Roivant Sciences Ltd. (ROIV) Q1 2022 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Roivant 1Q 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Paul Davis, Head of Communication. Please go ahead.

Good morning, and thank you for joining today's call to discuss Roivant's financial results for the quarter ended June 30, 2022. I'm Paul Davis, Head of Communications at Roivant. Presenting today, we have Matt Gline, our Chief Executive Officer. For those dialing in via conference call you can find the slide being presented today as well as the press release announcing these updates on our IR website at www.investor.roivant.com. We'll also be providing the current slide numbers as we present to help you follow along. I would like to remind you that we'll be making certain forward-looking statements during today's presentation that reflect our current views and expectations, including those related to our financial performance and the potential attributes of our products and product candidates. We strongly encourage you to review the information that we filed with the SEC, including the earnings release and Form 10-Q filed this morning for more information regarding these forward-looking statements and related risks and uncertainties. We'll begin with Matt Gline, who will review key business updates across Roivant in advance, and provide a financial update. We'll end the call with a Q&A session. With that, I'll turn it over to Matt.

Thank you, Paul, and good morning, everybody, and thank you for joining our first quarter earnings call. Today's call will be a little bit shorter than usual because we last got together about six weeks ago, when we presented our year-end results. So I'll begin on Page 4 and I'll take you through some of the key highlights of the business today and then we'll make some time Q&A. So as a reminder, we're excited about where we are at the end of our first quarter this year, with obviously a number of important attributes, including the ongoing commercial launch of VTAMA, which we will spend a little bit of time on this morning, that is backed by a broad clinical stage pipeline, including multiple pivotal and registrational study is currently ongoing. Our chip-to-clinic discovery program, including our proprietary QUAISAR platform that we are using to bolster that pipeline at the discovery stage, a number of sources of asymmetric potential upside, including our Genevant IP portfolio. And all of that supported by what continues to be a strong capital position with $2 billion in cash and cash equivalents and restricted cash, which enables us to finance and develop all of our programs across our pipeline. So I'll start on Page 5 with a brief update on the VTAMA launch. And I'll say, first of all, I'm incredibly pleased with the very early information here. Obviously, as we've said on a number of occasions, we are principally tracking prescriptions at this time and we feel script volume has been robust in the early days of the launch. Obviously, it is still the early days. We're only a couple months in, but we feel the script volume and the early feedback from providers has been very, very strong. There are a few key updates in recent weeks around this launch. The first is that our LTE data, our long-term extension study data has been published in JAAD and that highlights the 130 day remittive effect off-therapy for patients achieving a PGA of zero on VTAMA that's something that we've talked about a fair amount before and it's something we think is an important differentiating attribute of the drug. We also have noted that our Japanese partner reported positive Phase 3 data for tapinarof in atopic dermatitis, including statistically significant results in IGA and EASI, with plans to file that for approval in Japan. And finally, our own Phase 3 study in atopic dermatitis is expected in the first half of next year, which would extend our market to potentially $15 million annual topical prescriptions. And then this is from the data, we're excited to know that we've become the number one most prescribed branded topical for psoriasis as of eight weeks into our launch. So on Page 6, I'll note, again from a script volume perspective, we are excited about how we are performing relative to other topical launches that we've seen in psoriasis. You can see a number of those launches in the solid lines here and we feel proud of our early performance. I think it's reflective of the enthusiasm around VTAMA. We also feel excited about the fact we are approximately keeping pace without OPZELURA, that's the dash line on the slide, which is obviously in atopic dermatitis, a market about 4 times as large from a prescription perspective as psoriasis. So again, early days, but an exciting indicator for us. And just as a reminder, we really are principally focused on prescription volume at this time. The quarter here is only for the really one month or about a month of launch data for VTAMA. So the revenues are not significant, but we're focused on prescription data as we work through our coverage and contracting. And as we said, it will be about 12 months to 18 months before we expect those contracts to be in place. On Page 7, I just want to remind people of a few key attributes around VTAMA and the attributes that we think will support our blockbuster potential