Rigel Pharmaceuticals, Inc. (RIGL) Q4 2019 Earnings Report, Transcript and Summary

Greetings and welcome to Rigel Pharmaceuticals Financial Conference Call for the Fourth Quarter and Year End 2019. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Dolly Vance, who is Rigel’s Executive Vice President, Corporate Affairs and General Counsel. Thank you, Ms. Vance. You may begin.

Welcome to our fourth quarter and full year 2019 financial results and business update conference call. The financial press release for the fourth quarter was issued a short while ago and can be viewed along with the accompanying slides through this presentation in the News and Events section of our Investor Relations page on our website, www.rigel.com. As a reminder, during today’s call, we may make forward-looking statements regarding our financial outlook, and our plans and timing for regulatory and product development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent annual report on Form 10-K on file with the SEC. Any forward-looking statements are made only as of today’s date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. At this time, I would like to turn the call over to our CEO, Raul Rodriguez.

Thank you, Dolly, and thank you for joining us today on our fourth quarter 2019 financial call. Also joining me today on this call is our Chief Medical Officer, Wolfgang Dummer, who joined Rigel towards the end of 2019 and has already been an excellent addition to the team; Tarek Sallam, our Vice President of Marketing has been with Rigel for 3 years now; and Dean Schorno, our CFO. I’d like to begin on Slide 5. Looking at Rigel’s accomplishments in 2019. Rigel has 4 key value drivers and we’re happy with our accomplishments across all of these through 2019. Beginning with TAVALISSE, the cornerstone of our business. We have continued to grow sales in the U.S., as we announced in January, during the fourth quarter we generated net product sales of $13.8 million, an increase of 90% from the fourth quarter of 2018. For the full year 2019, we reported a total of $43.8 million in net product sales. Along with growing revenues, we’re also seeing an increase in how long patient stay in our drug or the persistency rate for TAVALISSE. The TAVALISSE label states that patients should remain on the product for 3 months, and if no benefit is seen, they should stop treatment. The fourth month persistency rate is a percentage of patients who receive that fourth month of treatment and who we believe are seeing a benefit. We have continued to see an uptick in our fourth month persistency rate, which has increased to 54% from 45% previously, suggesting a growing number of patients who are receiving a benefit from TAVALISSE. This is likely due to the increase in use in earlier lines of therapy and the growing physician experience on how to use TAVALISSE. There is a substantial opportunity to help patients whose lives are negatively impacted by chronic ITP. And we are pleased with the success today. Tarek Sallam will discuss this in a few minutes and this is just the beginning of TAVALISSE in the U.S. ITP market. Along with the U.S., we’re also working to expand the availability of our product globally. We have established access to markets in Europe, Japan and Asia, and Canada and Israel via collaborations with 3 well-established companies. These agreements were secured over the last 16 months and provide favorable economics to Rigel. This demonstrates the attractive opportunity for our product outside of the U.S. In January, our marketing authorization application or MAA for fostamatinib in adult chronic ITP was approved Europe, opening the door to the largest global market outside of the U.S. Our partner Grifols is gearing up for a launch, which we expect to initiate in the second quarter. Another important market is Asia, in particular to Japan, where our partner, Kissei Pharmaceuticals, has an ongoing Phase 3 trial with Japanese subjects. This is a common regulatory requirement for the approval of a drug developed outside of Japan. We are happy with the progress they are making. And just last week, we were informed that Kissei has received orphan drug designation in Japan for fostamatinib in ITB. While Medison will be marketing our product in Canada, Rigel is managing the regulatory approval process, having filed the NDS in Canada. This is the equivalent of a NDA. Based on the length of the regulatory review in Canada, we expect to have approval by early next year. So as you can see, we’re seeing great success globally. We believe that warm autoimmune hemolytic anemia or AIHA is an even larger opportunity for Rigel. Warm AIHA is another auto immune disease like ITP, where the body produces antibodies against hematologic cell type; in this case, red blood cells. We have generated very encouraging data from our Phase 2 trial of TAVALISSE in warm autoimmune hemolytic anemia, giving us the confidence in our Phase 3 trial. The Phase 3 trial launched in 2019 and we have made excellent progress to date. Wolfgang will add some color to this topic later in his presentation. And finally, we’re excited about 2 key assets in our pipeline, our IRAK1/4 inhibitor and the RIP1 inhibitor, both of which are in Phase 1 trials. IRAK and RIP are 2 of the most attractive immune targets in biopharmaceuticals today. And based on early data, our molecules have demonstrated characteristics, which gives us a great deal of optimism for their potential. Now, turning to Slide 6, our ability to execute on our key value drivers has positioned us well for continued growth in 2020. ITP is a $1.1 billion market and growing in. Outside the U.S., the ITP market is about $900 million and also growing. And we think that warm autoimmune hemolytic anemia has the potential to be a $1 billion market in the U.S., equal to the size of the ITP market. And our pipeline programs continue to offer Rigel tremendous business development opportunities in the near-term and in the future. I will now pass the call over to Tarek for a commercial update. Tarek?

