Apellis Pharmaceuticals, Inc. (APLS) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Apellis SYFOVRE FDA approval conference call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Meredith Kaya. Please begin.

Thank you for joining us today to discuss the FDA approval of intravitreal pegcetacoplan, now with the brand name SYFOVRE, as the first and only treatment for geographic atrophy, or GA. With me on the call are Co-Founder and Chief Executive Officer, Dr. Cedric Francois; Chief Medical Officer, Dr. Caroline Baumal; and Chief Commercial Officer, Adam Townsend. Tim Sullivan, Chief Financial Officer, will be available for the Q&A. Before we begin, I would like to point out that we'll be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional details. Lastly, please note that for this quarter, today's call will replace our normally scheduled quarterly earnings call. Now I will turn the call over to Cedric.

Thank you, Meredith, and thank you, everyone, for joining the call. Today marks an extraordinary milestone for patients for the retina community and for Apellis. I'm thrilled to share with you that the FDA has approved SYFOVRE for the treatment of geographic atrophy, secondary to age-related macular degeneration. SYFOVRE is the first treatment available for GA, a disease that relentlessly and inevitably leads to vision loss. This is one of the most important advances in ophthalmology in more than a decade. It is also the culmination of more than 20 years of cell clinic research and a tireless commitment by our team to bring this important treatment to patients with GA. For those who have been living with this disease for years with no treatment options, we are privileged to finally change the course of GA forever. The approval of SYFOVRE is grounded and this medicine's proven ability to slow GA progression with a label that we believe details the significant value it offers to patients and physicians. First and most important is that SYFOVRE has demonstrated increasing effects over time. This means that the longer a patient is treated with SYFOVRE, the greater the impact this medicine can have on the degenerative process. Second, the label offers flexible dosing. Physicians can decide the frequency of treatment ranging between once every 25 to 60 days based on the individual's needs. Third, SYFOVRE indicated for all patients with GA with or without subfoveal involvement. And fourth, SYFOVRE has a well demonstrated safety profile in GA, following nearly 12,000 injections over 24 months. This is a strong label and the inclusion of the positive 24-month efficacy and safety data in our label creates a very clear picture of what SYFOVRE can do for patients with GA. We are extremely grateful for our collaborative interactions with the FDA throughout this process. GA is a complex disease as the field has spent decades working to address. The effects we have seen with SYFOVRE further validated by this approval are a testament to our approach of targeting C3. We know that complement overactivation is strongly associated with GA progression. And as you can see on the graphic on this slide, SYFOVRE acts centrally in the complement cascade, controlling all 3 pathways and all downstream effects. We believe this unique mode of action results in comprehensive control of the complement cascade. Now before I turn it over to Caroline, I'd like to take a moment to thank the people who have been integral to getting us here. We are especially grateful to the patients with GA who participated in our clinical trials, their families, caregivers and the health care professionals who also participated in the trials. I would also like to recognize our incredible team at Apellis. We are a small company in the world of the retina but we have achieved what many of our larger pharma colleagues have not done. This road has not always been an easy one, especially over these past 18 months. So for that and thank you for your unwavering commitment to improving the lives of patients and your pursuit of the highest level of scientific integrity. It is such an honor for me to be on this journey with every one of you. With the approvals of Empaveli and SYFOVRE, we have only begun what we can accomplish together. Finally, I would like to thank our partners and the investors who have provided their incredible support to FAEs over the years. With the approval of SYFOVRE, we are transforming the treatment landscape for patients with GA. And I will now turn the call over to Caroline. Caroline?

