Travere Therapeutics, Inc. (TVTX) Q1 2020 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the Retrophin, Inc, First Quarter Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Chris Cline, Senior Vice President of Investor Relations and Corporate Communications.

Great. Thank you, Bella. Good afternoon, everyone, and welcome to Retrophin’s first quarter 2020 financial results and corporate update call. Thank you all for taking the time to join us this afternoon. I hope you and your families remain well during this time. Today’s call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg; Peter Heerma, our Chief Commercial Officer and our Chief Financial Officer, Laura Clague; Dr. Bill Rote, Senior Vice President of Research and Development will join us for the Q&A session. Before we begin, I’d like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statements. Please see the forward-looking statement disclaimer on the company’s press release issued earlier today, as well as the risk factors section in our forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made May 11, 2020, and Retrophin specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Chris and good afternoon. Our organization demonstrated great execution to start 2020. prior to the advent of COVID-19, this translated to our strongest momentum and enrollment trends yet for our pivotal DUPLEX and PROTECT studies of sparsentan in FSGS and IgA nephropathy, and notably to achieving the critical milestone of enrolling the first 190 patients in DUPLEX during the first quarter. It also translated to a strong performance by our commercial organization. In the first quarter of the year, we continued our consistent track record of reaching new patients with our approved products and further demonstrated our ability to deliver therapies to patients in the rare nephrology and hepatology communities. Later in the first quarter, the COVID-19 pandemic spread and disrupted the lives of people around the world. We recognize that these are difficult times for everyone and especially for those families living with rare disease. While this pandemic has required us to adjust our ways of working, it has not altered our strong operational and financial foundation and it has not changed our goals. We are continuing to make progress and are focusing on completing enrollment and maintaining high-quality conduct in our two pivotal studies of sparsentan, while simultaneously preparing for regulatory submissions. And in parallel, we are building upon our existing commercial capabilities in order to support continued organic growth of our approved products and to position us to ultimately be able to maximize sparsentan’s potential for patients if approved in the future. Importantly, we’ve aligned as an organization on the priorities that we believe will allow us to best mitigate the impact of the COVID-19 pandemic, as it has evolved today and continue advancing towards these goals. We will continue to focus on the safety, support and wellbeing of our employees by safeguarding the health and wellbeing of our employees as well as providing them support and flexibility during this time, we can continue our work on behalf of patients. Like most companies, we have shifted to a virtual working environment where possible. And for us, this has translated to having nearly all of our employees work remotely from home. I’ve been very proud of our organization’s resilience, ability to adapt and dedication thus far, which gives me great confidence that we will continue to evolve together and deliver on our mission during this pandemic and beyond. For patients receiving our approved products or participating in our studies, we have implemented heightened procedures to ensure safety, access and continuity of care during this time. Over the last several years, we have focused on building a supply chain with flexibility and contingency plans for events like this. I am pleased to report that as a result of these ongoing efforts to supply of our approved and investigational therapies has been uninterrupted today. As of today, we have ready access to 12 months or more worth of finished goods for all products. And we are confident in our ability to provide continuous treatment in the pandemic’s current state. Our clinical studies of sparsentan have continued despite the challenging conditions. We are working within the recent FDA and EMA guidance regarding COVID-19 in an effort to ensure patient safety, continuous delivery of medication and maintain quality of data, especially key endpoint data for DUPLEX and PROTECT. Achieving 190 patients enrolled in DUPLEX during the first quarter was a critical milestone that brought us one step closer to realizing our goal for sparsentan to potentially shape the treatment paradigm for FSGS if approved. I’ve been pleased with the results from our teams and partners’ efforts to expeditiously implement the measures necessary to preserve monitoring and data integrity for our studies in the face of the disruption of the pandemic. As you are well aware, in many cases, access to study centers across clinical trials has been restricted in order to protect both site staff and patients from possible coronavirus exposure and to augment the capacity of the COVID-19 response. This is unsurprisingly resulted in a recent slowdown in screening and enrollment for our ongoing clinical studies. Based upon what we know today, we believe the timelines provided at the beginning of the year are still achievable. However, we do not yet know the full impact of COVID-19 and if an extended slowdown in enrollment were to occur, it could impact our timeline. We are working closely with clinical sites, physicians, our CROs, and the patient community to learn more each day and support site activity, where and when appropriate. We have also been taking steps to be in position to accelerate clinical trial execution when pressures on the healthcare system ease. This will be instrumental as we leverage our existing clinical trial footprint to rebuild our momentum towards completing enrollment in DUPLEX, PROTECT and RESTORE at the appropriate time. For our commercial business, we are ensuring that our existing patients are receiving the support and access they need during this time. I am proud to report that today; our Total Care Hub has remained fully operational and has been able to meet the increased needs of our patients during this time. We have also seen new patients initiate treatment, while it is encouraging that patients continue to be diagnosed and receive the treatment they need during this time, we do anticipate that fewer patient visits during the pandemic could reduce the number of patients initiating treatment in subsequent months. Importantly, through our field-based teams’ virtual interactions, we’re continuing to engage with healthcare providers, so that they have the necessary support and information. We are continuing to monitor this dynamic and the impact it could have on the previously expected growth for our approved product portfolio this year. We certainly recognize the extraordinary challenges that our society, our industry, and especially, the rare disease communities are currently facing. We also understand that the unmet needs within these communities will remain beyond this pandemic. This is why our organization will remain resilient as we continue to work through the COVID-19 pandemic and beyond. Let me now turn the call over to Noah, so that he can provide additional detail on the steps we are taking to advance our clinical studies. Noah?