in both in psoriasis and potentially ultimately an atopic dermatitis. We have the efficacy and durability that we need and maybe most importantly we have this off-treatment remittive benefit that we've talked about a fair amount. We have a broad target population with a label that is used across the entire psoriasis disease spectrum from mild to moderate to severe. We have no warnings or precautions at all, nor do we have any restrictions or notes about concomitant medications on our label. We're labeled for use on all areas of the body and notably that includes in our intertriginous areas. And something we've talked a little bit less about that I'll remind everyone on this call, we have statistically significant improvement in itch as early as week two in our strategy data. So on Slide 8, I put that itch data in the presentation so that we can just look at or remind us of the data. You can see the data across the two studies here. And one thing I'd like to call your attention to is that we saw a statistically significant separation from vehicle on impact on itch as early as week two in our studies. You can see those P values on the slide. And notably this comports with some of the early feedback we're getting from prescribers and patients, which is to say that overall, I would say one of the early attributes that we're hearing is that the drug is working faster than people expected and we're obviously pleased to hear that from the field. So I'll close on VTAMA on Slide 9, just to update our differentiation profile versus the field for psoriasis. Obviously, one of the main updates here is that ZORYVE was approved recently and so we've updated this chart accordingly. And you can see, we feel we have a truly differentiated profile. We are among the only topicals to have an on label remittive benefit. We continue to be pleased with the fact that we have no duration limitations, no body surface limitations, including no limitation against in the intertriginous regions. We have no safety or safety warnings or precaution section on our label and then we have no label drug interactions and no contraindications as well, which is something that's differentiated versus some of our competitors. So with that, I'll move on from VTAMA. I'm sure we'll touch on it in the Q&A section as well. And I'll talk a little bit if you jump forward to Slide 11, about where we are from a clinical perspective with all programs backing that up. We're showing here a subset of our pipeline. We're focusing on some of the most important and latest stage programs. Notably including our VTAMA study in atopic dermatitis that I mentioned before. We also have now begun our Phase 3 program and Brepocitinib Dermatomyositis and we have our ongoing program and Brepocitinib lupus that I'll talk about in a moment that's going to enroll as last patient any day now? And then, Brepocitinib, there have been a number of updates that we have put out recently, including the fact that multiple of their pivotal trials are initiated and indications that we think could be blockbuster indications for Brepocitinib. So we're looking forward sharing more about that generally as those programs progress. You can see on Slide 12, some of the sort of features of our current clinical positioning, including the fact that by the end of this year we will have seven trials, including four pivotal trials ongoing, with multiple -- with progress across multiple fronts, I won't talk about each of the individual studies here. And we expect three additional or more additional initiations of programs in 2022, notably including that we've already initiated, as I mentioned, the programs in Brepocitinib Myasthenia Gravis, we expect to be initiating Thyroid Eye Disease imminently. The last thing I want to do on this call before I turn it over to Q&A is we went through the most recent addition to our pipeline, brepocitinib with Priovant last quarter of the year end call earlier this summer. But I just want to reiterate some of the features of that program because it's a program that we're very excited about in our late portfolio and because as I mentioned before, we are expecting the final patients to enroll in our lupus study any day now and we think that'll be an important catalyst for us next year and so we wanted to continue to draw attention to that programs. So Brepocitinib overall as a reminder is a unique dual targeted first in class TYK2 and JAK1 inhibitor, which we're developing for a variety of specialty autoimmune diseases. We think that dual inhibition of TYK2 and JAK1 is scientifically important because we think it will potentially provide greater efficacy than agents that inhibit either one alone, in inflammatory autoimmune disease where both pathways are relevant and where the interaction between the pathways is relevant. We have extremely robust -- as a reminder, this program won licensing from Pfizer and announced in the last call, we have extremely robust clinical data, statistically significant clinically meaningful benefits in five placebo controlled studies demonstrated to date in our oral formulation, including exposure of over 1,000 subjects with a safety profile consistent with approved JAK inhibitors. We have -- we think a distinctive strategy to develop the program, including development in a series of uncrowded