Thank you, Raul. Our current commercial efforts are centered around our first marketed product, TAVALISSE, which as you see on Slide 8, is a kinase inhibitor indicated for the treatment of thrombocytopenia in adult patients with chronic ITP who had an insufficient response to a previous treatment. On Slide 9, you get a sense of what the ITP market in the U.S. looks like. It is sizeable and it continues to grow. As you see on the left side of the slide, we estimate that there are about 81,000 adult ITP patients in the U.S. Patients with the disease cycle on and off therapy, so that in any given year there are roughly 21,000 patients in the post-steroids setting, representing a focused market opportunity. Now, looking at the right side of the slide, you see how this segment of the market is broken down by lines of therapy, with the vast majority of patients being treated in the second or third line setting. The use of TAVALISSE during the initial stages of launch was primarily in the fourth line or later. At the time of the launch, there was a subset of patients with a high unmet need for a new therapeutic option. These patients had failed multiple therapies or have limited clinical benefit on them, eventually running out of options due to the lack of innovative therapies in the past decade. Over time, we have seen an increase in the utilization of TAVALISSE in the earlier lines of therapy. This is being driven by our continued commercial efforts, most importantly, increasing physician awareness and understanding of TAVALISSE. As physicians gain firsthand experience with the product, they build a level of comfort before utilizing it more broadly among their ITP patients. All of that said, we have delivered substantial quarter over quarter growth, where we are currently being utilized in the treatment paradigm. And we are excited about the opportunity to increase TAVALISSE usage in the earlier lines of treatment. Turning to Slide 10, in the past, we have shared data on the fragmented and diverse treatments utilized in the chronic ITP market. It is important to note that after steroids, there is no standard of care for second or third line therapy. Late last year, the international working group on ITP, which consist of a global panel of ITP KOL, issued its recommended guidelines. These included TAVALISSE in the same robust evidence category, as the [teepomematics] [ph] and Rituximab for use after first line treatment failure. These guidelines highlight the fact that the heterogeneity of the disease result in an unmet need for novel treatment options in order to individualize the treatment strategy. So alongside the real-world clinical experience of our current prescribers, it is encouraging to have the support of this respected group of thought leaders, endorsing TAVALISSE as a viable treatment option in the second line setting. Well, let’s turn to Slide 11. As discussed in the previous slide, there is an unmet need for novel treatment in order to individualized patient care. We believe that we are poised uniquely in the marketplace to fulfill that unmet need based on our novel and differentiated mechanism of action. We are the only approved agent that limits immune mediated platelet destruction in a targeted manner. This novel mechanism of action is the key differentiator for TAVALISSE within the ITP landscape and drive the unique value proposition to support the use of TAVALISSE to be used preferentially in certain patient populations. Slide 12 highlights data presented at the American Society of Hematology conference in the past December, and it’s a retrospective analysis of patients in our Phase 3 clinical trial that received TAVALISSE as a second-line therapy. Of these patients, 78% achieved a response. This is a similar response rate seen by other agents in this setting. The addition of this data supports TAVALISSE as a viable treatment option in early line therapy, which also may result in increased persistency due to the better prognosis for patients in the study. Up until now, much of our early line usage has been organically driven of early adopters. We’ve seen the benefits of TAVALISSE and their patients, and decided to try it earlier in the early line setting. We can now provide the broader physician community, including non-prescribers with both clinical data and guidelines endorsing utilization of TAVALISSE in the early line setting. Moving the Slide 13. In general, the ITP market is a highly promotionally sensitive space. And we know that educational measures here have a significant impact on a product adoption. With the presentation of the second-line data analysis, we believe we have a more compelling story to share with our physicians. I’d like to just add, we just got back from our national sales meeting, where we trained our team on new material that included the data. And the team is extremely excited and ready to go out there and begin introducing this information to their customers. We’re also excited to see the impact that they’re going to have as they begin their efforts in the field. And so to capitalize on that is, we’re increasing our commercial footprint with the expansion of our sales force from 35 to 45 – excuse me, to 40 territory business managers. This increase will enable us to broaden our reach to our targeted physicians, and more effectively deliver the TAVALISSE message. We are continuing to support these efforts with initiatives focused on driving greater awareness of the value proposition of TAVALISSE such as peer to peer educational events and participation at key medical conferences. In addition to the new data analysis, we will continue to support the product by utilizing data beyond our registrational trials, which currently include case based study, and may include investigator sponsored trials and an observational trial initiating later this year, which will again will provide more details on in a moment. All of which will provide further evidence into the products clinically utility. So in closing, we are position to continue to capitalize on this phenomenal success of the launch thus far. We will leverage the guidelines endorsement and the additional clinical data to continue to build on the momentum for 2019, allowing us to tap into the larger patient goals seeing in the earlier lines of therapy. With that, I would like to turn the call over to our Chief Medical Officer, Wolfgang Dummer. Wolfgang?

