Pharming Group N.V. (PHAR) Q4 2022 Earnings Report, Transcript and Summary

Hello, and welcome to today's Pharming’s Full Year 2022 Results Call. My name is Bailey, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Sijmen de Vries, Chief Executive Officer. Please go ahead.

Thank you very much, Bailey. Good morning or good afternoon, ladies and gentlemen to our 2022 results call. I would like to start taking you through that. But before I do that, I would like to pay your attention -- you to pay attention to the next slide, which contains a statement on forward-looking -- on forward-looking statements, as we may be making forward-looking statements in this conversation. They are statements based upon our expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements, and you can read the rest for yourself, I assume. I'm today here -- next slide, please, I'm joined by my colleagues, Dr. Anurag Relan, our Chief Medical Officer; and Jeroen Wakkerman, our Chief Financial Officer. And we also have here, although not speaking on the conference, but to answer questions, our Chief Commercial Officer, Stephen Toor. And I would now like to start with the next slide, please and then next one. So where are we? We are -- we have developed over the years a very strong base with potential for significant growth. And that is based upon the commercialized asset RUCONEST recombinant esterase -- recombinant human C1 esterase inhibitor for the treatment of acute hereditary angioedema attacks, which is commercialized by ourselves on both sides of the ocean, as you can see in a lot of other markets as well outside of the US and the European Union, and of course, the UK. The potential for growth is represented here initially by the anticipated approval and launch for leniolisib PI3Kδ kinase delta inhibitor in development on the regulatory review for APDS where we anticipate in the not-too-distant future, the FDA approval and later on during the year, the European approval. And we are developing -- we have morphed ourselves into a company that is focusing on development and commercialization of rare diseases. And the first thing that goes beyond the APDS indication for leniolisib that we are quite far along with investigating leniolisib for additional rare disease indications. We are based in Leiden in the Netherlands, and we are here actually in our US headquarters in Warren, New Jersey where we speak to you from. And of course, we are a public company since 1999 in Amsterdam and since 2020 on the NASDAQ. So let's look at our business model on the next slide. We're really on our way to building a sustainable rare disease business, whereas we are now commercialized RUCONEST, although albeit on both sides of the ocean the vast majority of sales come from the United States. So we're now one product company with one geography. But that we expect to be changing very soon with the anticipated approval of leniolisib for APDS, which will represent a -- not only a possibility for a very significant growth of our US commercial footprint and revenue base, but also a very significant revenue generator outside of the US. So, we're looking forward to this year being a transformative year from which we transform from this one product, one geography company into multiple products, multiple geographies company. And of course, like I said before, we are quite far on our way, and we'll update the market as and when later in the year, to actually start additional development programs for leniolisib and additional diseases. And then last but not least, since we have a very scalable commercialization infrastructure in both Europe and in the US, we're actively hunting for additional products in rare diseases to either in-license that is our preferred mode of action and if not otherwise possible mergers and acquisition transactions to basically bolster that pipeline further and get that flywheel really get that flywheel going that we have here with our scalable commercialization operations on both sides of the oceans. And in the next slide, you can see the pipeline. And you can see immediately what I mean with that, whereas RUCONEST is on the market and leniolisib very close to the market. And of course, if we start clinical trial programs in secondary indications for leniolisib, there is still a considerable gap between those two products or those three products for -- in the near future. And the preclinical assets that we have in the form of OTL 105, the HAE gene therapy, and alpha glucose days from our transgenic platform, just like RUCONEST for Pompe's disease. So, let's look at RUCONEST being the founder strong foundation under our next slide, please, under our company. We returned it to growth again, after the COVID period. We returned to growth in 2022 as we were guiding single-digit growth over 2021 and that is something we are very proud of. RUCONEST was launched at the end of 2014. So, it's already quite a mature asset and has found its unique place in the market. It is the only recombinant treatment that targets the root cause of hereditary angioedema by replacing the missing or dysfunctional C1 esterase inhibitor. And over the years, it has proven to be very well tolerated and effective and continues to be a very effective treatment for the treatment of acute hereditary angioedema attacks, including and that becomes increasingly important those breakthrough attacks that people suffer from when they use prophylactic treatments. And that is indeed continues to be an issue. But overall prophylactic treatments have become -- and I'm especially referring to the United States market, of course, where the vast majority of our sales come from. And although the prophylactic treatments have become a lot better, they all have the same issue that up to half of those patients suffer from breakthrough attacks. And breakthrough attacks can come very frequently or very rare, but they come always at a moment and you don't expect it. That's why it is always the case. It is good practice in the United States that when you are in prophylactic treatments, you always have acute medication at hand, at home to actually inject yourself in the case of RUCONEST with the rescue therapy. And that becomes increasingly important. And that is also why we see increasingly that RUCONEST is being used by more doctors and used by more patients to actually treat those breakthrough attacks. And it is -- we can very proudly say the second most prescribed product that is detailed for acute attacks. And as you can see here, the FPC numbers speak for themselves on this slide, and we are finding that our patients are feel very, very confident to administer treatments themselves. It's a slow IV Injection and the very vast majority of patients do that, inject themselves or by their loved ones in the privacy of their own homes. So RUCONEST is has been on the market for a long time and will continue to play a very important role, supporting our business with sales and with important cash flows that enable us to invest in all those future programs that we are embarking on. So with that said, I would like to now switch over to the promise for significant growth of the company in the very near future. Then also for APDS, and I would like to hand over to Dr. Anurag Relan, who sits here next to me to take you through the story of APDS and leniolisib, Anurag, over to you.