Thank you, Cedric. Before I get into the label, I would like to say how proud I am to be a part of the team to bring the first and only FDA-approved treatment to patients with GA. As an investigator in the Oaks study, I have seen firsthand the transformative potential of SYFOVRE. I came to Apellis in large part because of this groundbreaking treatment. A diagnosis of GA is a life-changing event. I have personally seen how GA impacts the patient's vision and quality of life. GA takes away a person's ability to do the most ordinary daily activity such as reading, driving and even recognizing faces. One of my previous patients had progressed to the point where she could not even see the food on the plate in front of her. And of course, these impacts are both physical and emotional and they affect not only the patients, but also their families and their caregivers. Until now, there were no treatments to offer my patients with GA. As the retinal physicians having to tell your patients that they will ultimately go blind and nothing could be done about it was one of the hardest conversations to have. Thankfully, with this approval, this will no longer be the conversation. It is exciting and gratified to now be able to offer SYFOVRE as a treatment for all patients with GA in the U.S. The approval of SYFOVRE is based on positive results from the Phase III Oaks and Derby study at 24 months in more than 1,200 patients with GA. SYFOVRE is approved for all patients with GA, regardless of lesion locations or whether one or both eyes is affected. This speaks to the broad and representative population enrolled in our clinical trial. Importantly, it is also approved with flexible dosing once every 25 to 60 days. On this Slide 9 are the results of the Oaks and Derby studies at 24 months. As you can see, treatment with both every-other-month and monthly SYFOVRE resulted in a reduction of GA lesion growth in patients. Two things stand out in these graphs, the consistency of the data across both studies and the increased effects over time. These findings were pivotal in our decision to submit the major amendment in November. And with this label, we believe we are now in the best position for our launch. On this slide, it's a slow analysis showing the effects in each 6-month segment. These data are in some ways the most important from these studies as they show how the treatment effects evolve over time. As we know, G&A is not a 1-year disease, so understanding how the treatment is benefiting patients today and what this could mean over time is incredibly important. As you can see, SYFOVRE showed increasing treatment effects over time with reductions in lesion growth as high as 36% between months 18 and 24 in Derby. To see this type of modification, disease modification is extremely rare and very promising. We have the opportunity to learn more about the effects of SYFOVRE even longer periods of time in our 3-year GALE extension. As Cedric noted, SYFOVRE has a well-demonstrated safety profile following approximately 12,000 injections. The most common adverse reactions reported in patients receiving SYFOVRE for ocular discomfort, neovascular age-related macular degeneration, vitreous floaters and conjunctival hemorrhage, rates of ischemic optic neuropathy events are higher in the monthly group as compared to the every-other-month and sham group. The rate of severity of endophthalmitis and intraocular inflammation were generally in line with reported studies of other intravitreal therapies. As with intravitreal therapies, there is always a warning for endophthalmitis. For inflammation, this is important information for prescribers and give them assurance that they may restart SYFOVRE once events have resolved. No events of occlusive or noninclusive vasculitis or retinitis were observed in our studies. While the U.S. launch of SYFOVRE remains our top priority, this is just the first step in our efforts to bring SYFOVRE to patients with GA worldwide. We submitted the Marketing Authorization Application, or MAA, to the EMA last December. We were pleased to hear that the EMA subsequently provided validation and that the application is now under formal review. We anticipate a decision by the European Commission in early 2024. In addition, we've also submitted a marketing application to Health Canada and expect to submit applications in Switzerland, Australia and the U.K. later in the first quarter. Before I turn it over to Adam, I also want to thank Federico Grossi. Fede, thank you for your support over these past 2 months as I have been transitioning into my new role. It is through your remarkable leadership that we have achieved this milestone, and I look forward to carrying on your legacy into the next chapter. I will now turn the call over to Adam. Adam?

Thank you, Caroline. I'd like to echo the earlier comments around what a truly incredible milestone this is. There are more than 1 million patients in the U.S. today who have been waiting for a treatment. And I am excited to share some details on our commercialization strategy. We have built a best-in-class field-based team with extensive experience in retina. They are all in place and laser-focused on bringing SYFOVRE to physicians and patients. We plan to launch in the next week or 2 once we have traded everyone on the final label and supply is in place for distribution. Our field teams will be calling on approximately 2,600 render specialists and injecting ophthalmologists who treat patients with GA. We anticipate that retina specialists will initially prioritize treatment for those patients who have significant vision loss in one eye and foveal encroachment in the other eye, wet AMD in one eye and GA in the other eye or bilateral GA. And these physicians gain clinical experience, we then expect them to broaden to more patients within that network. Turning to pricing and access. Following a thorough analysis, which included extensive physician and payer feedback, we priced SYFOVRE at $2,190 per file. We believe this reflects its clinical profile as the first approved therapy to treat GA, whilst also remaining in line with pricing of existing anti-VEGF treatments. As described previously, and considering the dosing flexibility, we believe this is a strong value proposition for physicians and payers. Our payer-facing team has been engaging with payers, educating them on the unmet need in GA and has received positive feedback on the clinical profile of SYFOVRE. Over 90% of patients will be covered by Medicare distributed almost equally between Medicare Advantage and fee-for-service. Keep in mind that this will be the first time that payers will see a treatment for GA comes through their systems, which may result in some initial bumpiness but should soon smooth out over 1 or 2 quarters. Like other buy-and-build drugs, we will launch with a temporary J-Code and are working quickly to obtain a permanent J-Code. We plan to submit for the J-Code within the next few weeks and expect to have it around October 1, 2023, based on CMS's quarterly cycle for J-Codes. We anticipate measured adoption over this initial period, but then an acceleration in adoption once the permanent J-Code is in place and physicians have more experience with the drug. Apellis is committed to ensuring that every eligible patient who may benefit from SYFOVRE will have access regardless of ability to pay through our Apellis assist program. This patient access initiative is designed to help patients along their treatment journey by providing a system inclusive of insurance support, financial assistance for eligible patients, disease education and ongoing product support. We look forward to keeping you updated on our launch progress as our experienced retina specialist team works to bring this transformative treatment to the GA community. I will now turn the call back over to Cedric for his closing remarks.

Thank you so much, Adam. We are proud to bring SYFOVRE to the more than 1 million people living with GA in the U.S. SYFOVRE's approval marks our second FDA approval in less than 2 years. This milestone reinforces the power of targeting C3 to treat some of the most challenging diseases and we have only begun to unlock this potential. GA and PNH are only the start of what is possible with targeted C3 therapy, and we are focused on expanding our global leadership in complements. We look forward to advancing SYFOVRE and registrational programs with systemic pegcetacoplan across multiple rare diseases with high unmet need. Before we open the call up to questions, I would just like to once again offer my gratitude to all of the physicians and patients who participated in the clinical trials and everyone who helped Apellis gets to this digital moment. And while the list is too long to mention everyone, the following individuals also deserve a special thank you, Paul Olson and Bernard Darty; Nathalie and Robert Scherer, Nathaniel and Robert Rothschild, and David Darst Sr. And additionally, there are a few people who are no longer with us, including founding investors to Frederick Whittemore and Michael Gellert, Apellis toxicologist, Ray Stoll and one of the Apellis' co-founders, Paul Olson. And finally, last but not least, a special call out to Gerald Chan, our Board's Chairman and Morningside Ventures. You have supported us in this company since the very first day, and we are so incredibly grateful. Operator, please open the call to Q&A.

