Everest Medicines Limited (6HN.F) Earnings Call Transcript & Summary

Good morning or good evening. Welcome to Everest Medicines 2024 Midyear Financial Results Conference call. Please be advised that today's conference is being recorded. [Operator Instructions] And finally, I would like to hand the conference over to your speaker today, Ms. Liu. Please go ahead.

Good morning, everyone. I'm Leah Liu from Everest Medicines. Thank you, operator, and everyone, welcome to our 2024 first half year financial results conference call. Joining us today are Mr. Rogers Luo, our Chief Executive Officer; Mr. Ying Woo, President and CFO; Dr. Jennifer Yang, our Chief Scientific Officer; Sandra Zeng, our Chief Medical Officer; and Rico Liang, our Chief Product Officer. Before we get started, I'd like to remind you that the speakers on this conference call will make statements as to forward-looking statements, including descriptions regarding the intent, belief or current expectations of the company or its officers with respect to the business operations and financial conditions of the company, which can be identified by terminology such as will, expects, anticipate, future, intends, plans, believes, estimates, confident and such similar statements. Such forward-looking statements are not guarantees of performance and involve risks and uncertainties and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. Company or any of its affiliates, directors, officers, advisers, representatives have no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call as -- except as required by law. And now I will turn over the call to Ying Woo to provide you with more details on our business update and 2024 midyear results. Ian?

Thank you, Liu. So thanks, everybody, for joining this call. We are very pleased with what we achieved in the first half of 2024, with strong revenue growth as well as operational efficiency improvements. With the first full 6 months of XERAVA sales and the launch of Nefecon deemed mid-May. We have seen the rapid buildup of our commercial platform that supported a 158% revenue increase compared to the second half of 2023 when we first launched XERAVA in July of last year. Our overall cash gross margins remains at more than 80%, rather 83%. This is inclusive of our royalty obligations to our partners and -- but it does back out noncash amortized capitalized expense, which we think is a better reflection of the true picture of [indiscernible] operations. As a reminder, 80% is our long-term guidance for cash gross margin across our commercial business. While our efficient and focused commercial models led to [ 249% ] reduction in operating expense as a percentage of revenue as we delivered strong growth with much more modest increase [indiscernible] expense, lower R&D spending and stable G&A expense. For the first time in our corporate history, we achieved profitability at a commercial level. As a result of increasing top line healthy gross margin and decreasing operating expenses, our non-IFRS loss narrowed by 35% in the first half of 2024 compared to the first half of 2023. We have consistently provided non-IFRS disclosure, which backed out one-time items and noncash charges and believe that this is the best measure of the company's [indiscernible]. Our cash balance of RMB 1.93 billion remains strong and provides significant flexibility to fund the continued growth of our business. Together, this combination of high revenue growth, optimized operating efficiencies and strong cash position puts us at a strong position to execute dual engine growth strategy. And this strategy is coming [indiscernible]. On the one hand, we will continue to drive stable and healthy revenue growth from our existing late-stage portfolio of [indiscernible] products, while leveraging our commercial platform to bring [indiscernible] in assets that drives scale and efficiency. On the other hand, our [ discovery ] platform which we started building 3 years ago is starting to bear fruit with the initiation of clinical development of first mRNA therapeutic vaccine program. Everest owns global rights to the discovery candidates which creates optionality for global value creation. Let's take a closer look at our revenue growth. Our total product revenue grew to RMB 301.5 million in the first half of 2024. Again, this is a 158% growth over the second half of '23. Nefecon which only launched in May of this year, delivered RMB 167.3 million. And XERAVA, which launched last year, continued its strong presence, contributed RMB 134.2 million. With a full 6 month of sales from Nefecon and XERAVA in the second half of 2024, we are well on track to deliver on our full year revenue guidance of RMB 700 million. Next, I'll get you through some major operational achievements that we made in the first 6 months. First, on Nefecon. We secured regulatory approvals in both Singapore and Hong Kong, and our supplemental NDA application seeking full approval of Nefecon in China by the NMPA. Our partner, Calliditas, secured full regulatory approval in Europe through its EU partner STADA. Calliditas also reported positive results from the NefIgArd open-label expansion trial, which showed a treatment response consistent with the NefIgArd study across endpoints of UPCR and eGFR after repeat treatment of 9 months across all IgAN patients. These results supported the study thesis that in response to retreatment was unaffected by previous treatment cycle, providing a solid scientific foundation for the potential long-term treatment with Nefecon. Moving on to XERAVA or