Thank you, Sijmen. In the next few slides, what I'd like to do is review some information that we have on our understanding of the condition APDS, our understanding of the patient journey and what we've done in terms of developing leniolisib for APDS and then using this -- all of this information to help identify patients and then lastly, provide an update on where we are in terms of regulatory status. So on the next slide, we can see a schematic here of how this genetic defect in one of these two genes leads to this hyperactivity of this pathway. You can see that within the cell there on the left. And that hyperactive pathway then leads to this disregulated B and T-cell development. So these key components of the immune system do not develop properly. And as a result of not developing properly, patients suffer from a number of symptoms and conditions that you can see on the right. Most prominently, these patients develop recurrent infections. They also, because of this abnormal development of their immune system have what's called lymphoproliferation. So they get swollen lymph nodes, their spleen is enlarged. They have problems with expansion of lymphoid tissue, especially in the gut, and that can lead to a condition called enteropathy. And not only do these immune system cells not fight infection, they actually lead to the opposite problem, where they lead to a condition called Autoimmunity. And this can lead to autoimmune anemias and cytopenias and other autoimmune disorders. But it's also important to note that APDS is a progressive condition. So overtime, the disease worsens. And many of these patients, even at a young age, develop a condition called bronchiectasis, which is essentially scarring in the lungs that is irreversible. And many of these patients unfortunately go on to develop lymphoma, again, due to this unchecked lymphoproliferation in this abnormal development of their immune system. On the next slide, we can actually see what the consequences of this are on the patients themselves. Of course, we've talked about the physical consequences of recurrent infections. I mentioned bronchiectasis, and that can result in shortness of breath, coughing, just difficulty to do their normal activities. And you can see that, that can impact their social well-being and as well as their mental well-being. But there's a significant treatment burden. These patients are frequently hospitalized. They have numerous surgeries, many of them are unnecessary, especially when they've not been properly diagnosed, numerous doctor visits. So it's a condition that impacts many facets of these patients' lives. On the next slide, we see what's possible now in the current management of APDS, and that's really trying to address the consequences of the conditions. So not addressing the root cause but trying to address the symptoms. So what the symptoms of the manifestations are infections. So these patients are frequently on antibiotics, either prophylactically or to treat their infections, most of these patients are on immunoglobulin replacement therapy. And then again, on the flip side, when they have autoimmune complications or immune dysregulatory complications, they're put on steroids, other immunosuppressants or a class of drugs called mTOR inhibitors to try to modulate their immune system. None of these therapies, of course, are FDA approved for the specific treatment of APDS. And again, the worst condition, worst possible outcome for these patients is that they need a stem cell transplant. And unfortunately, even stem cell transplants, although potentially curative have significant morbidity and mortality associated with that. On the next slide, we can see the future now and what we're developing is leniolisib, which is a targeted disease-modifying treatment for APDS. And leniolisib specifically blocks the PI3K pathway, and thereby modulating and trying to return to normal the activity in this pathway. A consequence then of that should be that we can actually develop the immune system properly and then, again, impact all the other things that are the downstream effects of that abnormal immune system development. And that's -- and when we've gone on to study that together with Novartis, and you can see in the next slide, the overall clinical development plan, which includes a number of studies, dose finding studies co-controlled study and at the bottom, a long-term extension study. There are patients now in that long-term intention study that has been treated for a number of years, many patients -- several patients over five years, one patient who's been in the study now for seven years. So we have extensive data on the use of leniolisib both in a long-term perspective, but also in a placebo-controlled fashion. And in the next slide, we can see some of those