orphan and specialty autoimmune diseases, where there's high morbidity and mortality, where there's high unmet need and where we think the science of our drug, the dual inhibition of TYK2 and JAK1 will contribute directly to efficacy. We have two ongoing registrational programs, including a single registrational Phase 3 study in dermatomyositis that we've already initiated as well as a large global Phase 2b study of lupus that's expected to complete enrollment this month with data expected in the second half of next year and that's designed to serve as one of two registrational studies in that indication. And then finally, we have strong intellectual property protection. So on Slide 14, I don't think I need to remind people in great detail, but SLE is an important disease with obviously many, many patients up to 300,000 people in the United States affected by it. And there's significant unmet need and obviously a disruptive and difficult clinical presentation. There are not very many approved therapies that work well and those therapies are commercially successful and provide important benefit to patients, but with significant move beyond. On Page 15, a reminder of a little bit of the rationale that we have for why we think this drug will be exciting in SLE. And that's first of all, there is data from a number of JAK1 or TYK2 inhibitors in SLE and in both case is we see signs of efficacy, but with significant room with improvement. So you could see on this slide, the placebo adjusted response week 24 on the left hand side from a Phase 2 study of Baricitinib in SLE and you can see a nice response there as well as the Phase 2 study on the right of Deucravacitinib, a TYK2 inhibitor in SLE. And again, you can see a nice response there, but there's obviously significant room across both of these for improved overall efficacy. And again, we think that we have the opportunity with Brepocitinib to improve on both of them. One of the rationales for that, one of the reasons we think we may be able to do well on Page 16 is there are a number of existing indications where we have data in both Brepocitinib and either deucravacitinib and baricitinib or both. And you can see that data shown here we are not currently prosecuting any of these indications of Brepocitinib, but to give you a sense of just how significant our efficacy has been across multiple studies with the drug. And that makes us excited for what we expect we might be able to see in this SLE study. So you can see on Slide 17, the design of that study, as I said, we're expecting our last patient to enroll any day now and it's a 52-week study with a couple of different dose arms and so you can see all of that on Page 17. So with that, I'll wrap up on some of the specific updates. I'll note on the next slide, Slide 18, just we are having and we've announced our Annual Roivant Investor Day will be on Wednesday, September 28, at 11 a.m. So more details to come about that and we're excited to hear from many of you then and we're excited to share a number of key updates around the business, including R&D updates and others at that event. So I'll close and obviously, the market continues to gyrate, but even with some little green shoots. Just to say, we are extremely privileged from a capital position perspective. If you jump forward to Page 20. I was pointing out some of the key financial items for the quarter. So we have R&D expense of $136 million or adjusted R&D non-GAAP of $123 million. SG&A of $149 million or adjusted non-GAAP of $88 million. For a total adjusted net loss of $354 million or an adjusted net loss of $211 million. Our cash and cash equivalents and restricted cash stayed at about $2 billion for the quarter, which we think is important for being able to support our activities. We have balance sheet debt of approximately $417 million which only $33 million is sort of a standard credit facility with the carrying value of $33 million and then the remainder are milestone or fair value of royalty obligations related to VTAMA. And then we have 703,625,000 common shares issued and outstanding as of Friday. So finally on Slide 21, I'll just remind everybody, this is an incredibly catalyst rich period for our business. We've obviously regular ongoing updates on VTAMA, as well as new mid and late stage in licensing that's ongoing currently and then excited to provide updates on – we’ll continue to provide updates on our LNP patent litigation at Genevant as we have them, and continue to provide updates on QUAISAR on our degrader discovery efforts as we have them as well. In addition to that, we'll be initiating multiple pivotal programs, I've mentioned some of these on this call. We'll get topline data from a number of pivotal programs within the next 12 to 15, 18 months between VTAMA and Brepocitinib. We expect potential data from RVT-2001 in our Phase 1/2 trial, low-risk myelodysplastic syndrome next year and we continue to work towards data on other programs as well. So an exciting period of execution for us. Looking forward to connecting with everybody on our Investor Day and looking forward to continue to track many of these things, including the VTAMA launch in the weeks and months to come. So with that, I'll conclude my remarks for the day and I'll open the line for Q&A and hand it back to the operator.