[Operator Instructions] Our first question comes from the line of Madhu Kumar of Goldman Sachs.

Before I go to the questions, I want to congratulate you guys. This is a really exciting important data, I'm sure like you appreciate how big a change is for people to be -- so I really appreciate you for kind of doing all the work done to get across the finish line here. And so our first question really is how to think about to the point Adam made about a temporary versus permanent J-Code. How much of the kind of launch is kind of in a holding pattern until the permanent J-Code happens in terms of kind of physician uptick? Do you have a sense of what fraction of physicians -- what fraction of payers really require a permanent as compared to a temporary J-Code?

Thank you, Madhu. I will let Adam answer that question.

Yes. Thanks, Madhu. So obviously, all buy and bill drugs will start with a temporary J-Code. And I said just recently, we're going to submit in April for our permanent J-Code, which we expect to get in October. Now, we do expect that initial phase during the temporary J-Code to be a little bit bumpy as physicians try and test reimbursement for their Medicare plans. I think some physicians will be successful during that period. But the permanent J-Code truly unlocks the potential. We expect to see some acceleration after October once we get that permanent J-Code. So it's definitely something to be thoughtful about. And we put our plans around that time period when we would have a temporary J-Code. It's consistent for any buy-and-bill drug. So we're still going to be going out there to into 2,600 retina physician getting them ready and talking about this great drug. And they will start to use this drug within 1 to 2 weeks, we believe, and they will test the system for sure. So that's a little bit on J-Code.

Okay. And then maybe following up a clinical question and a financial question. So the clinical question is, how do you guys think about GALE and the data that's going to come out of GALE in the coming years from that study and how that influences the use of SYFOVRE? And then the financial question is, how are you guys thinking about kind of cash position and cash runway through this launch and kind of the path towards kind of breakeven basically and beyond for a drug of this nature?

Thank you, Matt. Well, let me briefly comment on GALE and then I will hand it over to Tim to talk about the financial side. But -- so the GALE extension study for those on the call that are not familiar is a 3-year extension study, where the patient that came out of the Derby and Oaks studies after 2 years essentially engaged in another 3 years of follow-up. This is something that is very exciting to us because we will continue to image these patients and to look very importantly as the continued and hopefully increasing effects that we saw in the first 24 months as well. As mentioned before during the call, that is one of the most exciting features of this drug, especially the efficacy that we saw from month 18 to 24, where regardless of the type of lesion, and with almost similar efficacy between every-other-month and monthly dosing, we already have efficacy or a reduction in lesion size growth of approximately 30%. So we will continue to evaluate that in GALE and look forward to sharing that with you. Tim?

Sure. Thanks, Madhu. So we've consistently guided to having cash into the first quarter of next year. And we certainly hope with the potential of this product to gain a lot of leverage relative to our operating expenses, but we don't specifically guide in terms of either revenue or expenses or breakeven, but we feel very confident that the amount that we need to get there is attainable and not as substantial as maybe some people think.

Our next question comes from the line of Umer Raffat of Evercore. It looks like the line of Tazeen Ahmad is open. Your line is open of Bank of America.

So Cedric, you told me back in January that the next time you would talk to all of us is when you got the drug approved. So you kept your word. Congratulations. I maybe wanted to ask Dr. Baumal, a question or 2. This is the first time I think we're speaking to you in a formal setting. And so I just want to ask, as the practicing physician, how would you expect to use SYFOVRE? So a couple of details here. So is there, for example, a specific age group that you think is ideal? And is there a group that you think maybe could be potentially past the point where the drug would be helpful? And then thinking about dosing frequency, can you tell us why having every-other-month on label would be important to you or any doctor?

You're so right. I'm a practicing retina physician and still also keeping my practice, and I've had the pleasure of joining Apellis with this breakthrough medication. And I think that many of us will use clinical studies to help guide our treatment. And 1 of the main things about Derby and Oaks is that, we have this very heterogeneous population of patients that were included with subfoveal and nonsubfoveal lesions. I think that many patients who've already lost vision from geographic atrophy or even what AMD in one eye would be very engaged to having this sort of treatment. And I think many of my patients, even who are getting older, they have friends who have geographic atrophy or lost vision from geographic atrophy, and they're all excited about having a new treatment for this disease. One of the things to bear in mind is that geographic atrophy causes relentless irreversible vision loss and people are living longer, and we see more of this in the office. The other part was the age. I have to say that as a retina physician, age is something that we're used to. We treat patients with neovascular AMD who are over 90, we do surgery on patients of that age group, and we're really masters at getting intravitreal injections. I think that the SYFOVRE paradigm will fit nicely into the anti-VEGF injection paradigm that we already have. What's one part I missed? And then about the -- how often given the label, I'm really pleased with the indication that we have in the label every 25 to 60 days. This is the flexibility that we like to have as retina physicians. Patients will be in this for the long haul, and we will have this flexible dose. I think many patients will probably want to be injected every-other-month. We'll have more information from the GALE data as to how patients do with different injection regimens. But for example, if a patient comes in earlier, they're going to Florida or something happens in life or they want to be seen earlier than that, then they'll have options with this to have injections over that time interval.