results. We see that the study met -- the randomized controlled study met both primary outcomes, which was, number one, to increase the number of naive T cells. Again, B cells that we're not developing properly as a result of that underlying hyperactive pathway. We were also able to achieve decreased lymphadenopathy. Again, this was a primary manifestation of APDS. On top of that, when we look over in the randomized study as well as over a longer period of time, these patients spleen size shrinks, we see improvements in those autoimmune complications. We see in general that the drug was also well-tolerated in the data package that we submitted to FDA. For example, we have a median exposure of two years for the patient population. On top of that, when we start looking at the longer term outcomes, we see that these patients are getting less infections, and they're using less immunoglobulin replacement therapy. So despite using less of the therapies that needed to control infections that are actually getting less infections, so it's actually very nice to see how impacting that pathway can impact the immune system and then can actually have an impact on all of these clinically relevant endpoints in terms of infections and also reduction of the immunoglobulin replacement therapy. On the next slide, we can see where we are now in terms of safety. And what we see when we look at the randomized controlled trial data is a comparison of leniolisib on the left with placebo on the right, and you see a very similar profile in terms of the grade of adverse events that were experienced by these patients. And that mimics what we see in the long-term extension data. So in general, leniolisib has been well-tolerated. And again, as I mentioned earlier, we have some patients who on the therapy in the studies for several years now. On the next slide, we can see the activities that we've been conducting to help find patients. And there's a number of activities as we begin to understand the disease and this patient journey that help us inform how to go about finding these patients. We, again, estimate that based on a prevalence of 1 million to 2 per million, there's more than 1,500 patients in the key markets where we intend to commercialize leniolisib first. We've already identified 500 patients in these markets. Much of this has been done through a partnership with Invitae, which involves a genetic testing program that is at no cost to patients that can make a definitive diagnosis for these patients. We also have a number of partnerships with medical organizations, patient organizations and these are critical in helping us to uncover these patients who have this rare primary immune deficiency. And we received tremendous support in these partnerships. Again, these patient organizations who are -- who really have the same goal that we do, which is to help improve the lives of these patients with these rare and ultra-rare diseases. On the next slide, we can see where we are now with our regulatory status. The -- as Sijmen mentioned, we have filed in the US. It's under review with a priority review designation for patients who are enrolled in the programs that I described, which were adults and adolescents age 12 and over. We also have an ICD-10 code in place. And we have a number of positions already using that code. So that's also nice to see. And we have coming up at the end of this month, the expected decision from FDA on the 29th of March. And we expect that later this year in the -- still in the second quarter of this year, we expect to be able to commercialize pending a positive decision for leniolisib. In Europe we've also filed an application there. We also have a positive destination on our Pediatric Investigation Plan, which, of course, is necessary to begin the filing process. We originally received accelerated assessment. This has now been switched to a standard assessment as EMA have requested additional data. We still, however, anticipate that CHMP will be able to provide an opinion later this year in the second half of this year with an approval to follow approximately two months later -- and -- with the UK regulators, we expect to be able to file soon after the CHMP. And then on the next slide, you can see this over time, some of the key anticipated milestones. Earlier this year, we were able to begin the first of two pediatric studies and again, we have FDA regulatory decision coming later this month with the US commercial launch soon after that. We're also going to be getting a new study in Japan, and we expect that to also occur in the first half of this year. And as I mentioned earlier, we are expecting a CHMP opinion as well as the UK filing in the second half of this year. And I will now turn it over to my colleague, Jeroen Wakkerman, our CFO.