[Operator Instructions] Our first question comes from David Risinger with SVB Securities. Your line is now open.

Great. Thank you very much and thank you for the updates. So I have a few questions. First, could you talk about the expected ramp of VTAMA going forward, particularly in the face of competitive dynamics? Second, could you discuss how you're thinking about gross to net over the next couple of years, particularly relative to Street expectations and what you're seeing from the sell-side? And then third, could you comment on the cash burn in the quarter and remind us about your cash runway? Thank you very much.

Thanks, Dave. Thank you for all those questions, they're all good questions and I'm happy to take them. So I appreciate it. I'll start with VTAMA question, which is, early in the launch to make long term projections on a ramp. We are pleased with the early prescription data and we think it sets us up well. We're pleased with the engagement we had with patients and physicians and with some of the early feedback we're getting on the drug. So all of that reads well. You asked about competitive dynamics, the first thing I'll say, which I think is an important point that we're just going to reiterate over and over again is, we don't view this as a competitive market versus other novel agents first and foremost. We view it as a competitive market versus corticosteroids, where there are literally millions of people on corticosteroids for psoriasis or literally millions of prescriptions for corticosteroids and psoriasis. And we think we have better efficacy and better tolerability that should allow us to take significant share from that whole category of agents, which is currently the standard of care mainline therapies. So that's the first thing I'd say. As far as the competitive landscape is concerned, yeah, I think there's a -- we obviously have a new topical competitor now on the market in ZORYVE. It's a drug that has some nice attributes. We think we are differentiated meaningfully between our remittive benefit and our overall more simple safety picture without contraindications or restrictions on concomitant meds. That's why we also think more voice share in novel topicals for psoriasis is helpful. We think there will be a little bit of a rising tide effect overall. So I would say given the population that we're going after, I'm excited about our ramp and I'm not too concerned a competitive perspective. And I think as you see some new impressive systemic agents coming, I think it will be even more important to folks like payers to have a real off ramp, to have a real opportunity for people to stay on topical therapy versus moving to some of these, what I expect with very expensive systemic agents or new biologics. So I think that will also provide a good opportunity for us in the marketplace. Second, on gross to net dynamics and sales expectations. I guess it's a great question. It's an important topic. Just to be very clear about it, our expectation is that our gross to nets will be -- or gross to net yields will be low for the next while here, we've said 12 months to 18 months to commercial contracts. I think as far as Street numbers or consensus, I won't comment specifically, but I'll just say it’s important for us to say over and over again. We think gross to net yields are going to be low during the period when we're contracts in place and we think they'll normalize only after we have those commercial contracts in place and payers are converted from uncovered. And that's a function we've talked about this before. It's a function of things like the new to market blocks that make it difficult until those contracts are in place. We are learning every day from the marketplace, including looking at formulary positioning for couple of people that have gotten for us and watching what that looks like. And we're just excited to see where those discussions shape out and we'll provide an update on contracts when we had it. And then, the last question on burn and runway. I think we've said this before, but it's an important point. We always look to run the business with about two years of runway or I should say visibility into about two years of runway. We have a pretty broad portfolio, so it's very easy for us to optimize to extend our runway, to manage our runway. And so I'll say we continue to run the business. With that in mind, we have lots of options to extend runway including partnerships delaying or terminating lower priority programs, et cetera., as well as monetizing stakes across that portfolio, things like Datavant that doesn't depend holding that we're constantly looking for opportunities around. So we are excited about that. I'd say you may see some swings in our sort of working capital over the last couple of quarters or next quarter just as to finer (ph) off royalty financing works its way through. But I don't think that's going to have any meaningful effect on long-term burn. So thanks, Dave. I think that covers the three questions there.

Great. Thank you.

[Operator Instructions] Our next question comes from Dennis Ng with Jefferies. Your line is now open.