Okay. And then maybe lastly, how important do you think it will be to see a VA benefit over time in order to keep patients on therapy?

We are used to treating patients based on imaging and OCT. We do this quite often in neovascular AMD. And I think that having OCT and imaging ways to show reduced growth of lesions will be satisfying for many physicians and for the patients as well.

Our next question comes from the line of Umer Raffat of Evercore.

I don't have a question whether you're in labeling discussions anymore. I did want to ask you 3 things. One, you mentioned measured adoption in the early period. By my math, you need perhaps at least 10,000 patients in 2023 to make the type of numbers consensus bakes in right now. "Do you think that's measured?" Second, expectations on monthly versus every-other-month, I feel like that's critical to the math I just went through. 50-50, or do you think most of the patients are monthly at the start? And then third one is for Caroline. The retinal detachments disclosed on FDA label is, I think the number is 4% to 6%. I feel like that's higher than what I had seen in your prior data disclosures on 24 months. Can you speak to how important that is commercially?

I will first hand it over to Adam on the commercial side and then next to Caroline.

Yes. Thanks, Umer, it's Adam. So yes, as said previously, we do expect slightly slower adoption we used the term measured adoption within the initial phases of the launch, the first quarter potentially 2 quarters. As physicians are, for the first time, going through all of the benefit investigations and prior offs for a GA product, they have to submit their claims, et cetera, and do all the paperwork. And this is the first time that Medicare is seeing a GA product and paperwork. During that time, we will have a temporary J-Code. And the feedback we get from physicians is that they'll be much more thoughtful in how they use the drug. They'll test and make sure that they get the certainty of reimbursement for the drug. And it's a consideration that we need to take into account for the early stages of the launch. We believe that post-October 1st, the J-Code becoming permanent really unlocks any of the gates that were holding physicians back potentially. So we expect to see a bigger pickup towards the end of this year. So that's answering the first part of your question. I can also answer the second part of your question, which was monthly and every-other-month. I think you said 50-50. In our research that we've been doing with physicians, which we did at 12 months, 18 months and 24 months, we found that we believe that every-other-month is a bit of a game changer in geographic atrophy. We think it's very patient friendly. We think the efficacy of every-other-month is also very strong and support -- that flexibility is supported in the label. All of our physician research, physicians like Caroline, point to every-other-month being the dominant player within the market, and we expect it to be 70% to 80% per quarter of the usage. Every-other-month is a real game changer, and the team is going to be super excited to go out and talk about this new label and what a great drug SYFOVRE can be for GA patients.

Caroline?

So you had asked about -- I just want to clarify, it's actually vitreous detachment, which was reported at -- in the monthly -- every-other-month in sham group. Vitreous detachment is something that happens in elderly patients, it's not the same as retinal detachment. And as a retina specialist, we see that all the time is when patients get floaters with age and the vitreous releases, so that's why the rate is reported, and it's even 3% in the sham group arm. I'm not concerned about that, and I know that my colleagues would not be, it's something that happens as a consequence of age. It happens more often and patients would get any type of intravitreal injections and -- so we don't typically consider that a worrisome event.

Caroline, maybe just to clarify, you're right. The table says vitreous detachment, but the first warning on the label says retinal detachment. And that exact number wasn't reported, and I wasn't sure what that data was that forced -- that made FDA right retinal detachment of the first warning. So I was just curious what that data was on retinal detachment and how you think about that as a clinician because it sounds like they saw something.

There is no increased incidence of retinal detachment with SYFOVRE. It's very rare after any type of intravitreal injection. And if you see below the table, it mentions that retinal detachment was reported in less than 1% of patients.

Our next question comes from the line of Anupam Rama.

Congratulations on the approval. Just a quick one for me. For Caroline, from a clinician's perspective, can you walk us through how you talk to patients about the concept of preserving vision versus, say, a gain of vision and how you think about patient compliance with the broad dosing labels that you have?

Thank you for the question, Anupam. One thing that's important to know is that when patients have geographic atrophy, even if their visual acuity is stable, every single time that patient comes into the office, they will say that their vision is worse than it is progressing. And that's because the lesions are growing. And typically, they only grow into the center of vision at the end latest stage of this disease. So I think that many patients know that their vision is getting worse. The way that we measure visual acuity with Snellen acuity has been around for over 100 years, and we need better ways that we can measure these things on patients. So I think patients will -- they know their vision is getting worse, they know that their skill is getting worse. And when we -- when I'm able to talk to them about a treatment to reduce the rate of both the geographic atrophy, I think they'll be very receptive.

Our next question comes from the line of Phil Nadeau of Cowen.

Congratulations, it's a great milestone for the company and the patients. A few questions from us. First, in terms of reimbursement, what payment terms will you offer to physicians? Will you give extended payment terms during the first several months before the permanent J-code is available? That's first. Then the second, Dr. Baumal, would be curious to hear how you think a bit more about how you think physicians will determine the dosing interval that they want to use. It sounds like convenience may win the day, but are there any other factors physicians would look at that could cause them to give more frequent injections. And then last question, also Medical One. In the prepared remarks, in the slides, you do call out the rates of ion being higher in the monthly arm compared to every month of sham. We also don't think -- we've heard you say that before. So what's the significance of that? And I guess why I call that out.