Thank you very much, Anurag. So the financial highlights for 2022 versus last year related to the P&L. To start off with, our sales grew by 3.4% in 2022 to $205.6 million. And in Q4, sales were $54.6 million, also a growth of 3%, in line with the single-digit growth guidance that we've given throughout the year. Gross profit increased from $178 million to $188.1 million. That's an increase of 5.8%. And therefore, we improved our gross margin. Operating costs grew from $167 million to $184.4 million an increase of 10.5%, and the operating profit grew to $18.2 million, which is an increase from last year of $4.5 million. The net profit decreased from $16 million to $13.7 million in 2022, which is a decline of 14.5%. And in the next few slides, I'm going to give you a bit more color and detail on the results on what happens. So next slide, please. The overall message is that, we grew our sales, and we also grew our investments in the launch and the preparation of the launch in leniolisib. Revenue grew to $205.6 billion, and that was supported by a price increase, which was well below the CPI level, but also an increase in the number of doctors prescribing RUCONEST and an increase in the number of patients. Regional split is that we had a growth in the US of 3% and the EU sales were flat over the two years. Moving to gross profit. Gross profit increased, and that was, amongst others, obviously, by the sales growth, but also by the improvement in gross margin from 89% to 91%. And that was driven by favorable production results but also an impairment on the inventory in 2021 of $2 million that we didn’t need to take this year. The other income, as you see a sharp increase from $2.6 million to $14.5 million. And that includes the transaction that we did with BioConnection, our fill and finish partner in which in Q2, we reduced our minority stake from 44% to 23% and we had a gain of -- gain on disposal of $12.2 million. The remainder of that other income is mainly grants that we receive in the Netherlands on research and development. The operating costs increased from $166.8 million to $184 million. And you see that overall, the costs were flat on a like-for-like basis, so to say. And you see the growth in leniolisib out-of-pocket expenses. So we consider out-of-pocket expenses, mainly third-party providers, and that almost doubled to -- from $18 million to $34 million. Please be reminded that in that normal operating costs, there are also leniolisib costs. For example, the 25 disease educators for leniolisib that started in -- on the 1st of August last year. So the overall cost for leniolisib increased more than what you see here. Then going to the cost category development, R&D in this picture declines. But I'd like to remind you that last year, we had a one-off impact of $18.5 million. So we deduct that from the $70 million to come to a like-for-like number. And that one-off was related to OTL-105, the collaboration agreement with Orchard Therapeutics, and also an impairment on intangible assets. So on a like-for-like basis, the R&D costs were largely flat. G&A costs, we increased and that was mainly because of payroll and IT costs, just to strengthen the backbone of the organization with the growth that we foresee in the near future. And we see a growth in marketing and sales costs, $26 million up from $59 million to $86 million almost, and that was mainly in leniolisib and mainly in categories like marketing and market access development. The operating profit increased from $13.6 million to $18.2 million, and that's the effect of the increase in the gross profit, the BioConnection gain on disposal and offset by the higher cost from our investments in the leniolisib launch preparation. The net profit reduced, and that is mainly because of the financial results that reduced from 8.8% last year to minus 2.2%, and that is mainly foreign exchange-driven. Now moving on to the next slide, where you can see in a different way, what happened