Thank you, Tarek, and good afternoon, everybody. As Raul said in his introduction, I just joined Rigel in November 2019. Before coming to Rigel, I’ve spent 11 years at Genentech leading the clinical development of ocrelizumab in immunology, now an approved drug for multiple sclerosis. I’ve also led a number of the Rituxan immunology programs. In addition, I was a VP of clinical development at Biomarin Pharmaceuticals for 5 years, which gave me a lot of insight into rare disease drug development at a world leading company in that space. So taken together, I’m quite familiar with the space that Rigel’s right now. And it was clear to me that we should be a great fit for each other moving forward, and I’m very excited about that. Slide 15. So here are a few things summarized that do make me really excited to be here. Number one is, of course, TAVALISSE, which is our SYK inhibitor with a distinct mechanism of action. This molecule has a broad potential in theoretically many different indication. As Raul mentioned, this product is the cornerstone of our business and supporting its commercial success, we will continue to be a top priority you for my team. That includes maximizing existing data and generating new real growth data in ITP that will help to continue to educate the treating physician. Tarek already mentioned the powerful data from Phase 3 showing that 78% of ITP patients with the point of TAVALISSE when the drug was used to second-line therapy. Following the presentation of this data at ASH in November, we are working to submit these findings and other findings as manuscripts soon for publication in peer-reviewed journals for broader distribution to reach as many treating physicians as possible. Regarding new real-world data generation in ITP, we’re planning to launch an observational study of TAVALISSE used second-line therapy later this year. To better understand, how TAVALISSE is used in clinical practice and further characterized the clinical benefit in that situation. That would generate data streams on TAVALISSE in ITP starting in 2021. Another work stream and top priority of my team is to expand TAVALISSE into new indications beyond ITP. As you heard earlier, we are currently enrolling a Phase 3 trial of TAVALISSE in warm autoimmune hemolytic anemia. AIHA is a real order antibody-mediated block disorder, in which patients suffer from falling hemoglobin and associated fatigue, shortness of breath, all the way down to the risk of heart failure and death. I think this is a great opportunity for TAVALISSE since we know there’s really no FDA approved therapy for disease at this point. Enrollment in this rare disease indications and typically extremely difficult, but I’ve seen that and dealt thorough the situations a lot, especially over Biomarine where we did only trials in the rare diseases, and I’m very familiar how to deal with this obstacle. And as you will see that the program is progressing nicely. I’ll give you a little bit more detail in a while. And while we are driving to completion of the Phase 3 trial, my team has also started partnering closely to the commercial team to prepare for the potential commercial launch of TAVALISSE in the year 2018. We’re also continuing to explore the next indication for TAVALISSE suitable to expand the label, and while evaluating all the possible disease indications where TAVALISSE may work. It is really super exciting to see how broadly this mechanism of action could benefit patients in so many different areas. Looking a little bit further ahead in the future, we have also 2 molecules that are scientifically very compelling, and we’ll have, in my opinion, huge potential. One is our IRAK 1/4 2 of kinase inhibitor. We have a very nice pre-clinical data that shows that inflammatory cytokine production can be inhibited more profoundly with IRAK1/4 dual targeting, over IRAK4 alone inhibition. By targeting these kinases, we interfere with several cytokine that have already been shown to demonstrate efficacy when inhibited with monoclonal antibody, which help you there’s an enormous opportunity in several large indications, but also in some rare diseases. And the other pipeline molecule in a kinase inhibitor that has shown extremely favorable PK data in healthy volunteers, allowing for very convenient dosing options. Just like IRAK, RIP inhibition could find application in several large and small indications, I’ll come back with more details on both molecules later in this presentation. Slide 16, now let’s have a closer look at our ongoing pivotal Phase 3 trial with TAVALISSE in autoimmune hemolytic anemia. As a reminder, we plan to randomize 80 patients, 40 per arm assigned double-blind to be the placebo or TAVALISSE. The blinded study duration is 24 weeks, after that patients can roll over into an open-label extension period. The primary end point is hemoglobin response defined as a hemoglobin level of greater than 10, and an increase of 2 grams per deciliter from baseline There’s also a durability measure, which we will provide once confirmed with the FDA. In our Phase 2 study, we saw 44% of patients achieved such a hemoglobin response. We had not formally set a durable endpoint in that Phase 2, but based on post-hoc analysis from that study, we all optimistic we can achieve that and see a positive outcome in Phase 3. If you look out taken enrollment numbers in this very difficult to enroll patient population you will understand why we are extremely pleased. We have 34 patients randomized so far, 29 of them in the last 3.5 months. And we also close to have all our sites open that puts us in a good position to reach completion of enrollment in mid-2020 and that could give us top-line data by mid-2021. We also think, we are the most advanced in AIHA development and that gives us a chance to become the first FDA approved drug for this disease, which is particularly exciting. And if approved that indication would be a very nice addition to the ITP indication, because really the doctors who prescribe TAVALISSE for ITP, are also the ones who prescribe for AIHA. And that could create obviously nice synergies since the doctors and nurses already familiar with the safety of efficacy profile of this product and we already have using strong relationship with those healthcare providers via our Medical Science Liaison groups and our territory business managers. Slide 17, as I mentioned earlier, we are continuing to work on identifying a mixed indication for TAVALISSE. And there are several very compelling indications that we believe could be a great opportunity to pursue. We expect to have exclusivity for the molecule out to 2032, and we will certainly take advantage of that as much as possible. Regarding our new molecular entities, our IRAK1/4 inhibitor program that is making good progress in the clinic. IRAK1 and IRAK4, as you have heard before, probably our kinases downstream from the toll-like receptor and the IL-1 receptor family. Our lead molecule R835 inhibits both IRAK1 and IRAK4, which enables a more profound inflammatory cytokine inhibition then targeting IRAK4 alone. And we believe there could be a substantial competitive advantage. In several preclinical models, we’ve seen very compelling efficacy data and given the inhibition of cytokines like TNS-alpha, IL-6, IL-23, IL-12. It is obvious that the potential for this drug seems huge to me, both in some very large indication as well as in some rare diseases. We’ve already done 1 healthy volunteer study, in which the drug was generally well tolerated, and we demonstrated proof of mechanism in that study with a successful cytokine inhibition after an LPS challenge. That is a big success in healthy volunteer study. The other extremely promising molecules are systemic RIP1 inhibitor, R552I. The RIP pathway is known to be downstream from the TNF receptor, and is implied in necroptosis in the reviews of damage associated molecular patterns, so called DAMS, that suggests the door should be open to diseases where anti-TNF drugs are effective, or where DAMS may play a role. So once again, great potential in several large indications as well as some rare diseases. We’re currently dose escalating in human healthy subjects with this molecule. And so far, the safety is entirely clean. Importantly, we see a very attractive PK profile with a long half-life of 15 hours, which enables once-a-day dosing, and that makes the compound very competitive in the field. We also plan to select a first human disease indication by the end of the year, and that makes me particularly thrilled. We’re also working diligently in research on a RIP kinase inhibitor that passes the blood-brain barrier and reaches the central nervous system that would allow study in this pathway in neurodegenerative disorders in the future. So overall, lots of option, lots of opportunities, lots to be excited about it. And with that, I’ll hand over to Dean for review of the financial. Dean?