eravacycline. Earlier in the year, eravacycline's clinical breakpoint was officially approved in China to support precise use of eravacycline in clinical practice in China based on drug sensitivity. Then there was the announcement of positive interim results from the largest real-world evaluation of eravacycline by the expert committee on clinical use of antimicrobials and evaluation of antimicrobial resistance. This is actually a part of the administrative health. So it's quite well respected within the China medical community. So this study shows strong efficacy and safety of XERAVA [indiscernible] across IAI and other infection. The result shows the overall efficiency of eravacycline was 80%, and the incidence of adverse events was only 2.9%. XERAVA was also included in multiple treatment guidelines and was subject of multiple medical journal publications. For Velsipity or etrasimod, we're proud to have secured regulatory approval in Macau and Singapore, which marked its first approval in [indiscernible]. Additionally, we announced positive top line data of the maintenance period from a multicenter Phase III clinical trial of etrasimod in Asia for the treatment of moderately-to-severely active UC. With 40 weeks of treatment, etrasimod demonstrated significant clinical and statistical improvement over placebo in all primary and secondary endpoints. [ Zetomipzomib ], our most recently licensing product from Kezar Life Sciences. We built the first Chinese patients in the global phase IIb PALIZADE trial for the treatment of active lupus nephritis. Other than the late-stage product that we just discussed, we continue to make progress on assets where we have global rights. Our first therapeutic mRNA vaccine program, EVM-16, a personalized mRNA cancer vaccine has started an investigator-initiated trial in 2 top cancer hospitals in Beijing, in Shanghai. Personalized mRNA cancer vaccine program from Moderna and BioNTech have demonstrated clinical proof of concept and increases our confidence in this therapeutic approach. We intend to leverage our proprietary mRNA platform to advance multiple additional programs into clinical trials. We also continue to enroll patients for EVER001, a covalent reversible BTK inhibitor. In the Phase Ib trial in membranous nephritis, we expect to report preliminary results from this program in the second half of 2024. Sandra Zeng, our Chief Medical Officer; and Dr. Jennifer Yang, our Chief Scientific Officer, will describe the events in more detail later in the presentation. So on this slide, let us delve a little bit deeper into the Nefecon opportunity in China and why we believe the product is such a significant growth driver for Everest. IgAN is a disease where there is a large base of a possibly [indiscernible] and significant unmet medical need in China. Diagnosis rates are still low, and biopsy is generally required, but we estimate that there are approximately 1 million biopsy diagnosed patients in China and approximately 100,000 newly diagnosed IgAN patients each year. What is remarkable about this disease is that it impacts people in the prime of their life. Most are diagnosed under the age of 45 when they are at their prime working age and making families. These patients are both more urgent needs and also higher willingness for treatment based on the large deal of research and as we have seen in our old clinical trials disease progression in Chinese patients is more rapid than global patients left untreated. Nefecon is the only approved IgAN therapy in China and is only fully approved treatment globally. Current treatments, which are off-label, such as RAS inhibitors or SGLT2 are nontargeted and do not alter disease progression. In Phase III clinical trials, Nefecon demonstrated 66% less deterioration of kidney function over 2 years, 9 months of treatment with 6-month follow-up, which could translate into calculated delay in disease progression to end-stage renal disease by 12.8 years. Let us look at the launch of Nefecon, which happened in May of this year in China. So we have developed [indiscernible] with the launch of Nefecon deploying significant commercial efforts and innovative sales and marketing tactics towards the launch. We combined traditional approaches of in-person detailing at the hospitals [indiscernible] platforms to make the medicine more quickly and broadly accessible to patients. We have completed build-out of the Nefecon sales force at around 120 reps plus regional and district manager. This team will cover around 500 core hospitals and represent about 60% of the addressable IgAN patients in China. The commercialization platform also is innovative programs such as patient early access and assistance programs. Our medical affairs team is working to build physician awareness, including through medical publications, such as the inclusion of Nefecon in IgAN treatment guidelines. We expect inclusion of Nefecon in KDIGO 2024 as well as in the first Chinese guideline second half of this year. Equally important, we're going to improve market access and affordability through hospital listing and NRDL negotiation. NRDL negotiation this year will be important for Nefecon revenue growth next year. We expect both of NRDL listing to be announced in November, followed by the price announcement in January of next year. We're also working to establish an innovative ecosystem for kidney disease diagnosis and treatment with the aim of providing IgAN patients tools to enhance disease diagnosis and track disease progression without biopsy. So let's look at the anti-infectives