to the profit before tax. Last year, it was $23.1 million. We had some one-off costs in 2021, again due to OTL-105 and some impairments. So you could argue that the like-for-like profit before tax last year was $43.1 million. So what happened in 2022, starting from that base, we grew the gross profit by $10.3 million. As I said, the R&D expenditure was relatively flat, although within that pot, there were quite some changes. So we increased the investment in leniolisib. e increased the investment in OTL-105. We have more cost for AKI and cattle, the program that we have stopped by now, so that will reduce in 2023. And we reduced the cost in 2022 on Pompe and on the COVID R&D. So a mix of things and I think a good reflection of our strategic intent. The increased G&A expenditure was mainly, as I said, because of payroll, additional people and IT costs and the marketing and sales was largely driven by leniolisib. See again, the BioConnection transaction results and a decrease in the financial results. And hence, we come to a profit before tax of $15 million in 2022. Not on this slide, but important for those who have -- who are modeling, you will see that we have a low tax rate -- lower effective tax rate in 2022. It was only 9% versus 31% the year before. So that's very positive. And the reason for that is that the gain on disposal on the BioConnection transaction was tax exempt. Now on the cash flow development on the next slide please. We started off the year with $192 million of cash. The operational cash flow was plus $22.9 million with working capital almost flat during the year, so no cash flow. The investment cash flow was largely related to two items, CapEx in both PP&E and software, but very limited, it was only $2 million in total. And cash from the – cash – income and cash from the BioConnection transaction. The cash flow from financing activities was largely related to interest on the convertible and some regular lease costs. We had negative exchange rate effects on the cash. And we ended up with a cash and cash equivalent balance $50 million more than we started the year with – at $207.3 million – finishing the year at 207.3 million. And we can confirm that we have full access to all of this cash or our cash deposits. Then on the next slide, the outlook for 2023. We continue to see a low single-digit growth for RUCONEST revenues. The key event for 2023 is obviously, the developments on online ownership. So we expect a US FDA approval in the first quarter. In fact, it's 13 days from now, the PDUFA date is the 29th of March, and the US launch and commercialization will start shortly after it in the first half of this year. For the UA, we expect a -- sorry, the EU, we expect a positive CHMP opinion from EMA in the second half of this year and a marketing authorization for Europe that will follow two months later. For the UK, we will follow -- we will file afterwards, after the EU approval with the UK's MHRA, following The European Commission Decision Reliance Procedure. To accelerate future growth, our investments, mainly in leniolisib will continue to impact profits in 2023, as you have seen in the previous slides that I've showed, and we're working hard on life cycle management for leniolisib. So the new indications besides for APDS further details on our plans to develop leniolisib and additional indications will be provided in the second half of this year. And as Sijmen said, we continue to look for potential in-licensing and acquisition opportunities and focusing on late-stage developments and assets in rare diseases. So overall, we've had a good year. We've had sales growth. We have had an increase in operating profit. We've had good cash generation and cash in excess of $200 million. And we are 13 days away from the leniolisib PDUFA date. With that, I would like to go to the next slide and open up for Q&A with my colleagues, Sijmen de Vries, Anurag Relan and also our CCO, Stephen Toor. Thank you very much.