Thank you, Wolfgang. On Slide 19, for the fourth quarter of 2019, we shipped 1,518 bottles to our specialty distributors resulting in $16.3 million of gross product sales. 1,422 of those bottles were shipped to patients and clinics, while 96 bottles remained in our distribution channels at the end of the quarter. As of December 31, a total of 596 bottles remained in our distribution channels. We reported net product sales from TAVALISSE of $13.8, which was recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $2.5 million, our gross to net adjustment, which is approximately 15.4% of gross product sales. For the full year, our gross to net adjustment was approximately 17.5% of gross product sales, our increase in net product sales of 18% from the previous quarter and 90% from the fourth quarter of 2018. Also notable is the progress we’ve made to date, since launch we’ve sold 6,956 bottles, generating $57.7 million in that product sales, which reflects the tremendous growth of our business over the last year-and-a-half. Before we move on from net product sales, let me review our expectations for the first quarter of 2020. Similar to last year, we anticipate a moderation in patient demand growth in the first quarter, as patients work through typical first quarter reimbursement issues, such as the resetting of co-pays and the Medicare donut hole. As a result, we could see total bottle shipped during the first quarter of 2020 to be in line with total bottle shipped in the fourth quarter of 2019. As we move past the seasonality of the first quarter, we anticipate this sequential growth rate to be higher in the second quarter. Incrementally, we currently expect the gross to net adjustment to be approximately 19% in 2020. On to the next slide, in addition to net product sales, Rigel’s contract revenues from collaborations was $1.6 million for the 3 months ended December 31, 2019, which consists of $1.5 million fee earned pursuant to an amendment of the license and collaboration agreement with the Aclaris Therapeutics in October of 2019, as well as deferred revenue from our collaboration with Grifols related to the performance of certain research and development services. Moving on to cost and expenses, our cost to product sales was approximately $178,000 for the fourth quarter of 2019. Total cost and expenses were $32.7 million in the fourth quarter of 2019 versus $35.3 million in the fourth quarter of 2018. The decrease in cost was primarily due to decreases in personnel related expenses and various third-party cost. As we look towards 2020, we expect our total cost and expenses to increase by approximately 15% to 20% as compared to 2019, as continue our commercial expansion and further our research and development pipeline. Also, we recently announced that we received European committee approval of our MMA for fostamatinib for the treatment of chronic ITP in Europe. With this approval, the company received $20 million payment from Grifols, which is comprised of a $17.5 million milestone payment and a $2.5 million creditable advance royalty payment. In addition, $25 million of the $30 million upfront payment we received from Grifols in Q1 of 2019, which had been previously deferred will no longer be repayable by us to Grifols. Given this information, we expect to recognize approximately $43 million as collaboration revenues in the first quarter of 2020. The remaining deferred amount of $2 million, will be recognized as revenue, as we complete certain research and development activities, mainly related to the conduct of our autoimmune hemolytic anemia Phase 3 clinical trials, which we expect over the next 18 months. We ended the quarter with cash and short-term investments of approximately $98.1 million. With that, I’d like to turn the call back over to Raul.

Thank you, Dean. Going on to Slide 21. The growth we achieved with TAVALISSE since launch is just the beginning. As you heard today, we are well positioned going into 2020, to continue to grow our ITP market share in the U.S., especially in earlier lines of therapy. And with the efforts of our partner, Grifols, to launch fostamatinib in Europe later this year, making our product available to adult Europeans also suffering from chronic ITP. Similarly, in warm autoimmune hemolytic anemia is a tremendous opportunity for TAVALISSE, to help patients who currently have no approved treatment option. It would be the first to be approved in this highly synergistic indication, but there’s more to Rigel, although TAVALISSE provides the foundation and the launching point, for what we plan to achieve, we’re also continuing to build an incredibly broad development pipeline based on treating immune mediated diseases. And the opportunities here are immense. We’re exploring additional indications for TAVALISSE or SYK inhibition. And these are likely to be synergistic add-ons to our team on commercial focus. We have programs in both RIP and IRAK kinase inhibitions. And as I mentioned, these are two of the most attractive immune targets in the pharmaceutical industry today. And we have molecules in both of these areas that are near the lead, and we think potentially the best in class. We believe and other pharmaceutical companies seem to agree that these compounds have enormous potential. We expect to both partner and retain substantial positions with these assets to continue to build Rigel into the future. So with that, I’d like to open up the call to your questions.