Hi, guys. Thanks for taking the questions. Two for me. First on VTAMA (ph), can you please give some more granularity on the launch, in terms of who and where it's being prescribed? Are you seeing it from mild and moderate? And maybe talk about how penetrated are those accounts that you guys are currently in? And then secondly, perhaps on Proteovant, you guys mentioned that you had an AR [Technical Difficulty] that is and when can we expect the mix? Thank you very much.

Yes. Thank you, Dennis. That's both good questions. So I'll start on the VITAMA question. We've seen, I think, we mentioned in the Slide 6, 3,000 people write VTAMA prescriptions. We've been focused early on the sort of highest prescribing docs, the docs who write a significant percentage of topical prescriptions and who are the general thought leaders on novel topical agents. We've seen multiple -- many docs have written multiple prescriptions and obviously there's some concentration there. And then there's a whole population of doctors even in that high prescribing population that we're still getting out to and still getting our best readout too. So I think there's a lot of room to run there. We have not sort of focused on a specific severity band within those docs. And so we don't have a specific strategy as far as these severity or sub-setting the patient population. I would say, we get reports in the field from a variety of different patient populations, including mild patients who didn't like being on steroids, but also including reports from severe psoriasis patients who, for example, were on the cusp of using a systemic agent and have been pleased with their VTAMA experience in ways that may forestall (ph) that for them. So it's been a pretty broad, a pretty broad patient population and a lot of interest in the drug from across the spectrum. Again, we're pleased with both the number of prescriptions and the number of unique prescribers. And then your second question was around the androgen receptor degrader. I think we're still looking at that program both our data that we're sort of getting the final wisps of, in our competitor data and to be honest, it's the kind of program that we're watching closely in the context of the recent drug pricing legislation. So I would say, the bar for that is high and we're still sort of evaluating our options there and we'll provide an update when we've got one. But I appreciate the question. Thank you, Dennis.

Thanks.

[Operator Instructions] Our next question comes from Neena Bitritto-Garg with Citi. Your line is now open.

Hey, guys. Thanks for taking my question. I was just wondering, if you could talk a little bit more, Matt you just mentioned that you are seeing some docs write multiple prescriptions. If you could talk a little bit more about just the general prescriber behavior you're seeing. Are you seeing docs generally prescribed to maybe one to two patients first, see how things go with those patients and then kind of opening up their broader population of patients? And then also any initial kind of feedback or anything you're hearing on folliculitis? That'd be great. Thanks.

Yeah. Thanks, Neena. So those are both -- it's a great question overall and both parts that are good. I don't -- we don't have specific data to share right now on whether docs are kind of dribbling out or not. I would say anecdotally, we have a pretty wide variety of prescriber behaviors from fruit believers who -- we’re shooting out of the gate and continuing to shoot to facts who have become more and more enthusiastic about the drug as they've had positive patients experience. I think I mentioned we continue to get lots of positive reports from vaccine patients in the field. I would say one attribute that's coming back that we saw in our data, but think it's been exciting to hear in the real world has been the onset of efficacy. I think patients are pleased with how fast they're seeing results and then another set of reports that we're seeing, which I mentioned are from patients who were sort of on their last guess as far as tacticals were concerned and we're sort of evaluating progression to systemic agents. And I think it's been a real breath of fresh air for that patient population. So we've heard positive reports from docs and patients about that from both. On folliculitis, I'll just say, I think it's as we predicted, we have not heard any significant rumblings about it. It's not something that we think is meaningfully affecting the way docs use the drug or meaningfully affecting the patient experience given that it's transient and on target for the drug. So nothing new or significant around folliculitis that we think is affecting commercial behavior. Thank you, Neena. Thanks for listening.

Thank you.

Please standby for our next question. Our next question comes from Louise Chen with Cantor. Your line is now open.

Hi. Thanks for taking my question. So I have a few for you. First one I wanted to ask about was Brepocitinib and the SLE market landscape and how you think about that for your product? And also why you chose this one in dermatomyositis as the first two indications? And then secondly, on the Japan Tobacco, congratulations on that news. If you could be more specific on the feedback or the read through to your AD study, that would be very helpful? Thank you. And then last one, I wanted to ask you was broadly what is the physician feedback on VTAMA and how they view it as an addition to the market here with one of the first topicals being approved, novel topicals in a long time. Thank you.