Thank you. [Operator Instructions] Our first question today comes from the line of Sushila Hernandez from Kempen. Please go ahead. Your line is now open.

Thank you for taking my question. I just have two questions. The first one on leniolisib. So you have identified now more than 500 patients that have confirmed APDS diagnosis. Can you comment on what a realistic target is for the number of patients that you can identify and again receive leniolisib once approved? And could you also provide an update on your reimbursement discussions? Thank you.

I missed the first part of your question.

On the potential numbers, well, Sushila the -- I think you're referring to the label, which is now 12 and upwards, right? So we've started our first Pediatric trial. And I'm looking here at Anurag, I think, it's about 25% of patients are below 12 years of age. So they would initially not qualify for treatment until such time that we have the pediatric approval in our hands. Furthermore, I think, all of the other APS patients, we have no -- we have not seen so far APDS patients that would not qualify for treatment because the diagnosis is made by this genetic test and that's basically yes or no answer. It's pretty clear in that respect.

And there's a small number of patients, of course, that have already been transplanted. Some of those successfully, so those also would not qualify, but again, the vast majority of the other patients that Sijmen mentioned would potentially be eligible for treatment.

And then with regards to your second question about reimbursement. Obviously, these discussions are relevant for the Europe -- for outside of the US. Those have not started because we had – we don't -- we're not approved yet. And in Europe, normally speaking, those discussions start after you have the approval for the product. In the United States, we will be bringing -- sorry, we will be bringing leniolisib to the market as soon as possible after the PDUFA date and will, of course, inform the market about the pricing in the United States as and when there are discussions.

Okay. Thank you. And then just….

What’s your question?

Yes. Thank you. And just one more question. When can we expect to see additional assets entering your pipeline via internal projects or in-licensing acquisitions next to a second indication for leniolisib or your gene therapy candidate?

Yes. So basically, the secondary indications leniolisib in the second half of this year will be informing the market about that. And with regards to in-licensing and acquisitions, we're very active. We have a small, but very efficient business development group, turning over a lot of incoming assets that we get offered/that we find ourselves. We've had a evaluation in several stages. We've done a few due diligences even over the last year, and of course, as you can see, nothing has resulted in a deal. So until such time, we keep working beavering away at it and trying to find those assets that fit our portfolio. And we're really looking for serious rare diseases. I think leniolisib is a very good case in point where we are very comfortable to take Phase 3 risk because leniolisib, we only could look at the first cohort of patients that had to undergo on the dose-finding study and the Phase 3 study was ongoing. We're very comfortable with that provided that we have a good clinical proof-of-concept in our hands when we actually start to engage with the asset. Our preferred mode, obviously, for this is in-licensing as we are still a relatively small company. And of course, an in-licensing transaction is much easier to handle than mergers and acquisitions, especially, of course, when you are launching a product like leniolisib this -- that we do with leniolisib this year, which requires a lot of our focus. Does that answer your question, Sushila?

Yes, that's clear. Thank you.

Thank you.

Thank you. The next question today comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead, your line is now open.

Hey guys. Thanks for taking the question.

Hi Joe.

So, just looking at some of the internal workings company and the decisions that you're making. I've been covering you guys for a while, so now I've been also sort of BC and AC before cattle and after cattle. Sorry for the bad joke. So, with that said, I guess I wanted to get into the continuum of that decision where, obviously, you needed that potential capacity as RUCONEST was looking to expand into preeclampsia and AKI. So, I'm just wondering what percentage of your decision factored into sort of the projected needs for RUCONEST in HAE with -- versus your ability to expand your current rabid population for any needs?

Yes. Yes. Thanks, Joe. So, the answer to that is that there is more than sufficient production capacity -- manufacturing capacity in the rabid platform to serve hereditary angioedema and even has significant growth possibilities. And this is a very flexible system. It takes a while to upscale, but it is a very flexible system. And it is a very flexible manufacturing process. It takes also a while and it's a complex manufacturing system, but it is really -- has the capacity to actually deliver a lot more product. then we currently deliver. So, if we were to get a significant increase in market share in hereditary angioedema, we could actually master that.

That's great. And then just curiosity with cattle, is there any potential here to monetize the platform that you already have in place?

No. Unfortunately, we came to the conclusion that there's no significant possibility to actually monetize that and therefore, we have halted all the activities there. It's a different product, right?