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Chris Raymond with Piper Sandler. Please proceed with your question.

Hi, this is Nicole Gabreski on for Chris. Congrats on all the progress and thanks for taking the question. Just quick on warm AIHA, it’s nice to see the progress on patient enrollment in the Phase 3. I guess, just based on physician receptiveness to TAVALISSE in ITP, what gives you confidence that docs are excited about this mechanism in autoimmune hemolytic anemia? And then could you discuss how you see the overall commercial opportunity in comparison to ITP, particularly with advancement of other approaches like FcRn and maybe how you see the market evolving, as well as the role of TAVALISSE in it. Thanks.

Thank you, Nicole. I appreciate the questions. I’ll address the first question. May be working Wolfgang can tell us his opinion on AIHA as well. And I’ll say a few words on the market potential and ask Tarek to comment as well. So the reason we know physicians are excited about AIHA is because they told us this. We visited many of the sites already. In fact, many of the sites that are conducting the trial are sites that were previously part of the ITP trial. When we’re doing that trial, we went out and visited many of the sites. And they said to us I’m really excited about fostamatinib in ITP. But there I have a couple options. In AIHA I have nothing, so I’m incredibly enthusiastic about the opportunity there to help those patients, because I have nothing for those patients. So they were very encouraging then to help us launch a new trial in AIHA. And I think that continues to be the case. I think we remain very excited. The clinicians involved remain very excited. Wolfgang?

Yeah, I can add a few points to that. So as Raul has said, there is really nothing approved in [new] [ph] standard of care in this indication. We are conducting a well controlled – placebo controlled trial. We will have a – and we think about this really carefully and use all the experience that we have from ITP. We will have a very proactive data analysis plan that analyzes everything that can be analyzed on this trial from a very high bar, endpoints to – endpoints that cast a net wider. But still they must raise a clinically-meaningful result. So we believe that we can have a very compelling data package right out of the gate at launch. And the other thing is as I speak with these physicians and as I look into the enrollment in the study. There is really a lot of enthusiasm among those folks. And I think that enthusiasm that we see in the clinical trial can definitely translate into the real-world [indiscernible].

Hey, Nicole, on your second question, we think the market opportunity here is quite substantial. We think there’s somewhere between 40,000 to 45,000 patients with adult warm autoimmune hemolytic anemia in the U.S. for example and maybe a quarter little more than a quarter of those, would be the addressable market using kind of the ITP numbers as kind of a benchmark. So it’s a really attractive opportunity. Currently, these patients have steroids. Some use of rituximab not approved. And then, they have nothing. They have to look at splenectomy as a possible approach, which many of them prefer to avoid. So we think it has tremendous opportunity. A little bit smaller in terms of patient size, perhaps than ITP, but without the availability of various other agents, I think the market opportunity for Rigel is potentially much larger even than ITP. So I think that’s the very exciting marquee potential. Tarek?

Yeah, so thank you, Raul. So I think also just to add on, Nicole, I think as we see kind of the story evolving, I think in regards to hemolytic anemia, we believe we’re poised to take advantage of it. And so, as Raul articulated, the desire if you can imagine to move away from long-term steroid use or perhaps some of the other agents that are currently used right now in the treatment armamentarium are just not ideal in terms of managing this disease, which is a long-term management strategy. And in particular, obviously, this is a pretty symptomatic disease, when you have a low hemoglobin, and so, the desire for therapeutic quite frankly with the profile of fostamatinib of TAVALISSE is quite high. And so, I can tell you in our national market research and landscape work as well as our advisory board, the clinicians really see the profile TAVALISSE fulfilling this unmet need, so we’re extremely excited by the receptivity of this audience.

Thanks, Tarek. I wanted to just make a quick comment to fully answer your question, Nicole. There are other molecules that are in development, mostly earlier developments than ourselves. But we have 2 really important advantages. Number one, we’re the furthest advanced in clinical trials, the only company that is in the middle of a Phase 3 pivotal program for AIHA. That’s a tremendous advantage. We’ll be the first to have a Phase 3 approved, the Phase 3 filed, and hopefully a Phase 3 approved by the FDA and launched. The second substantial advantage we have is a built-in audience in physicians who currently treat patients with more autoimmune hemolytic anemia that already will have familiarity with our product TAVALISSE, have been using it in a different indication ITP, who know how to dose regulate, who know how to manage the product well. And that’s an advantage that no one else has, so we bring 2 very distinct and important advantages to this area, that I think we’ll work to capitalize on.

Great. That’s very helpful. Thank you.

Thanks.

Thank you. Our next question comes from the line of Yigal Nochomovitz with Citigroup. Please proceed with your question.

Yeah, hi, good evening. Thanks for taking the question. Are you able to provide at this point some more specifics in terms of the market share that you have in the various lines of therapy? I know you’re moving into earlier lines, but I’m just wondering if you have some more specific numbers there for the second through the fifth line in ITP.