Thank you, Phil. Great to hear you. Adam will start with the commercial question and then Caroline will fill that.

Yes. Thank you, Phil. Appreciate the question. So obviously, we did our homework, as you would expect, and we did a robust analysis of all of the services that physicians would expect from the previous AMD drugs and anything else that goes to a retina specialist. So we've done our homework on all of those types of activities, and we're going to be making sure that with a focus on making sure that every patient can receive SYFOVRE treatment, we're going to make sure that we are as robust as we can be in meeting those needs of retina physicians within the U.S.

Now it's my turn. I think you asked multiple parts about monthly and every-other-month. The data is meaningful for both monthly and every-other-month, a little bit better for monthly, but every-other-month is also something that as retina physicians were used to that treatment paradigm. That's what we try to get to. So I think for retina physicians will base it on individualized patient scenario, patient is monocular, has one eye, has a lesion as close to the center vision, maybe for that patient, they'll choose monthly, maybe for someone else they'll have a different paradigm. And that's the best thing about this label that we have this flexibility. And I know that my breath of colleagues are very creative and we'll find the best way to treat patients based on their individual scenario. With regards to ION, we previously reported three serious first events of ION in the monthly arms, and the label also includes 4 cases of ION adverse events in the monthly arm in one case in the every-other-month arm. None of the adverse events were associated with significant vision loss. It's notable that the higher incidence of ION was associated with the monthly arm, and all of these patients have associated comorbidities like hypertension and diabetes that are noted to be associated with ION. And this is something for physicians to be cognizant of when they're treating monthly, especially for patients who have these underlying conditions that might put them at higher risk. Also importantly, across the Derby, Oaks and FILLY, there was a single AE event in the every-other-month on and a single event in the sham control and neither of these resulted in significant vision lows.

Our next question comes from the line of Steven Seedhouse of Raymond James.

Obviously, congratulations, everyone. I wanted to ask first on Slide 13, where you sort of break out the priority patient populations. Can you put a number or a percent on that? How many patients comprise those 4 phenotypes that you call out? And then as you progress through the launch, maybe just you could comment on what we'll hear from you guys with respect to launch metrics and progress and how launch is going outside of earnings updates, if at all? And then lastly, we've heard from some retina specialists that indicate basically like the -- at a minimum, the first patient office visit for somebody with GA seeking this treatment could be like 1.5 hours visit. So do you think the 2,600 retina specialists are logistically ready to handle 1 million patients coming through? Or is this going to be a big burden on offices?

Thank you, Steve. Great to hear you, and I may just ask the first question to Caroline and then Adam for the launch metrics and that's first.

So I'll start with the timing of the visit. I think that maybe a 1.5 hours is a little bit on the long side. I mean all of this depends on the sort of imaging that the patient will have when they come in to visit the doctor. And with any new therapy, it's always very careful rated decision. But as retina physicians were very used to this intravitreal injection paradigm. And whether this means adding more staff or having intravitreal injection clinics, I think that most -- I mean all of my retinal colleagues, I can see it from all the tax received, they're all excited to have this new treatment option for our patients, and we'll figure out how to do it. I think some retina physicians are, they're deciding how they're going to monitor these patients. We always do OCT on patients whenever they come in, and I think that, that will be a great way to monitor these patients combined with interment photography.

And just add to Caroline's comments there, Steve, I think, we obviously did some research that said, physicians will make space GA patients and also, again, our every-other-months dosing allows them some flexibility in terms of how they can schedule these patients, so it's important. Your initial question about the priority patients, obviously, again, based on our feedback with doctors like Caroline, physicians say that they're going to prioritize the patients that are actually on their books in their systems. And they tend to be the patients initially who have severe and significant vision loss in one eye and probably foveal encroachment in the other eye. Bilateral GA and wet AMD in one eye and GA in the other, and also wet AMD and GA in the same eye. Now it depends on the size of a physician practice, but the majority of these patients, because of their vision loss that this area can range anywhere between 20% to 40% of the GA patients that these physicians see. A lot of these patients are obviously set back to ophthalmologists because until today, there was no approved treatment for geographic atrophy. So this is where we believe physicians will start. We also know that physicians will start to squeeze patients up from ophthalmologists into their practice. Once they've got through the bolus of patients within their system. Now the second part of your question was what type of metrics so that you can all understand how we're progressing with the launch. So we'll be providing net product sales and the number of files on a quarterly basis. We're also going to look at some other clone type of metrics that give you some quality information on how we're progressing with payers and anything on those slides. But the quant metrics will basically be net product sales and number of parts.

Our next question comes from the line of Colleen Kusy of Baird.

Huge congrats to the whole team. Any post-marketing requirements that the FDA has communicated to you. And then in patients that have wet AMD in either the same eye or the fov eye, are there any initial thoughts on how physicians will administer SYFOVRE as well as VEGF inhibitor?

Thank you, Colleen. Great to hear. There are no post-marketing requirements, and I will let Caroline answer the second question.

We have robust data from Derby and Oaks to guide us on patients who develop exudative AMD or need to have anti-VEGF as well as SYFOVRE injections. And I think that the best data that we have is that these can be done on the same date and it states on the label to wait for pressure to normalize after the anti-VEGF injection before administering the SYFOVRE. And I expect that this will be paradigm started to use for these patients and patients throughout one AMD.