Thank you, Eric, and good afternoon everyone. As mentioned earlier, we started the year with great momentum in our pivotal DUPLEX and PROTECT studies on sparsentan. Later in the first quarter, the COVID-19 pandemic began to impact global clinical trials and our clinical teams’ near-term priorities shifted to implementing measures to support our sites and patients during this period and to mitigate the impact to these important studies. The broad clinical network we’ve implemented for these studies in rare disease setting has enabled a level of connectivity with our sites that provides for a deep understanding of the individual site needs as well as the visibility into each patient visits, we provide the right level of support. We are in close contact with all of our study sites, principal investigators, and CRO partners and their continuing dedication that serve as an important reminder of the significant need for new treatments in FSGS and IgA nephropathy. Their collective insights have helped us develop an institute the following five priorities that we believe will help us best navigate this pandemic. First, patient safety remains paramount. Every decision we make as a clinical team is designed to ensure patient safety. We recognize the increased need for flexibility during this time and while we’ve been pleased with the adherence to study plans thus far with major sites and patients have a support as needed to leverage technologies such as telemedicine and remote monitoring to ensure patient safety. Second, is providing continuous drug supply. We are making extra shipments of blinded clinical supply to sites and have the ability to arrange for shipments directly to patients under control protocols if necessary. Third, is protecting the key endpoint and safety data for our studies. The DUPLEX and PROTECT studies are critical to developing potential approved – first approved therapy for FSGS and IgA nephropathy. We are prioritizing monitoring and maintain the data and lab results that will support a high-quality study readout. To date, we have seen across both sites and patients a motivation to continue with visits and thus far, we’ve seen strong efforts to adhere to study plans. Fourth, is clear documentation of actions taken as a result of COVID-19, as many of you are aware, the FDA and EMA provided guidance to ensure patient safety and data integrity and clinical studies during this time, and we are clearly documenting the steps we are taking to adhere to these. Fifth, we are taking steps today that enable us to regain strong enrollment momentum in our studies once the pandemic related divisions ease. As many of you will recall, we have a broad clinical footprint with more than 200 sites supporting DUPLEX and PROTECT studies. This is allowed for some regions to continue uninterrupted and continue to randomize patients, but understandably, the global restrictions have resulted in a meaningful slowdown in these activities recently. While we cannot control the length, in which there will be restrictions at sites or magically the pandemic, we have been able to continue prescreening activities to keep identifying trial candidates, and we are implementing practices to leverage our broad clinical footprint to be in position to reaccelerate activity at the appropriate time. I’ll now provide a brief update on each of our pivotal sparsentan studies starting with DUPLEX for FSGS. In early March, we achieved the critical milestone of enrolling the first 190 patients in DUPLEX. As many of you will recall, the DUPLEX study protocol provides for a prespecified interim analysis to evaluate the proteinuria efficacy endpoint in these first 190 patients after 36 weeks of treatment. Successful achievement of this 36-week proteinuria endpoint is expected to serve as the basis for submission of filings for accelerated approval in the U.S. and Europe. Thus far, we have been pleased with patients following plan site visits and follow-ups despite the pandemic and we are working within the regulatory framework to preserve the ongoing study conduct. We continue to believe that a top-line readout in the first quarter of next year is achievable. However, if the recent slowdown in enrollment were to extend as a result of COVID-19, it could delay the top-line readout. We will update you at the appropriate time if that materializes. Turning to the PROTECT study, our Phase 3 clinical trial in IgA nephropathy. As we mentioned during our last update, there has been a growing body of evidence to support the link between proteinuria reduction and improvements in eGFR, specifically in IgA nephropathy. After applying the latest learnings to our current study design and in consultation with FDA, we were adopting the measurement of eGFR over 110 weeks of treatment as the confirmatory endpoint and increasing the total sample size to 380 patients. We believe this adjustment increases our probability for full approval. Importantly, the primary endpoint analysis of change in proteinuria after 36 weeks of treatment of the first 280 patients remains unchanged and our plan to pursue accelerated filings with these data remains unchanged. As Eric mentioned earlier, prior to the initial COVID-19 response, we had seen strong enrollment trends in PROTECT and we are making good progress total enrollment of 280 patients to support the 36-week proteinuria analysis. PROTECT continues to enroll patients and we continue to believe that a top-line readout in the 36-week proteinuria end analysis in the first half of 2022 is achievable. However, if the recent slowdown in enrollment were to be prolonged as a result of COVID-19, it could have an impact on our timelines. We will update you at the appropriate time if that materializes. Notably, for both of these studies at the end of April, we completed our third scheduled independent data monitoring committee meeting. I am pleased to report that the DMC recommended that both DUPLEX and PROTECT to proceed as planned. So to summarize, despite the challenges presented by COVID-19, we continue to advance both of our pivotal studies with a clear focus on patient safety, enabling continued supply, preserving data integrity and documentation. While we have understandably seen a slowdown in recent enrollment trends, we continue to see new patients come into our studies and we are confident in the steps being taken to leverage our clinical footprint and position us to regain momentum at the appropriate time. And we have an organization diligently working to deliver high-quality data from our studies; we look forward to providing official updates as we learn more in the coming months. Let me now turn the call over to Peter. Peter?