Certainly, so this Tarek. I’ll just answer that question. So I think at this point, we’re not providing any specifics of in terms of market share by line of therapy or overall. Suffice to say that in 2018, obviously, with our 6 months in the marketplace, we were primarily being used as I mentioned in the later lines of therapy, and saw a great uptake there. And as 2019 has devolved, what we’ve seen is overall for the entire post-steroid ITP landscape, our market share doubled actually from the end of 2018. And so, we clearly have a lot of opportunity in terms of penetrating those early line patient pools. But we’re happy to see the momentum in terms of just the overall share of the landscape that we’ve been able to accomplish today. Clearly, it’s still early and we’ll be monitoring it. And we’re excited about what 2020 brings.

Okay. Thank you. I’m just wondering if you could comment a little bit more on this persistency rate for the refills, as you noted, it’s 54% at month 4. I’m curious if you can provide anything in terms of what that persistency rate looks like at months further, months 5, 6 and 7, things like that? And then relatedly, if you can provide the average treatment duration, because the treatment duration commercially – is a slightly different statistic from the persistency rate at month 4, as I understand.

Yeah, thanks, Yigal. I think on the persistency that 54% is a really useful metric for us, because we wanted to know and what you do a clinical trial like we did with the Phase 3 trial RIP program and you get certain results out of them, that’s fine. But that’s quite distinct from what we think clinical practice would be like and this data verifies that. As you recall, we were at 45% persistency at month 4 a little over year ago. And the year progressed last year, we went to 50 and now at 54, so very good continued progress in that. And like I said, there’s 2 major reasons for that. One is, doctors now using the product in less refractory patients. And just frankly just being better at using it, knowing how to dose regulate, knowing how to manage some ease that they see those things, and so they’re getting better. And in both of those circumstances, we expect the persistency to continue to climb slowly over time that’s certainly going to be the case as we move into earlier lines of therapy, as Tarek shared as well as doctors continue to use the product and even though we’ve been on the market for a little over 18 months now. Many doctors don’t have that much experience still. There’s still a large group of doctors that have not used the product substantially, and they’re going to continue to improve and how they use it. And so to try to answer your former question, your question is in terms of the longer term. The patients that had been on drug for longer, a year or so or more, are very of refractory, they’re reflective of the initial patient population that we addressed when we launched the product. So they’re really not reflective of what we think the end population of these patients would be, that is a mixture more – much more less refractory patients. So it’s a little bit on – I think, once we reach some form of stability on that, that might be a useful metric to be able to provide. And in terms of your treatment duration question, let us look into that, I don’t have that but let us look into what that might be, because it certainly will be dependent on the line of therapy. And we obviously expect patients with earlier lives of therapy to have longer durations as well. But let us come back.

Okay. Sure. And then my last question is obviously there’s a heavy overlap between ITP and AIHA in terms of the prescriber base. But I was just curious, are there any key differences between ITP and AIHA that you need to be aware of to launch AIHA successfully.

I’ll add – in terms of differences, if you mean medically? Or do you mean market wise?

Just in terms of the market wise? Yeah.

Yeah. So this is Tarek. So I can clarify at least our current understanding. So obviously, we’ve some time from a pre-launch perspective, and as Wolfgang articulated his organization as well as the commercial organizations are putting down the foundational work to ensure that we have a path forward for successful launch. All of our data, thus far as well as our engagements and research indicates that the individuals, as was articulated that treat ITP are also carrying the patient loads in the community. So this is also still a community treated disease, so much like we’ve shared statistics in the past about 90% of the ITP patients being treated in the community. We see that same phenomenon for warm hemolytic anemia. We’re not seeing any sort of referral patterns or dynamics that changes how we operationalize and execute from the launch strategy perspective. Again, it’s really the same prescriber base, managing the same roughly proportional case loads. And so, I think, there’s just a lot of synergies and parallels quite frankly due to how we’ve been successful hitting the market in ITP. Hopefully that answers your question.

Yigal, I can make a comment and further to that. In addition, we launched the ITP, we are very happy with the performance there and we’re going to do AIHA much better even. We know a lot more now. We’re better prepared. We have more of the individual functions within the company here thinking about how we’re going to launch the product what data we need to be the most effective in the launch of the product and while we did a great job in ITP. We’re going to do a better job in AIHA.

Okay. Thanks for taking the questions.

Thank you. Our next question comes from the line of Tessa Romero – JPMorgan. Please proceed with your question.

Hi, guys. Thanks for the update here and taking our questions. A question from me actually on autoimmune hemolytic anemia. Are you able to provide a little bit more context around how the primary endpoint for the safety was chosen having both durability and also a hemoglobin component versus what was used in the Phase 2? I suppose, I’m getting how you’re thinking about what it’s clinically meaningful in this patient population? And then I have a follow-up.

Great. Thanks, Tessa. I’ll let Wolfgang, if you would.

Yeah. So I would see the components for endpoint selections are relatively straightforward. So obviously, these are characterized by our decreasing hemoglobin. So what we need to show is an increase in hemoglobin, and some sort of measure, how that increase is sustained, right? And there is a various ways to do it. We have, of course, an idea of what we want to do and we have put that into our analysis plan. We will make this – at some time with the FDA. We have time to until database lock to provide the final data analysis. And we are collecting the data in a way, that allows us to depict data in multiple different ways. So it’s – we will proactively describe multiple different ways of analyzing the data and regarding the primary endpoint, we have one pre-specified and we are confirming it with the FDA.