Great. Thank you, Louise. All really good questions and appreciate them all. So thanks for listening. On the first on Brepocitinib with SLE. SLE, as you know from covering the field is that littered with lots of people who've tried lots of things. The competitive landscape is really there's two approved biologics with lots of unresponsive patients and many others who experience a partial response. So it's a disease that has been historically stymied (ph) by a combination of agents that haven't worked as well as they could other than just for development execution. So we see a huge opportunity for a novel agent. And we talked about this a little bit on our annual call and maybe some of the slides there are useful to refer to as you're looking back on it. But I think there's good scientific rationale for the combination of TYK2 and JAK1 being important in lupus. And we've seen the recent data from the Brepocitinib (ph) on the Phase 2 side, which Baricitinib on the deck one side, we'll put that data in this deck. So we think we have a real opportunity there. And as we mentioned last time, this is a study that we're running together with Pfizer and it's going to a capital efficient program for us with a readout next year. So we see it as an opportunity. As far as why, we've chosen these indications. I'd say one of these are both diseases with a high morbidity and mortality with no approved oral therapies at all. As I said in the case, lupus the approved therapies of biologics. And so no approved oral therapy side of getting mortality. And then maybe most importantly, from a scientific perspective, we're looking at diseases where we think the biology of both TYK2 and JAK1 are relevant and potentially where we're going to see some synergistic effect between TYK2 and JAK1 that will make us better than even a combination of independent JAK1 or TYK2 agents might seem to be based on their data. So I'd say those are our main indications, [Technical Difficulty] lupus erythematosus, reflect that. So that's on Brepo thanks for that question. On AD (ph), thanks -- thank you for taking note of it. It's obviously we're excited to see it. It's always good to see I'll pass readout and thank you for taking note of it. It's obviously we're excited to see it. It's always good to see. If I spread out one of your programs, especially in indication where you're currently running a study. And I'll note that that study is significantly smaller than our Phase 3 studies. So to see statistically significant results in the two key endpoints there in a smaller study and to know that they're carrying the program forward through registration is obviously all great and feels like good read through for us. Ultimately, they're going to publish their data, but we're looking forward to our own data. when -- and we think our data is going to readout before they make theirs publicly available. So yeah, I think it's a good positive read through on our efficacy in AD. And then finally, physician feedback. So we've gotten a couple different versions of this question this morning and I'm always happy to take it because I've been incredibly pleased with the quality of the physician feedback. I think -- look, I think docs were hungry for an effective novel topical agent. I think patients were hungry for an effective novel topical agent. I think some of what we are seeing in the physician feedback is just generally that outcome, the doctor excited to have something new prescribe and patients are excited to have something new and nonsteroidal to go on. I think some of the feedback we're getting is frankly just specific to our agents. In terms of the feedback on the onset of efficacy is being fast. In terms of the feedback on it's obviously early for us to be seeing the sort of “remittive” benefit. But early feedback that is through consistent with that idea. And so I think it's been a really positive experience for docs and patients so far from what we can tell. And makes us excited for what's to come. Obviously, there's a lot of work to do to build that into the size of market opportunity that we think deserves to be. And we think it's going to be really topical and psoriasis are going to be a really big opportunity and we think VTAMA is going to be a really important drug sort of best in class drug in that category. So early feedback if positive more excited, generally more of it.

Thank you.

Thank you, Louise.

Please standby for our next question. The next question comes from Douglas Tsao with H.C. Wainwright. Your line is now open.

Hi. Good morning. Thanks for taking the questions. Just Matt, maybe just as a quick follow-up to Louise question on the VTAMA readout. In Japan just to confirm, the -- those two studies have the -- or that study had the same primary endpoint as the study that you were -- that you're currently running an atopic dermatitis, correct?

Yes. Primary and key secondary were IGA and EASI, which are also important endpoints for us, exactly. That's correct.