Thank you, Noah. our commercial organization continues to demonstrate an ability to understand the needs of patients with rare disease formulate and execute a launch plan and identify new basis. In the first quarter, we saw a new basis diagnosis and treatment initiation across all three approved parts. This resulted in net product sales of $47.8 million, which is driven by organic growth as we have not increased prices in nearly five years. Notably, in the first quarter, we saw strong demand for THIOLA EC. This is consistent with our earlier research of insights and community. It’s indicated that cystinuria patients have an underserved need for additional flexibility in the treatment regimen. As expected in our business, we experienced higher gross to net discounts in the first quarter, driven by the insurance research in the beginning of the New Year. The shift was in line with our expectations. As we anticipate, it will return to normal levels beginning in the second quarter. In the second half of March, we began to see an increase in early request for re-sales as well as some increase in patient compliance, likely in response to evolving coronavirus pandemic. We estimate that this has contributed to approximately $1.5 million to $2 million of go-forward revenue that we likely would not have seen during the first quarter in normal circumstances. This could slightly reduce expected revenues in subsequent quadrants. During the response to the coronavirus, our teams and partners are working diligently to ensure continued access and support for patients receiving our approved therapies. We have taken steps including appropriate levels of inventory and flexible shipping options to maintain continued delivery through this initial onset of the pandemic. I have been incredibly proud of our team’s stability to deliver continuing support for our patients needs during this unprecedented time. Our sales teams for THIOLA and CHOLBAM have transitioned exclusively to virtual interactions with HCPs. Given that we have relatively small teams and cover broad geographies in the United States, virtual engagements have been a core [ph] part of how we have worked with healthcare providers for many years. This made the transition to relying solely on this method seamless for many of our team members and we have seen solid engagement with these efforts. As we look ahead, we are closely monitoring our current patient base, hardly increasing unemployment rate could change patient insurance coverage and how fewer visits with physicians may impact new patient starts. As it relates to our current patient base, we do not anticipate that the COVID-19 pandemic as it has been lost to-date; we’ll have a new full impact for those that are already prescribed our post products. As mentioned earlier, to date, we have been successfully prioritizing access and delivery of treatments. Our Total Care Hub is currently operating uninterrupted, and providing the support that our patients have come to depend on. Regarding patient’s insurance coverage, we have not seen a change in the payer mix thus far, but we will continue to monitor this dynamic. In terms of identifying new patients, we continue to see strong patient additions across all three products for the month of April. The impact in future months however is currently unpredictable. As we anticipate fewer patients will visit their physicians as a result of COVID-19. We do not yet know the full impact this may have, if any, to our growth potential in 2020. While we are currently navigating uncertain times, our commercial organization continues to demonstrate an ability to work closely together with HCPs and other stakeholders in identifying, treating and supporting patients living with rare diseases. This continues to give us a high degree of confidence that we will be able to continue reaching patients here in the current state of the pandemic and we have robust foundation nephrology to launch sparsentan if approved. Let me now turn the call over to Laura for the financials. Laura?