Okay. Great. Thank you. And then, I guess, bridging from a prior question, I just wonder from your research, how many patients have been identified globally? I think, you gave the U.S. number, but I was just curious on the global number? And then, how you’re thinking about the geographies for the disease? Thanks.

Sure. I’ll try to answer that. Interestingly, the – in AIHA, what we believe, others believe is that the prevalence rate is similar in all countries. So obviously, Europe would be most likely the second largest market in terms of the size of those patient populations and probably in terms of dollar value as well. Our partner, Grifols; our partner, Kissei, in Asia, Japan; and our partner, Medison, all have rights to AIHA as well as ITP. It’s all within them. And so the same synergies that we’re discussing here in the U.S. between doctors who treat ITP, it’s being the same doctors that treat AIHA exist in Europe, Canada, Japan, et cetera. And so it’s the same synergy. So I think that will help being the launch of the AIHA indication quite substantially. The treatment paradigms are not different in other countries as in the U.S., so all of that is very transferable. In ITP, we think that the market in outside the US, a little bit smaller maybe $900 million relative to a little over a $1 billion in the U.S. for ITP. It’s likely that the market in Europe kind of mimic what the market might be in AIHA, tremendous opportunity outside the U.S. maybe comparable to the U.S. opportunity. More patients perhaps lower prices, so.

Thank you. We’ll move on to our next question which comes from the line of Joseph Pantginis with H.C. Wainwright & Co. Please proceed with your question.

Hi, guys this is [Pascal Denis] [ph] from the line of Joe. A few questions on my end. So I was wondering, for the European commercialization plan. Can you give us more color on the country by country basis commercialization strategy for TAVALISSE. And specifically, which geography would make more sense in terms of potential TAVALISSE adoption?

Sure, Pascal. This is Tarek. I’ll take that question, and then, obviously, I asked my colleagues to weight in. So in terms of their go to market strategy in Europe, we’re really not commenting on the exact approach that our partners cripples since they have not publically share that. However, as you’re well aware and many are as well, they’re looking obviously at some of the big larger markets such as Germany and the UK, as is commonly seen in the industry, where you can get favorable pricing, have larger patient populations. And then from there sequentially have a strategy to some of the other countries in the big 5 markets. So we’ll defer to our colleagues and Grifols to in more detail provide explicit country by country timing, but that’s at a high level the general approach. Raul?

Yeah. The only thing I would like to add to that is that with the attractive – while we were so attracted to Grifols, as our partner in Europe. Is that they currently sell IVIG throughout Europe. And IVIG, as you may know is used as a rescue medication in the treatment of ITP and AIHA. And so they know that physician audience is very well that are the targets for TAVALISSE in both of those indications. We made them the ideal partner [tuzimab] [ph], they had really fantastic infrastructure in all the large European countries, and that means a very attractive partners. And so – and I can honestly say and I’m speaking for Tarek and the rest of our commercial medical affairs team. We’ve had excellent engagement with them, excellent collegiality with our Grifols colleagues in making sure we help them as much as we can in getting the best launch in Europe. And I’m absolutely confident they’re going to do a stellar job of it. And you’ll hear from them exactly in the details, but we’re incredibly confident in their ability to do so and delighted to have them as our partner.

All right. Thank you so much. That’s very helpful. Another question for me. So we respect to TAVALISSE label expansion besides AIHA. Can you elaborate a little bit on what indication would be more clinical and markets sense, please?

Yeah. So as you can imagine the number of indications where TAVALISSE may work is actually huge. Having worked at Genentech, I think of TAVALISSE, a little bit about the early days of T cell depletion. And if you look over the last 16 years, where T cell depletion has expanded to not naming the name of the drive, but T cell depletion [Multiple Speakers] so the options are enormous. Now we have worked a lot to narrow this down to a number of indication. Obviously, there are more indications that we can pursue from a research perspective, will be nearly down to about 3. Where we believe we have data to suggest that it works. And we have – there’s already data available in chronic lymphocytic leukemia, where we have a paper out of 2010 that has shown pretty compelling efficacy for SIK inhibition. And that is one option. The other option that we’re considering is graft-versus-host disease. We have an AIHA going on that has some very interesting preliminary data. And then we also exploring a few indications there’s a maybe not as related to a hematology is the other 2 one of them is for example myasthenia gravis, where we think we have a very good scientific case that that might work. And so whatever we choose is going to be a combination of where we see the biggest opportunity how quickly can we pull it off what the costs and how well does it fit into our portfolio. So – but we are pretty close to selecting one and want to get this going this year.

And [Pascal] This is Tarek. I’ll just add it. As Wolfgang’s alluding to. Clearly, there will be a preference to be able to have a bolt-on into our current commercial and medical infrastructure. We have the boots on the ground and know the customers quite well. But obviously, we’re going to select the one that holistically best serves the organization. So I think it’s exciting and as Wolfgang articulated to have a wealth of options to entertain.

