities, different mechanisms to deliver the vector and to be able to -- C1 inhibitor. So I think -- but I do think that we have still a unique method and partnership here with Orchard that could be differentiating with respect to this ability to express C1 inhibitor.

And then, Simon, you had a couple of questions about pricing. Of course, we do not give any guidance on that because we always think that analysts are the experts on this to make up the minds what they think is typical pricing. And with regards to your question about the difference between pricing in Europe and the U.S., I think there's also a number of -- quite a number of rare disease compounds are on the market. And you can actually see what the difference is between Europe and the U.S. We think it's typically in the 60% to 70% -- the European prices are typically in the 60% to 70% range of what the U.S. price is. So the price gap has significantly narrowed or significantly narrower in these rare diseases than in maybe mass market diseases where all sorts of reference pricing systems kick in and that's, of course, not the case necessarily with the rare diseases. So I hope that answers your question there as well. And lastly, ICD-10 code is important because you can get -- you can work ahead. And indeed, you got it right there. You can work ahead to actually discuss coverage, not necessarily reimbursement because the U.S., of course, has a decentralized health care systems where you serve a number of the government-funded like Medicare and Medicaid systems, for instance, to mention 2. But the majority of the market is, of course, the private market, commercial market, as we call it. And there, you get coverage by the big insurance companies and the big health care plans. And that's, of course, having an ICD-10 code is incredibly helpful in this respect. Otherwise, it may take quite a long time before these patients could be reimbursed. So yes, our folks are really preparing there and to actually get coverage for the patients immediately after the product comes on the market. And that is, of course, the nice thing of the United States market that these things are progressing way faster than sometimes in the European markets because that's also -- the issue in the European markets is often despite the fact that you have a rare disease, it takes quite a considerable amount of time before you get a reimbursement. And of course, your own country is a positive exception in Germany to that. But as you know, many more European companies -- countries take a lot longer to unfortunately give patients that therapy that they so badly need. But we will do our utmost best, obviously, also to accelerate the rollout of this unique and a very severe rare disease as quickly as possible in the European markets. And the good news is, again, there is positive exceptions possible if you have a good dossier and if you have a good health economic underpinning and that's a clause where our teams are working around the clock on to actually make sure that happens so that we can swiftly get hopefully reimbursed in all the European Union markets as well. I hope that answers your question. Sorry for a bit longwinded answer...

[Operator Instructions] We currently have no further questions registered. So I now hand you back to the management team for closing remarks.

Thank you very much, operator. And yes, ladies and gentlemen, thank you for attending our 9 months '22 conference call on the results. And as we come to the end of this exciting year 2022, where we were very successful, not only with, of course, continuing the growth of RUCONEST sales, but also securing the FDA and EMA accelerated review, which, again, is very rare that you get it on both sides of the oceans. As we look forward towards moving into the next year where we anticipate that we could have the PDUFA date of -- that we have the PDUFA date of 29 March and could go into the U.S. market soon thereafter. And of course, the accelerated review by the Europeans where we could actually also go into the market and get a positive marketing authorization by -- before the end of the first half and go as soon as possible into the European markets. And lastly, the U.K. market, of course, where we can work on the direct recognition. So we had a very busy -- we look back to a very busy '22 and we look also forward to a very intense '23 where we will be starting to execute on the significant transformation of our company from a one product company in one geography to with a multiple product company in multiple geographies, driven by our own commercialization infrastructure on both sides of the oceans. And that concludes this conference. Thank you very much for your attendance again, and we look forward to updating you probably somewhere in March on our full year results 2022. Thank you, and have a nice day. Goodbye.