Thank you, Peter. During the first quarter, net product sales from our commercial portfolio grew to $47.8 million, a 21% increase over the same period in 2019. We reported a GAAP net income of $0.8 million for the first quarter of 2019. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $8.5 million. On a GAAP basis, R&D expenses were $30.2 million for the first quarter of 2020. The decrease compared to the same period in 2019 is largely attributable to the discontinuation of the fosmetpantotenate development program. on an adjusted basis, R&D expenses were $27.8 million for the first quarter. Relevant non-cash expenses for the first quarter included $2.4 million of stock-based compensation and amortization. on a GAAP basis, selling general and administrative expenses for the first quarter were $33.1 million. The minimal increase over the same period in 2019 is largely attributable to increased compensation expense and higher professional fees. on an adjusted basis, SG&A expenses for the first quarter were $24 million. Significant non-cash adjustments for the quarter consisted of $9.2 million in stock-based compensation and depreciation and amortization. We incurred approximately $21 million of non-operating cash used during the quarter as a result of a one-time co bond sales milestone of $10 million and contingent consideration in debt interest payments. during the quarter, we recorded an income tax benefit of $19 million. This benefit resulted from the CARES Act legislation, which provides for net operating losses to be carried back to preceding taxable years to generate a refund of previously paid income taxes. We anticipate this refund will be distributed to the company and installments during 2020 and 2021. Importantly, we ended the quarter with a solid financial foundation and $356.5 million of cash and cash equivalents as of March 31, 2020. While our near-term operating expenses may be difficult to predict as we mitigate the impact of COVID-19 and adjust our ways of working, we will remain disciplined in our use of capital and we continue to believe that our cash on hand is sufficient to fund our operations beyond the readouts from our phase 3 studies of sparsentan. Let me now turn the call back to Eric for his closing remarks. Eric?

Thank you, Laura. As we continue to navigate the challenging pandemic presented by COVID-19, we have shifted how we work, but not the why. We continued pursuit of our mission has never been more critical. Rare diseases do not wait for pandemics, and our organization remains steadfast and its dedications of serving our patients and caregivers. We have a strong financial foundation to support our operations and our goals remain unchanged. We are focused on the continued development of sparsentan to support our goal of delivering the potential first treatment approved for FSGS and IgA nephropathy. And we will also work to reach new patients with our approved products while strengthening our commercial capabilities to ultimately maximize sparsentan’s potential if approved. I am confident that the actions we are taking to mitigate the disruptions caused by the pandemic will protect our employees and patients that position us to accelerate enrollment quickly when conditions ease and ultimately, deliver high-quality data from the DUPLEX and PROTECT studies. Finally, I would like to thank each of our dedicated Retrophin team members with their continued focus on the priorities outlined today. I am confident that we will continue to deliver the highest level of support for our patients and ultimately, emerge from the COVID-19 pandemic as a stronger company. Let me now turn the call back over to Chris for Q&A. Chris?

Thanks, Eric. can we please open up the line for Q&A?

[Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. Your line is now open.

Hi, this is Lauri in on for Maury. So, I have a couple of questions, the commercial sales seem to do better than expected. Can you provide any specifics on what proportion is driven by pricing versus volume and what proportion was driven by THIOLA EC versus the prior gen THIOLA?

Thank you very much Lauri, for the question. Peter, why don’t I have you take that one?

Very good. Thank you Eric and thank you Lauri for the question. So, the last – over the last five years, we have a lot of increased prices. So, the growth that you saw in the first quarter was solely by organic growth, like new basins coming into the mix. It’s building on top of the strong quarter that we saw on the first quarter in 2019, where we saw great new additions of patients and we continue to see that in the first quarter of 2020 as well. And then it includes both THIOLA, THIOLA EC as well as CHOLBAM.

I see. Thank you. And for the 190 patients that you enrolled in the FSGS studies, can you go into specifics of what happens if a patient becomes still – does not, cannot come for the basically kick, then I would have to drop out?

Yes, yes, certainly. Noah, would you like to take that?