That’s very helpful. Thank you so much. Last question of mine. So thinking about the recent approval of [Depthalon in CITP] [ph]. How these approval would impact TAVALISSE market share?

So why don’t I take that on first. So this is Tarek again. So at least early indications of the adoption and what we’re seeing and hearing from customers, is really the primary strategy of that compound is to cannibalize and quite frankly go after the current market share of eltrombopag, the other oral [teepomematic] [ph] in the therapeutic class. And so there are really a little bit of kind of head to head trying to go after each other in terms of market share capture, based on attributes of the product. What we are not seeing is physicians selecting that agent over TAVALISSE, because quite frankly I think as we’ve articulated, based on a number of factors, we have a very unique value proposition of why a patient or a physician would want to be on our product. And so, I would say, obviously, this could change, but to date it’s been minimal impact to prescribers in terms of their selections for TAVALISSE and much more of an impact in the [teepomematic] [ph] space.

That’s very helpful. Thank you so much for taking my question.

Thank you. [Operator Instructions] Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi, good afternoon and thank you for taking my questions. The first one is for chronic ITP, given that TAVALISSE has this differentiated mechanism than other therapies, have you heard of any combination used in the commercial setting or do you expect this could become an option as generics may come to play for some of the other therapies?

So, certainly, yes, so there’s certainly been a keen interest and I would say almost an academic and scientific interest of a combination therapy. But given that the mainstay of therapeutic-approach in this disease categories has been monotherapy, I would say that is really kind of the clinical environment as well the payer environment, in which most of these clinicians operate. And so to answer your question directly, we’ve seen very little combination therapy that we’re visible to in terms of TAVALISSE, certainly as for certain patients, particularly those that are in crisis or, frankly, with very low platelet levels. There might be bridging strategies, where therapies overlap, which is not unheard of for diseases like ITP, but in terms of overt combination use, that just not a being or a phenomenon that we’re currently seeing in terms of the commercial usage of the product. I’ll differ to others here about thoughts in the future from an investigational standpoint.

So I think that we completely agree. I don’t think there’s a lot of, at this point interest in exploring that. It’s more an academic and we do asked that question substantially. But the answer is not a lot in actual practice.

Okay, great. Thank you. And then for warm AIHA, you discussed the persistency rates and the refill timelines of 4 months for chronic ITP. But given that for warm AIHA, there are no approved therapies. What are you going to be looking for in the Phase 3 trial to help with your discussions on this topic in terms of guiding physicians, should it be approved in this indication as well?

Yeah, let me answer that, but I’ll ask Wolfgang to also comment. It’s very interesting that we have a primary endpoint that’s important and useful for approval and for the FDA’s evaluation. But in practice out there in the real world, it’s sometimes you need different and additional metrics beyond that. And so, we’re making sure that we include those within the analysis plan and the protocol for the Phase 3 trial to allow us to have exactly that wealth of data, to launch the product successfully and provide clinicians the information that they need on the use of the product in AIHA that will help them understand how best to use it and how best to succeed with it. Wolfgang, do you have any comments on it?

Yeah, I mean, it’s always the best guidance to have data to prove what you want physicians to do. I guess, the object in a disease like AIHA or first of all increasing hemoglobin levels from where they are too low, then make sure you maintain those increase in hemoglobin levels. But there’s also – we’re also looking at how many patients do we prevent hemoglobin decrease. So it’s very, very conceivable to believe that a patient stays stable and there is a treatment effect of TAVALISSE, while placebo patients may drop down. So any would – so something that would lead us to say, look, the natural history in AIHA is such that the hemoglobin goes down over time, but we show you data that hemoglobin stay stable or stays us. And then another thing would be for example can be sure that physicians can spare some steroids, use lower steroids at some point. That would also be a very valuable outcome if you could say the patient stay stable on TAVALISSE and the tolerable steroid dose of less than 10 milligrams per day or less than 5 even. So all of these things together would determine what we are telling the physicians how to use this drug.

The only thing I would add to that as well is just to remind you, the 80% Phase 3 study, really Herculean, no one has ever attempted that before for us. And we’re well on our way to getting that completed, but in addition to that, we also have the long-term extension study. And what we hope to do out of that study is to follow as many of these 80 patients on over the long term, at this point all on fostamatinib, TAVALISSE, and be able to understand how best you continue to have that use and provide that data over the longer term to our customers, so that they understand the benefit of the product. That’s something that is very valuable. Much like with ITP, we’ll have that data. We’ll continuously publish on that data and provide updates. So it really provides a wealth of information. Now, that we’ve built this 80-person clinical trial. We want to make sure we continue to follow and derive as much value out of it as possible.

Okay, great. Thank you for taking my questions.

Thank you. There are no further questions at this time, so I’d like to turn the floor back over to Mr. Raul Rodriguez for closing comments.

Well, thank you. I appreciate your questions. 2019 was a fantastic year for us. We really did all the things that we set out to do early in the year across the board; increased the availability of TAVALISSE to our audience, our patients; expanded overseas with great partners; launched a very difficult challenging trial and now execute well on that in AIHA; and then, build the pipeline with 2 additional molecules that really are just fantastic additions to the pipeline. It was a fantastic year in 2019. And in 2020, we have equally high and aggressive challenges for us to achieve. And I’m absolutely confident across all these areas that will execute really well. And thank you for your help in helping us do that.

Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.