And a quick follow-up to that. And do you see any reimbursement hurdles with dosing type of retina VEGF in the same office visit in terms of reimbursement?

So obviously this is going to be my [indiscernible] this is going to be the first time that physicians will have the ability to dose SYFOVRE and a wet AMD product in the same time. So we do again expect initially 1 or 2 minor [ head ] at SYFOVRE, but as physicians get used to submitting their CMS form, they're using the GA ICD-10 code for the first time, the J-Code and then a CPT code. I think we'll have some time to work through that type of initiative. I don't know, Caroline, if you want to add anything from your practicing physician perspective?

I as a physician, we often inject both eyes on the same day. I think that we will be able to fit that into the treatment paradigm. And I think that the billing issue will be solved.

Our next question comes from the line of Justin Kim of Oppenheimer.

Congrats to the whole team. Maybe just one on the point of GALE. Sort of curious how we should think about the U.S. participation in the study, especially as sort of a commercial product becomes available and maybe a permanent J-Code that's established later this year? And maybe as a quick follow-up to that, just kind of trying to work out how we should be thinking about these insights. And in terms of what we've thought about previously, the fellow eye comparisons were pretty impactful. And just wondering how much of this will be able to be looked at with a commercial product now available?

Thank you so much, Justin. I think I finally get a answer to question as well. So I mean, GALE, and many of you have heard us say that before, is one of the most valuable and most important thing that we have done for this drug. The ability to continue to evaluate this drug over time is very important to us. You make a fair point, which is that, of course, patients that are in the study has to go through imaging, et cetera. So it's certainly a more urgent and to some extent, to be in the clinical trial than it is to be on the standard of care. But on the other hand, switching over from a trial to regular standard of care also comes with these hurdles. And I think many of these patients are now in the routine and used to being in the trial. So we're hopeful that majority of them will decide to stay and help us understand the long-term impact of treatment with pegcetacoplan for SYFOVRE patient GA. So the fellow eye is just an absolutely fascinating observation that we have spoken about a lot in the past, tomorrow at the Macula Society. We will also show data again on the fellow eye and I hope we'll have over 24 months, the fellow eye follows almost to a team what we see in the sham controls as well. So very exciting and a way for us to evaluate on an intrapatient basis how the drug does over time. That is something that, of course, to your point, in the GALE extension study where the sham control patients go on active will continue to be there. So in patients with bilateral GA, where only one eye is treated, the fellow eye, something very exciting to look forward to and we forward to sharing more data on that.

Okay. Great. Maybe one more just follow-up. With this approval, how should we think about 2006? Any updated thinking on plan for the sort of combination?

Thank you, Justin. So 2006 is a very exciting new molecule that we have developed. This is one molecule that combines the activity of pegcetacoplan SYFOVRE with an anti-VEGF modality and also, kind of, I'd say, health-like extending modality included within that same molecule. This molecule will go into the clinic towards the middle of this year. And at the end of the day, will allow us to hopefully go as early as possible, treat patients who have primary wet AMD and find a way to reduce the incidence of geographic atrophy secondary to the treatment within VEGF in those patients. So a very exciting program that our [indiscernible] has told us they'll look forward to investigating and another next chapter for us as well.

Our next question comes from the line of Yigal Nochomovitz of Citi.

First of all, hearty congratulations on the approval and to the broader team on this incredible achievement. I did have a few questions. I think Adam mentioned the 70% to 80% every-other-month expected split when you surveyed physicians. Just wondering, is that a metric that you're going to continue to report on the quarterly sales? You mentioned product sales in dials quarterly, but in terms of the split on monthly and every-other-month, is that something we go be able to track? And then with regard to the label, it's 25 days minimum. I'm assuming that's just to provide for some flexibility since you can't get to 30 days exactly. And then third, for Adam on the pent-up demand with respect to the 2,600 retina specialists, could you comment to any extent on how many of those practices have specifically requested the drug so far?

Thank you, Yigal. I will briefly answer the second question and then hand it over to Adam. But again, the label having that flexibility from 25 days to 16-ish is fabulous for physicians and for patients as Caroline alluded to earlier, right? So we tested the drug with monthly and every-other-month. But considering how close the efficacy was between the 2 dosing regimens and our interactions with the FDA, we found that this description of the label was the most appropriate. So Adam?

Sure. So Yigal, you asked a great question. So obviously, we -- as we said, we'll deliver revenue numbers plus -- also number of files. Initially, we won't have a good idea on how those trials are being used through to our initial phases. What we'll do is we'll speak to physicians and talk to those 2,600 physicians and get some feedback from their offices. And eventually, we'll start to get a little bit more full data on how it's being used. So within the initial phases, it will just be vials. We won't immediately know if they use monthly or every-other-month or the flexibility of dosing. But we'll have more quality metrics that we'll talk to that as we get into the launch window. Now your last part of your question was the 2,600 retina specialists and pent-up demand. Obviously, our cross-functional field-based team has been in the market since last year, doing disease state education. And I have to say the response to disease state education, the request for appellate to go and educate offices and practices on the disease of geographic atrophy was hugely impressive. But I think that's a great time for how the practices and physicians and staff are getting patients ready. And also, we've started to do those, obviously, at ophthalmology centers as well as optometrists, also identifying patients ready for today's approval. So no surprise as we take our field-based teams, we educate them on the label. We then train them, certify them, make sure they go through all of the right certification and we get product to the right site at the right destination over the next week or 2, I do expect that based on what we saw in disease state education that will have some relatively rapid physician use.