Sure. Let me first state that, we’ve been following very carefully and closely with the site’s suspended conduct and we’re very pleased with the state’s ability to conduct this study and maintain trial integrity with regards to not being able to come to sites. There are contributions based on the regulatory guidance on some of the sites are able to satellite locations. In some cases, patients are using local labs for a safety drawing and as I said, we’re very pleased with the conduct of the sites. We’ve done a nice job of continuing to maintain a focus on the current priorities I said earlier. In terms of COVID-19, if they develop COVID-19, which obviously, we have special protocols within the protocol to address that. Patients can actually develop COVID, potentially go off drug and then come back on drug as soon as they are feeling better and improve their condition. So hopefully, that addresses your questions.

Okay. Thank you so much.

Your next question comes from the line of Joe Schwartz with SVB Leerink. Your line is now open.

Good afternoon. This is Chris Clark on for Joe. How do you think the degree of proteinuria reduction from sparsentan in IgA nephropathy, they compared to FSGS. Can you talk about any insights you have from preclinical or clinical data?

Yes, thank you. So, we certainly do have data on FSGS with sparsentan from our phase 2s and not in IgA nephropathy, we’ve looked at existing databases and other areas. Noah, perhaps you can share a little bit about the potential differences there.

Yes. I mean I think that we’ve clearly got for the DUPLEX study to do what data to rely upon and you can slowly see, there’s precedent, it’s a very similar population in terms of the reduction of proteinuria. We you expect similar along the same lines is what we saw there. with regard to IgAN, again, there is preclinical data as well as on some clinical data showing that the addition of endothelin inhibition on top of angiotensin blockade does provide incremental benefit and additional reduction. So, it’s hard to say exactly what the differences are. I think you would see reductions probably in a similar range in both. But I would say overall, one thing we saw in DUPLEX and do add if you recall, was patients who were above and below on to in terms of their overall UPCR saw similar reduction. So, I think that’s the data we have – and I think that’s, we’re fairly confident in that.

Thank you very much.

Thank you, Noah. Chris, and one thing that I would add on that is just in the disease state itself, FSGS patients are oftentimes exhibiting higher levels of proteinuria. And so that may or may not play into what ultimately, we see. But there’s no mentioned, we expect to see a consistent effect, because the mechanism of both the disease and the mechanism, in which sparsentan works is consistent in both of those we believe.

Very helpful. Thanks, again.

Your next question comes from the line of Michelle Gilson with Canaccord Genuity. Your line is now open.

Hi, this is Lina for Michelle.

Hi, Lina.

Hi, Lina.

Hi. So maybe, just on sparsentan, wanted a little bit broader on FSGS. So, the first question is, can you maybe, remind us about the tolerability that you saw with sparsentan with regards to 400 versus the 800 and I guess how many patients, if this article that you are using now for phase 3, if you would use that, the downtown patient protocol or in phase 2, how many patients would you expect to be downtown sites rated under that protocol in the drug study? And then…

Thank you, Lina. Yes. Sorry, your second question?

No, it’s okay. I can follow up with that after you answer. Thank you.

Thank you. Now, why don’t you address the tolerability, so I say, I think what you’re referring to three question is referring to the DUET study design. The way the study was designed, patients were started on 200, 400, or 800. And what we saw is patients around 800 had some symptoms consistent with the blood pressure dropping, some lightheadedness intolerability and had to drop back to the 400 milligram dose. And as a result, we weren’t really adequately able to test the 400 versus the 800. and then we designed the DUPLEX study, we actually designed it with that in mind and that’s why there’s a two-week titration step. So, the patients will start on the lower dose and then after two weeks if they tolerate, they’ll titrate up to the higher dose. We expect that a pretty considerable number of patients are going to be able to achieve the 800 milligram dose and hopefully, stay there. And I think that that’s as much as I can say, but I would say in addition that the 400 milligram dose, if you recall from DUET is an effective dose and the drug works quite well, whether it’s 400 or 800. So, we would be very pleased with the 400, but we feel comfortable with the current strata titrating up to 800 and we think we have a pretty good chance of showing in effect at the 800 as well.

Got it. Thank you. And then you know, with the different treatments and kind of different therapies in clinical trials, can you maybe talk a little bit more broadly on FSGS market and kind of where do you see sparsentan sit in on that landscape? Thank you.