Yes. I just wanted to confirm because that sort of obviously highlights read-through, should be very strong. And then also just when you think about the progress and just curious in terms of the early phase feedback that you've been getting from payers in terms of getting contracts into place and how they're thinking about sort of prior authorizations and where they see this being put into the treatment paradigm? Because obviously to your point, it could represent an attractive opportunities and off ramp for more expensive biologics.

Yes. Thanks, Doug. Appreciate that question. It's a good one. Obviously, those are all active discussions. It's hard to comment on specifics of where they are. But I think the point you highlighted is obviously an important point to everybody and hadn't been lost on anybody that it's important to have an off rent before biologics. And I think we've said before our view on the treatment landscape is that we should be mainstay of therapy, which is important so not just a sort of a pre biologics option, but really as the baseline of care and that's just sort of where we think the drug deserves to be positioned. But we think obviously the factors around biologics will help us in getting the positioning we want. The second thing, I just remind people of is remember that the main things that insurance companies care about, the payers care about in determining coverage is demand. Obviously, the scientific attributes of the product is something they look at carefully in the FX per panels, but the way that sort of gets realized is around commercial demand. And so the early script volume that we're seeing here is incredibly important we think ensuring that we have the kind of credible broad coverage that we want. And then we talked a fair amount in the approval call about our pricing strategy and about making sure that we had both the price points that will be attractive to list price sensitive payers, but also importantly a price that offered us the opportunity to offer significant rebates to those PBMs that are rebate sensitive. So I think all of those dynamics are important and we think they're going to matter. And you're actually right, the biologics are really big pain points for payers right now. So they're all going to be very focused on defraying that spend over time.

And then just one quick follow-up. I mean, how do you envision obviously getting contracts in place for psoriasis? How long do you think it will take when you look to add the atopic dermatitis indication. Should -- do you think that should be come in place fairly quickly soon after that approval?

Yeah. I think once the AD indication is approved, we should see adoption in AD relatively quickly. In terms of the specifics around payer contracting and payer dynamics, I think once we have the psoriasis payer contracts in place and once we have the AD data, we'll be able to comment more specifically on that timeline. But I think it's fair to say that we expect uptake in AD to be relatively quick on approval.

Okay, great. Thank you so much, Matt. Congrats on the progress.

Thank you.

Please standby for our next question. Our next question comes from Corinne Jenkins with Goldman Sachs. Your line is now open.

Good morning. Two for me. First on the folliculitis (ph), you mentioned that you're not seeing much of an impact, but is that something you're having to educate physicians bond or is that some people seem to kind of understand from the get go? And then with respect to the script accelerate, what are you seeing there? And how do you think that $75 patient copay or responsibility is impacting this still right?

Yes. So Thanks, Corinne. Those are both good and important questions. Yes. On folliculitis, dermatologists are very familiar with folliculitis as condition. And that's all dermatologists are pretty familiar with the folliculitis conditions. So there's not a lot of education need to sort of explain what it is. I think it's important that they have the heads up about it. To be honest, we're just not hearing a lot about it in the field, which I think is exactly what we want. It's something that I think the docs are comfortable with, but also the patient experience of it is my old, it's transient. I suspect that we'll be hearing more about it as many patients were asking their doctors about it after experiencing it. So I think in general, it's just not having much read through on patient or prescriber behavior is sort of, how I understand the current situation to be based on the feedback that we do have. And then, so we're not sharing specific fill rates, but I think we're extremely pleased with the overall rate of that fill prescriptions. And I think that reflects the attributes of the product, it reflects the sales and marketing strategy and it obviously reflects the impact of the copay card program in all of its features in terms of getting patients on drug. And we talked a little bit about how the way that our copay card disruption is also designed to help us in the coverage process and so we're continuing to follow that as well.

Great. Thank you.

Thanks, Corinne.

Please standby for our next question. Our next question comes from Yaron Werber with Cowen. Your line is now open.