Yes, absolutely. And I guess for your own, obviously, you said profits might be impacted further based on further investments in leniolisib. So, I'm just curious how much of that is the new indications that you'll give visibility on for the second half of this year versus where do you stand with regard to rightsizing the marketing and sales costs and investments that you still might have to do?

Yes. No, exactly. We expect that the marketing and sales costs for leniolisib will further increase in 2023, Joe. And that's just to support the launch in the EU and in the US, obviously. On the life cycle management, we hope to start with a clinical trial for example by the end of this year, but it will depend on the design of the trial, how much money we need to put into that. And probably for 2023, that impact will be fairly limited because if it happens, it would be towards the end of this year anyway. So, the impact of that would be more in 2024 than in 2023. But we foresee an increase again in the marketing and sales cost in -- for leniolisib.

Got it. Thanks a lot guys.

Yes, Joe.

Thank you. The next question today comes from the line of Hartaj Singh from Oppenheimer. Please go ahead, your line is now open.

Great. Thank you and thanks for the questions. Really nice update. We missed you all at our healthcare conference. We glad to hear your voices over the phone today. So maybe just talk a little bit about the 500 patients, there's a question before, I just want to build on that a little bit. You've estimated about 1,500 patients as your market opportunity. You've already identified $500 million. How do you think, Sijmen, of just the -- and Anurag of the overall opportunity sort of the incident patient, the prevalence patient. I mean, do you think that that 1,500 is now a reasonable figure, or do you think it could be larger? And I just had a question on -- a follow-up question on [indiscernible]? Thank you.

You want to?

Sure. Sijmen. Hartaj, so we've -- when we look at the prevalence, and we have good data, for example, in some European countries, if we take France, for instance, where there's already 60 patients identified in a country that's a population that's about $50 million. So, we know the minimum prevalence, again, really without our involvement as -- and without a therapy being available is about $1 per million. So we've conservatively estimated about $1 million to $2 per million in terms of the prevalence, and that's where that 1,500 number comes from.

Yeah.

Now, as we've been out there talking about the condition, obviously, we're finding more and more patients, including in places like France and across Europe as well as in the U.S. So that number we expect to continue to increase. I think a big driver also of diagnosis though is the availability of a potential therapy, a targeted therapy. So I think as -- and then hopefully, we can have a therapy available for these patients soon. But once such a therapy is available, I think that will drive even further diagnosis. I think we're fairly on conversion right now with the estimates that we're providing in terms of the prevalence. But certainly, I don't think it would surprise any of us if the numbers were significantly higher.

Yeah. That makes sense Anurag.

Yeah.

I mean just from being at ASH and talking to physicians and whatnot, that's our sense also in call checks. Just another question I got of to your regulatory question. I know you're very close to the approval. But just where are you in terms of any FDA audits or facility inspections and have you already have the laboring discussions and all? And thanks for all the questions.

Sure. So I can't comment on any specifics other than to say we're engaged in regular contact with FDA and those -- that contact includes the routine types of things, including inspections, audits as well as labeling discussions that have -- that are occurring.

Great. Thank you everyone. Good luck. And we talk soon. Bye-bye.

Thank you, Hartaj.

Thank you. [Operator Instructions] The next question today comes from the line of Christian Glennie from Stifel. Please go ahead. Your line is now open.

Hi. Good afternoon guys. Thanks for taking my questions. The first question on -- so let's start with RUCONEST. Just to get an idea of about the 3% growth last year in the U.S. sort of price versus the volume mix in terms of what was driving that and what your expectations are for the 2023?