Yes. So, I’ll start and then Noah certainly feel free to add anything further. We do see that the FSGS patients are quite broad and in the U.S., there are over 40,000 patients with FSGS and very consistent numbers within Europe. What we see is that these patients in the prevalence is actually growing likely, because of perhaps the conditions that, that drive the scarring and the injury at the glomerulus. What – how these patients are currently treated today is with an ACE or an ARB. And if we look at the DUET study, over 80%, 85% of the patients that went into the DUET study were on an ACE or an ARB. And what we also know from that study, but also from many other studies is that unfortunately, the currently available treatments all off label, do not effectively control the proteinuria to a degree that is going to slow the progression of this disease. And so we believe that if sparsentan is effective, is safe and is approved that it would become the standard of care and the treatment of FSGS, whether it replaces an ACE or an ARB or patients are first started there and then stepped up quickly to sparsentan to get greater. Reduction in proteinuria remains to be seen at some of the work that Peter and his team are doing to understand how physicians may think this role, but that’s largely how we see the role that sparsentan would play. There certainly would be use – the other treatments use. We know that some of these patients are treated with other classes of therapies such as steroids, but we also hear very consistently from patients and their clinicians that there really is a hope for something that treats the common pathway of this disease and is not going to be immunocompromizing. Noah, anything else you’d like to add on the future role?

I think he called me landscape. Well Eric, if I could just add two points just to reiterate. Number one, there are no approved therapies as Eric said, for FSGS. I think that is critical. Number two, we are the only compound in phase 3 at this stage in the game and we’re very proud of that, sparsentan has over 500 patients, who have been treated, who have got a large for this space safety database to draw off of and the DUET data is really a great example that I think in terms of other therapies that are emerging, really there aren’t really many therapies, if at all, that have established the safety yet in this area. Eric alluded many of them are immune-suppressive. There were concerns in those classes around safety. So, let me first say, just say we are for the patients, we want to make sure that as many therapies out there as possible and there’s no reason that sparsentan wouldn’t be complimentary with these therapies that we can see. But again, in the position that we’re at, we believe that we’re going to position.

Got it. Thank you. Congrats on the quarter.

Thank you, Lina.

Thank you.

Your next question comes from the line of Christopher Marai with Nomura Instinet. your line is now open.

Hey, good afternoon. Thanks for taking the questions and congratulations on the strong performance in the quarter. I know it hasn’t been easy. I wanted to ask with respect to the benefit to pull through, you’re seeing with respect to COVID, how much of that is the bile acid products versus THIOLA sales. And then if you did comment, you’re seeing, or you had highlighted earlier in your comments on enhanced compliance. And I was wondering if you could comment on that. Is that enhanced compliance due to the new thyroid formulation? of course, toward those, who have switched to that formulation or is it compliant? That is more COVID related. Thank you.

All right. thank you, Chris. Peter, I want you to take this one.

Yes. Thank you for the questions. Well, the growth, first of all, we saw consistent across all three parts. So, the continuous ability to identify new patients for all three product lines. I think that was a driver for the growth. With regards to your second question on compliance, it’s an interesting question. I think the concept of compliance and adherence is a broader question and we start to see it – although it’s still early days, we start to see that there is an impact on compliance with the EC. It’s too early to comment on like specific numbers. But then in addition to debt in second half of March, we also started to see across all products an increase of compliance lately due to COVID. And I think that speaks to the behavioral components of treatment as well. In particular for cystinuria, you can imagine that patients want to stay away from the hospital in these days, so that could have an impact on the compliance. And the additional element here could be THIOLA EC is like a TID treatment three times a day. And especially that middle treatments with patients being at home, being more at home have more ability to take their treatment as well. So that could also increase – have an increasing effect on compliance. So, to your question, the broader compliance factor, we saw an increase likely due to EC. Then in addition, the second half of that also increased likely through the COVID situation.

Okay. That’s really helpful.

Sorry, before you ask next question, let me just add one thing that both THIOLA and CHOLBAM had a pull forward of shipments as you know, might be expected for these drugs in these conditions. We did see more of that with THIOLA that drove some of that. But also that’s probably where we saw more of the compliance impact as well. Sorry to interrupt you. Go ahead.

Yes. I was just – that was very helpful and I guess I was curious about the second half of March increase in compliance generally that you saw is it your expectation that this will continue through second quarter and then perhaps given the dynamic you’ve seen in Q1 and the emerging impact of COVID, how do you look at a benefit or potential impact in 2Q and I have a follow-up.

Peter?

Yes. I think it’s true to say that. As I’ve mentioned, like the second half of March is really when the pandemic effect started to see, we saw a slight increase in complaints there, how they translate into the second quarter. I think it's too early to say. I think with the EC, I think EC allows for a greater flexibility of patients. So it couldn't be an expected that there could be a slight increase on compliance there. I think that's what we start to see the particular aspect of COVID; I think it's too early to call how to translate into the second quarter.