Hi, guys. This is Brendan on for Yaron. Thanks for taking the question. First on VTAMA, I just wanted to ask about the Japanese AD study. I guess looking at the baseline demographics there and maybe the enrollment criteria, would you say that's fairly reflective of the U.S. study and maybe what you can expect to there? And then on Brepocitinib, kind of building off one of the earlier questions. Can you maybe just tell us where you see the bar is for you on the Phase 2 study for next year given some of the competition? I know and you also mentioned that your drugs you think would be potentially better than even dual administration of separate inhibitors. Could you maybe elaborate a bit on why that would be the case? Thanks very much.

Perfect. So on VTAMA, the answer is, the studies criteria are similar. Patient populations are different only in the sense that the study in Japan was obviously exclusively Japanese patients. I think the read through is positive and then just a reminder that study is significantly smaller. I think overall that study is smaller than either of our individual Phase 3 studies in AD. So I think that's an important part of that read through there. And then I think your second question was on sort of Brepo and what do we think is the bar, we've talked a little bit about what the unmet need looks like there. I think candidly the bar has to be pretty high. We want to see superior SRI-4 to the approved therapies and then good data on secondary endpoints. So I think the bar for efficacy is reasonably high for the program. It would be sort of one of the only oral agents, actually they'll currently approve oral agents. So we think we have a pretty good opportunity there. Thank you.

Please standby for our next question. Our next question comes from Nishant Gandhi with Truist Securities. Your line is now open.

Hi. This is Alex on Truist Securities. Going back to the conversations with payers on formulary position, have the discussions been challenged at all of the launches ZORYVE and the price point that the competitor has chosen that modified the ongoing negotiations at all with the payers that you're seeing. And then also can you remind us, are you monitoring for how many tubes per month that patients use for VTAMA in real world practice? And if you do, are you going to present this data to investors and what time and future might that be? Thanks.

Yes, thanks. Those are both good questions about VTAMA launch. Thank you. Appreciate them. Yes, on the [indiscernible] price point. I guess a couple of comments. One is we're not going to comment on active discussions with payers and our tubes was just approved a couple of weeks ago. So I don't think there's a real kind of update on the impact anyway. I think we've talked a fair amount in our approval meeting about why we were pricing, where we were pricing. And our tube (ph) has been guiding to their pricing strategy for some time. I think for us it was about threading the needle between a low enough list price to appeal to those plans that we're going to focus on list price, but also high enough list price to be able to offer the kinds of rebates to the PBMs where so much of the commercial volume lies. And I think we feel good about our pricing strategy considering everything that went into it. So, I won't -- again, comes from an acute pricing strategy directly, but I feel good about ours. I also think we just have a differentiated product from ZORYVE. And I think the attributes of our product into these. And third, we have a remittive benefit that that we've talked a fair amount about. Their label has some features that we don't, including they have drug interactions listed with chip-384 (ph) metabolized drugs that's not a small thing. That's like Atorvastatin and Simvastatin and most contraceptives are included in their drug interaction profiles. So I think that's something that will potentially matter in practice. And so I think there's various differentiating features that will also impact payer conversations that will also impact, we will also impact, -- where we are. And I think as I'd say, refills in general, maybe I'll say on the question about tubes per month, we don't currently provide guidance on that. It's super early obviously with many of our patients who just received the first prescription. I think refills are good indicators of happy patients and we're seeing already refills, some number of refills just a couple months in, which looks great to sign at least some patients are going to use multiple tubes, who's going to be happy on the drug. So I think you should actually be able to track to some degrees at tube utilization from watching the NRx or CRx rate. I think we're happy with that. We continue to see good engagement in the [indiscernible] program as well. So I think overall it's too early to comparing long term conclusions on the refill rate or the number of tubes. But I think the early data is promising to us.

Thanks for taking the question and congrats on the progress.

Thank you.

At this time, I am showing no other questions in the queue. I would now like to turn the conference back to Matt Gline for closing remarks.

Great. Thank you, operator. Thank you for everyone for your questions. Thank you everyone for listening this morning. As I said, it was a short call for the last one was just six weeks ago. We're looking forward to getting together in September for our Investor Day and continue to provide updates on VTAMA and on many other exciting things within our business over the months to come. So thank you everybody and we'll talk again soon.

This concludes today's conference call. Thank you for participating. You may now (ph) disconnect.