Our next question comes from the line of Derek Archila at Wells Fargo.

Huge congrats to the team on the approval well done. Just a couple of quick questions from us. Just -- I think it looks for Adam on the comments around every-other-month being around 70%. I guess, how does that inform kind of the adherence or compliance assumption that you guys have for patients. And the second question would be just, to kind of that pend-up demand, but post the J-Code, do you think that physicians will kind of warehouse patients ahead you guys getting the permanent J-Code, and maybe that there is a ball lift kind of in that post-October 1 time frame.

Yes, thank you, Derek. So obviously we believe that every-other-month is a real positive advantage when it comes to patient compliance, hence based on the research that we have being 70% to 80% of the usage now, obviously the flexibility of dosing within the label allows physicians to choose. But we do truly believe that compliance and the benefits of compliance on every-other-month are real game changer, linked to the [ activity ] of the drug too. And Caroline, is there anything you want to add from your experience on compliance?

Sure. You asked about warehousing patients. I know that many of my collegues already have patients inline waiting for this medication. And well, there is always limitation when we started new medication of course, both payers, but I think that there is many patients heard about this trial but they've already been waiting for this medication and it's really not in the best figures, should be waiting for too long and collegues are excited to have this drug and we'll use it when it becomes available.

Yes. And just to add, [indiscernible] there is a huge expectations to identify patients and filling over paperwork and test how long it takes for reimbursement during the temporary J-Code time period. And within that time period, they find -- for payer coverage or a patient demographic that gets reimbursed relatively quickly, they'll prioritize those patients for sure. So I do think there will be certain practices that will use that method to gain and see how long it takes to get reimbursement, but I also see that patients will be moved towards physicians' offices towards October as well. So you'll see a little bit of both. But the permanent J-Code is something that really unlocks the doors for the vast majority of physicians.

Our next question comes from the line of Eliana Merle of UBS.

Congratulations. Maybe just for Adam and Caroline, I guess what are you seeing? And I guess, what do you expect in terms of new referrals into the retina practices. And I guess, have you seen maybe any uptick recently in referrals and just your expectations for, I guess, how you -- this could grow at time just given the approval. And then just, I guess, in general, how often do geographic atrophy patients see their doctors unlike if you expect maybe like patients to be maybe called in with an approval or say may be treated just at a typical visit and discuss that in light of the approval.

Well, I'll start with that. With regards to referrals, I think that we have done a great job of educating all eye care providers, not just retina physicians, but our cataract doctors, our general eye practitioners and optometrists, all see patients who have geographic atrophy. And there's been a lot of work done on education with regards to imaging in these patients. So I think people are looking for this now and will be looking for it now that there is a treatment available and refer these patients to the appropriate source. And I'll just add that since I am old enough that it was around when anti-VEGFs were introduced, it was very, very similar paradigm at that time, patients with wet macular degeneration really weren't referred in. And then over the -- the first 5 years after treatment became available, patients became referred earlier and earlier, and we learned a lot about that. So I anticipate that the same thing will happen, but all the retina specialists are indicated on this and are ready to treat patients.

Ellie, it's Adam. Just to add to Caroline's comments, right? So we are starting to see, based on our disease state education and the knowledge of GA and the potential, which actually happened today of an approved product that optometrists and ophthalmologists are starting to identify that they can refer patients. Now the feedback initially from the 2,600 physicians is, they have a bolus of patients already on their books. So as we've described before, they're going to prioritize those patients, but then not become quite sophisticated in how they pull patients up through the ophthalmology channel, et cetera. So we expect that we can help facilitate that movement once they've got through the bolus of patients that currently sit on their books.

Our next question comes from the line of Annabel Samimy of Stifel.

Congratulations from me. So I had a couple. Maybe this is for Caroline. We've heard a lot about compliance and the flexibility that you have with every month and every-other-month dosing. I guess I wanted to ask a broader question for GA patients in general. We all know that patients will not be feeling a benefit rather than preventing loss of sites. So -- and we're starting to hear from what we've heard from a few physicians that retention might be an issue as opposed to compliance and maybe we get a flattening of a curve at some point. How much -- how do you think patients will remain on therapy when they're not feeling -- just like in general, your patient base how would they feel about staying on therapy? Will there be some level of injections to tee like you've seen in wet AMD? And do you think that the replacement of patients from the optometrists and ophthalmologists will be fast enough and get into the retinal specialist office quickly enough to sort of offset that dynamic we've been hearing about. So I guess it's more of a broader question that I'm asking. And then second question just relates to the GALE study. I know that we are going to be seeing releases of some of the data, if there's -- any way you can provide us with some kind of timing of those releases. And if there's any additional metrics, things that you're exploring in the GALE study that we haven't seen before, anything new that we might see from that study that could further inform treatment?

Yes. Thank you so much, Annabel. So look, as I've mentioned before, I mean, GALE, very, very exciting for us, especially to -- continue to evaluate these increasing effects over time that we saw. I don't think I need to tell this audience how rare it is for a drug to have increasing effects over time. And that is something that we look forward to exploring. As it relates to releasing the data, we're not committing to anything, but we will probably synchronize this with meetings. Maybe a press release if there's something particularly interesting, but no commitment at this point in time.