Okay, great. And then just with respect to I guess, you guys were going to initiate a pivotal trial in CTX with Chenodal and I was wondering how that's being impacted or what you do to initiate that pivotal trial – I’m sorry, and how that may have been impacted. And then finally just with respect to BD, I know you had been looking at many different potential opportunities and has that slowed down or sped up with respect to COVID. Thank you.

Sure. Thank you, Chris. So with regard to the Chenodal CTX study, this is the RESTORE study. We did initiate that trial and similar to the impact of screening and enrollment that we saw with DUPLEX and PROTECT, we also are seeing that with RESTORE. So, I'd say at this point it's too early for us to be able to project timelines for that one, but it is an ongoing study. And then with regard to business development, I would say this is not sped up or slowed down. We continue to remain focused on that as a priority for us. And we believe that there still are a number of assets within the rare disease space that would leverage the strengths and the footprint that we have both for clinical development and for commercial. So stay tuned on that, our team is continuing to evaluate different assets.

Great. Thank you very much. Congrats on the quarter.

Thank you.

Your next question comes from the line of Tim Lugo with William Blair. Your line is now open.

Thanks for taking the questions and congratulations in managing through a difficult situation. I guess maybe a question for Noah, I think we all understand that slowing down a patients being screened, enrolled in DUPLEX for PROTECT. And then also I think in your comments, you mentioned you had some protocols around if a patient were diagnosed with COVID. I'm just wondering more about the general difficulty collecting urine and blood sample during the pandemic. And if patients can't come in within their protocol defined windows, how those patients are managed, and hopefully able to maybe employ home nursing visits or how you're just managing the situation?

Yes. Great question. I think it’s a great question. So with regard to the collection of the urine specimens, and I think you're referencing the key endpoint visits. And we have a great deal of focus on say the week 36 urine collection. Because that's pivotal, right? That's a key end point for us. And we've got trackers that track each patient down to each visit. So, we know exactly where those patients samples are being collected, working closely with the sites. I will tell you that in many sites, it's still being collected centrally in that's still occurring. There are some sites where those collections will either be dropped off at a clinical site sometimes they'll even meet in the parking lot. I mean, there are things like that where the sites are ensuring that they continue to collect that data and get that often. And frankly looking across again an aggregated data set that we have, I can say that we are pleased again with the overall conduct in the study. There is room at some point potentially for a visiting nursing. I think you had mentioned that. We haven't seen a huge need for it at this point, but we are looking at that option and are in the process of contracting a group to do that work for us, in case this is prolonged and the sites do require that additional support. So, I think it's a great question. Hopefully that answers your question?

Yes, no, definitely. It sounds like sounds like you've been innovative in the approach. As I guess more people talk about easing and kind of restate domestically focused on easing, the fact, if we fast forward to June, how many sites do you expect to be still impacted, just maybe a rough percentage?

Yes, that's a tough question to answer, because it is a dynamic process. But I will say this, that the team is, we're engaged with every site. We've had no sites dropped from the study. The sites are very interested in maintaining, continuing and driving this study, they understand the value. Site engagement, if you recall prior to this is what got us to the 190. That's what drove the momentum, and they're engaged and excited. And the conversations that I have typically Tim with the PIs, and I've talked with a great number of them as you can imagine, is when, right can we start to see pre-screening activities, some are doing it now. Some they're not ready. And when can we start seeing wrapping off of screening and randomization, they'll tie it to the opening up of the clinics. As the clinic starts to open up, you'll start to see more and more screening and recruitment because of capacity. But there without over promising, I think talking to number these sites, they're quite excited, engaged and they're paying as close attention as we are to all of this and making sure that we can take advantage once things ramp up.

Okay. And as you mentioned, you are the only FSGS Phase 3 up and running. Is that, I guess, can you give me some of the anecdote you've heard from investigators and maybe their views on immune suppressive therapies and its indication it seems given the pandemic, I don't know, if I'd want to be on immunosuppressants right now.

Yes, I'll take that one, and I'll take it from the conversations that I've had with some of the patient advocacy leaders within the rare renal space, but actually beyond, there's a very consistent heightened awareness around immunosuppression and the risk of infection. And so I think this is something that the rare disease communities are, have a heightened awareness in any way and it's even more so during this pandemic. And so I think that there is really this question of is a potential treatment or clinical trial going to put me at greater risk given that many of these patients face regardless of their treatment and immunocompromized state. I think that's driving a lot of this. And I suspect that the clinicians are going to be thinking the same way. Noah, anything quickly you want to add?

Yes, I think just to support what you said are, we've heard that from the PIs or institutional level as well. So what they're saying anecdotally is the studies that are not putting patients at risk are likely to be the first of the volume of sites of studies to get back up and running on the site level as well.