Yeah. Yeah, we stated that we took a price decrease below the CPI. That's our normal modes and over the -- has been a normal modes over the years. So I think the price increase, of course, is the biggest driver of this growth. So you could say that the underlying volume growth is more or less flat to slightly maybe going up or down and there some quarterly fluctuations there as well. But I think that's how you should see that. So it means that nucleus continues to basically be prescribed by a wider audience of physicians. We think that's important. As I was saying in my earlier part of the presentation, also by more -- used by more patients and used by more prescribers, reflecting the fact that there is a continued need for this product in terms of especially, the breakthrough attacks that continue to occur under all the prophylactic treatments that are available in the market. And yes, some of them have improved significantly from the past, but no patients will always need and always have acute treatment at hand to be treating that unexpected breakthrough attack. Do not forget this is a stress related disease and people can be very nicely surprised by breakthrough attacks. Does that answer your question, Christian?

Yeah. Thanks. And it seems similar outlook to 2023 in terms of the price. Okay. And then on leniolisib, then a couple here. So just on the 500 patients, you've already said yeah it’s about 25% under the 12 years. But what's the rough sub-split of the $500 million in terms of the US and Europe?

Stephen, would you like to comment on that?

I would. Maybe I can take that one. So I think they're about equally distributed. Yeah, so I will also comment that a lot of the work that was done in finding patients was actually initiated in Europe through this group called the European Society for Immunodeficiency. So they have done a lot of the work. And in the US, there wasn't such a coordinated effort. So we're a little bit behind in terms of the process, but we're quickly catching up, I think, in the US in terms of disease state education and finding patients.

So it is fair to say that Europe had head start, right, on this whole thing?

Exactly.

But we're getting in the US.

Sorry. But just to clarify, I thought the -- is the $500 million just Europe and US, or I think it included some other markets maybe or not?

It does include other markets well. I was saying that amongst the -- if we look just at the US and Europe alone, they're about an equal number.

But it is more than $500 million right now, right, there as well, yes.

Okay. And then on the EMA side, obviously, you had the initial shift from accelerated standard review. The way you described at the time was obviously further data from the open-label extension. Is that a -- subsequent interaction with the EMA, is that still the case? I mean, is there anything additional thrown up there?

There has been no change there. We're collecting that additional year of data and intend to provide it to in our responses, and we're still expecting an opinion from the CHMP in the second half of this year.

Okay. Thank you. And finally, if I may, in terms of thinking about a bit on the modeling side. I mean, obviously you -- obviously, the nature of the agreement with the last -- probably confidential, but an idea of the potential milestones that might be applicable to Novartis on FDA approval? And to what extent that might actually be offset by the by them exercising the option on the priority review voucher that they should get. Just a bit of any insight you can give us there would be helpful. A – Sijmen de Vries: Yes, happy to do that. I can give you some guidance. I think for modeling purposes, it's probably a pretty neutral operation.

Okay. So the PRV might offset the milestone, yes. Okay A – Sijmen de Vries: Along those lines.

Thank you.

Thank you. There are no additional questions waiting at this time. So I'd like to pass the conference back over to Sijmen de Vries for any closing remarks. Please go ahead.

Thank you very much. Yes. Ladies and gentlemen, as we were referring to, we had a very good year 2022. We laid a very good base for transferring our company from the one product, one geography company into two products, multiple geography company. We believe that leniolisib has a very significant commercial potential significantly larger than the RUCONEST franchise. And of course, we're very proud what we have achieved and continue to achieve with RUCONEST, which is, of course, a very strong supporter and foundation and cash flow generator going forward. And we believe also that the high hurdle to entry the complex manufacturing of the recombinant C1 esterase inhibitor by means of our transgenic platform will, therefore, mean that there will be -- for a significant period going forward, RUCONEST will continue to create those -- generate those cash flows that enable us to invest in all these plans, including leniolisib secondary indications and also in licensing of additional assets to actually start launching products on a very regular basis going forward. Because the other nice thing is we are having a very nice scalable commercialization operations on both sides of the ocean and therefore, we can easily handle additional assets for commercialization over the coming years. So we look forward to catching up with you later in the year when we have the next set of results available and continue to embark on our journey into 2022, the important transformative year for the company. Thank you very much for attending this conference. And like I said, we look forward to updating you on the next occasion. Goodbye.