It's Caroline Baumal, with regards to retention of patients, I actually think that injection fatigue is less of an issue in our patients who have macular degeneration compared to diabetic. The elderly patients, they really want to save vision that they have. It's so tied to their independents. And one of the -- the benefits of SYFOVRE is that it can actually tell patients approximately, if they're on the every-other-month dosing, you can actually give them a time point as to when their injections are with anti-VEGF injections, sometimes it can be a little less -- you can give them like less of a standard because we do treatment then and if the disease gets worse, we have more of our own recipes. But I think with this, so patients know what to expect that they will be motivated to be treated and to reduce the rate of vision loss.

Okay. And you mentioned earlier that you see retinal specialists becoming very creative with their injection. Can you share with us what kind of creativity you might expect?

Well, many of my colleagues have injection clinics. They have patients come in. There's really a set paradigm where we see patients do their vision check their pressure do a picture or a CT and then the patient goes right into the room and has an injection. And this really fits nicely with the flow that we have with anti-VEGF treatment.

Our next question comes from the line of Joseph Stringer of Needham.

Two quick ones from us. Just given your expectations that the vast majority of patients will be covered by Medicare. What are your initial thoughts on what we can expect around gross to net? And then secondly, following up on some of the earlier questions on dosing, could you provide your updated thoughts on what you think the average number of injections per year per patient would be? I understand that you alluded to that you think it's going to be skewed more towards every-other-month redosing, but if you take into account different type of GA patients, for example, those are bilateral versus unilateral, how does this influence your estimate?

Thank you so much. Tim will answer the first part and Adam will take off.

Sorry to disappoint you, Joey on your first, collecting here, but we are not going to be guiding anything in terms of growth to that. So unfortunately no. I'm not going to answer for you on that one yet.

What was the second part of your question, Joey, sorry.

I'm sorry. Just in terms of your updated thoughts on the average number of injections per patient per year. Understand that, it will be skewed more towards every-other-month. But if you take into account the various types of GA patients, how does that influence your estimate on that?

Yes. Joey, it's Adam. So I think there's some pretty complicated math that goes into that in terms of eye treated, et cetera. And along those lines, so some of our initial treatment population you might be treating 2 eyes per patient, et cetera, et cetera. I think it eventually will net out at what you would expect of approximately 6 to 7 potential vials per eye per year, but that's after treating the initial patient bolus. And as a reminder, some physicians will choose to start monthly vials based on the severity of the disease. And Caroline, from your perspective, do you want to add anything?

Sure. I think 6 to 8 is actually, for example, for wet macular degeneration that's on the lower side, some patients get even more and as patients are really able to stand the game for lab. So I would anticipate somewhere between 6 to 8 per eye.

Does that answer your question, Joey?

Yes.

Our next question comes from the line of Douglas Tsao of H.C. Wainright.

First, there's a lot of conversation and focus on digital or functional preservation and then what patients see and how that will gain for a data asset adoption. You presented earlier this year very interesting data on microperimetry. And I'm just curious from Dr. Baumal's perspective, how that will be sort of received by the physician community? And maybe for Adam, I'm just curious how we do plan to work that into the messaging from a sales force perspective?

Thank you so much, Doug. So I think, look, the microperimetry data and really understanding what goes on with visual function outside of the lesion border, which is where the disease is progressing, right. It's very exciting work that we do with Schmidt-Erfurth from Vienna that was presented at AAO that we will continue to do, specifically focusing on that area that is going to be work to be followed. I don't know Caroline, if you want to add something to our position to look at that. I think it is interesting, but...

Right. I think it's very compelling, the photoreceptor and RPE data done that show reduced rates of photoreceptor RPE loss compared to sham treated eyes and the microperimetry data. And as a clinician, we know that functional data and I was an investigator in the study. So I will tell you that doing functional data tests on patients who are over 80 that are already have compromised vision due to a severe disease are very difficult for the patients to do these tests. And as a retina specialist, I believe in the imaging data that I do. And we treat other diseases based on imaging is that we see, and I'm really enthusiastic with the production and GA growth rate.

Okay. Great. If I can, one quick follow-up. Just from a labeling standpoint, obviously, you succeeded in getting a broad label. It does discuss both the benefits for foveal as well as the foveal lesion, just to -- from a competitive standpoint, how do you think from your interactions with the FDA, how are they thinking about that relative to products where sponsors are focused only on extrafoveal lesions?

The increasing effects over time were very, very important in the approval process. We're very important in the label. The division has been very clear about the importance of the slope. These slops are not just from 0 to 12 or 0 to 34, but specifically the piece-wise linear slopes. It was our hope that we would get those slopes in the table, and we did. And we believe that those are critical elements of expanding to physicians and to patients what the long-term benefit of this drug could be.

I'm showing no further questions at this time. I'd like to turn the call back over to Cedric Francois for any closing remarks.

Well, including -- thank you all for joining us. This is an incredible day and the approval of SYFOVRE is such a major milestone for patients with geographic atrophy. We are around tonight. So if you have any additional questions, feel free to reach out to Meredith. Also, we have received questions about the [indiscernible] next year, will happen. Thank you again for joining us today, and have a wonderful rest of the week.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.