Great to hear. Thanks for the question. Thank you.

Thank you, Tim.

Your next question comes from the line of Liisa Bayko with JMP Securities. Your line is now open.

Hi, this is John Walden on for Liisa. Thanks for taking the questions and congrats on the progress. Just one on the PROTECT study. Could you just discuss kind of this new confirmatory endpoint, how this might have evolved or changed over time and what is the meaningful difference between this update and what we were previously expecting?

Yes. Thank you, John. I'm going to have Bill take that question.

Certainly, thanks for the question, John. The change is really relatively straightforward. We're essentially removing the post cessation of therapy measurement. So it's the observation window is four weeks shorter than what was listed before, because that really wasn't the right measurement for sparsentan, and we believe this change de-risks our potential for full approval. We originally designed the study based on robust data from DUET and our knowledge of FSGS as well as registry data from a patients with IgA nephropathy, and at time the FDA had asked us to look at pre and post because there was precedent with that measurement with other therapies, and since we started the PROTECT study, we've gained access to a robust trial level analysis specific for IgA nephropathy trials. That's allowed us to demonstrate using modeling that measuring eGFR from zero to 110 weeks while on therapy is really the optimal way to understand sparsentan effect on outcomes. We share this with the agency and subsequently made the change to the protocol. As important for me to point out that this was done based on the modeling from the trial level analysis, it wasn't done with study data. We're still blinded to this study, and we don't have patients out as this point in protect yet.

Okay, great. And then just on kind of the commercial portfolio, you mentioned that you expect perhaps new patient starts will be a little more difficult obviously with the pandemic ongoing, but how are you feeling about your previous guidance of mid single-digit growth for net product sales for the year?

Yes, so John, I would say that we started off very strongly for the year in new patient growth and, we would have seen a very strong quarter even without some of the pull forward of some of some of the prescriptions. And as Peter mentioned, our April new patient starts were also strong. That said, we need to be very careful in thinking about the duration and severity of the pandemic through the rest of the year, and so we're, we're cautious. But at this point, we believe that it is possible to achieve that mid single-digit growth and we'll continue to monitor and report as we see anything, any potential change from that.

Great. Thanks again.

Thank you, John.

Your next question comes from the line of Gena Wang with Barclays. Your line is now open.

I think, the team, my questions this is David on for Gena and congratulations on the great quarter. I still have one question on the commercial franchise for the THIOLA EC. Do you see what patients switching to the ease of formulation because of COVID-19, partly because of convenience and then when not. And then can you just help us understand what's sort like a split patients between the THIOLA EC affirmation original information. Thank you.

Thank you very much, David. Peter, do you want to take those questions?

Yes, I think maybe I take that question. Thanks for that Dave. So, I think in the last quarterly earnings we reported that about two-thirds of the patients started using THIOLA EC, which was very much in line with the research we had done previously. And since then we continue to see an increase of that number. We don't provide the specifics. If that is more rapidly increased due to COVID, I don't think we see that effect.

That’s very helpful. Thank you.

Thank you.

Your next question comes from the line of Do Kim with BMO Capital Markets. Your line is now open.

Good evening everyone. This is EK on for DO. Congrats on the quarter. I just had a quick question regarding THIOLA. In terms of the Q-over-Q decrease in sales is that primarily due to the DTN offsetting the new patients starts and a little bit of seasonality going on there?

Yes, Peter, do you want to take that?

Yes, absolutely. Yes, I think it's a continuum actually across all three lines. We still see patients that are currently using the IR formulation that moves towards the EC, which he also new patients that are being diagnosed and get treatments that they get a THIOLA EC. And we continue to see patients that that you used to have THIOLA and restart therapy with EC. So across all three lines we see that patients are using EC.

I think one of the other things that I would add just in the first quarter, we do see that overall the gross to net is usually higher in the first quarter versus Q4. But as you would imagine that with the volume shifts of THIOLA to THIOLA EC that there would be a differential potentially with gross to net there, but I think largely what we see is a pattern that is consistent in quarter, quarter one of previous years as a patient's insurance reset for the year. So, I think largely in terms of the market dynamics as Peter mentioned, but then you also have this unique dynamic of gross to net within Q1 versus the prior quarter.

Okay. Thanks for the clarification.

Thanks, EK. And time showing no further questions at this time. I would not like to turn the conference back to Chris Cline.

Great. Thank you, Bella. Thank you everybody for joining us today. This concludes our call. I hope you all remain safe and well.

Hi ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.