of therapeutic area. The similar thing we see [indiscernible] as you can see in China, antibiotic resistance is a major issue with 80% of Acinetobacter baumannii cases resistant to carbapenem and a significant number of klebsiella cases showing symptoms as well. Additionally, the detection rate of metallo-beta-lactamases in carbapenem-resistant E. Coli is alarmingly high at 94% and 22% in Klebsiella [indiscernible] strong demand for new efficacious and safe treatment options. Prior to the launch of XERAVA, the main treatment for MDR infection includes tigecycline; Zavicefta, which is priced at RMB 4,000 a day; Colistin, which is priced at about RMB 3,000 a day. However, each of these have their downside. Tigecycline has low tissue concentration and comes with Black Box warning by the FDA. Zavicefta does not cover metallo-beta-lactamases; and Colistin has very high incidence of nephrotoxicity. XERAVA is a novel first-in-class fluorocycline antibiotic with broad strong spectrum coverage of gram-positive, gram-negative, anaerobic pathogens and atypicals. Given [indiscernible] efficacy and safety, it is priced at approximately [ RMB 5,500 ] per day. Since launching the product in July of 2023, XERAVA has achieved aggregate revenue of RMB 233.2 million. So as a first-in-class antibiotic offer these solutions for Chinese hospitals battling multi-drug resistant infection. We have been actively deepening the penetration of the product into our 300 core hospitals with [indiscernible] of around 128 plus. This year, we have added 2 CSO partners to expand the coverage in non-core markets. We are generating highly encouraging results with a 300% increase in the number of treated and a 75% increase in the number of hospital listings since the second half of '23. XERAVA has also been included in 3 treatment guidelines as well as published in 5 medical journals and continue to build awareness of this important medicine in these communities. So turning now to etrasimod, the third product in our portfolio. Etrasimod or Velsipity was in Macau in April for the treatment of moderately to severely active UC. Etrasimod is an effective, safe and orally available convenient UC treatment, well suited for first-line use. We're preparing to commercialize this product in Macau and making the medicine accessible to -- in some of the 19 designated medical institutions in the Greater Bay Area in the second half of '24 by leveraging preferential policies in the region. By increasing physician and patient awareness, we will take away the full launch of the product in China, which we expect in the -- towards the end of [indiscernible]. The commercial infrastructure necessary in ulcerative colitis or UC in China is relatively limited as patients are concentrated approximately 100 IBD centers across. As we have [indiscernible] our fully commercial or near commercial products and their progress, you can see that we are well on our way to achieving our vision of funding and leading biopharma in Asia by 2030. We're focused on 3 core therapeutic areas with 4 on-market or near-market aggregate key sales potential of over [ RMB 10 billion ]. We have 3 clinical stage products, including [indiscernible] a global Phase III trial -- Phase-IIb trial in lupus nephritis, beta expected in 2026; and EVER001, a BTK inhibitor in a Phase Ib in lupus nephritis. All of these candidates diseases where there is currently no approved standard of care, and we will continue to advance discovery of therapeutic mRNA vaccine for long-term value creation. As we mentioned on the last slide, we have 4 products that are expected to drive revenue growth for the next few years. We achieve a revenue of RMB 126 million in 2026 from just 5 months of XERAVA sales as well as Nefecon sales in Macau. For '24, we are confident in achieving our guidance of RMB 700 million. Looking ahead in 2025 and beyond, we'll have 4 products on the market with etrasimod and cefepime-taniborbactam joining the lineup, driving strong revenue growth eventually reach combined the sales of RMB 10 million. So let's talk a little bit about our investments in 2 of our 4 therapeutic areas. The renal disease is one of these. Aside from Nefecon, we have a pipeline of other promising drug candidates with a total addressable patient population over 10 million. The most advanced of these is [ Zetomipzomib ] which is in a global Phase II trial in -- Phase IIB in lupus nephritis with beta expected in 2026. [ Zetomipzomib ] is a potential candidate for other autoimmune diseases, and our pharma Kezar is currently investing in Phase IIa study evaluating autoimmune hepatitis. We talked about EVER001 already and Sandra will talk about membranous nephritis in more detail later. We think that potentially a pipeline will be [indiscernible] product as well, even though our first indication is MN, it has potential for other diseases -- renal diseases also. Next slide. So let's talk a little bit about our investments in the infectious disease space. So MDR infection is a key area of focus for us and we have a portfolio of antibiotics that offer differentiated and complementary activities. XERAVA offers broad spectrum coverage with strong activity against Acinetobacter Baumannii is a best-in-class beta-lactamase inhibitor with strong coverage of pseudomonas infection. EVER206 in the earlier stage in our pipeline, but it's designed to reduce nephrotoxicity for polymyxin which is an expected antibiotic with this use limited by significant renal tox. We intend to position these products and foundation for incurable treatment for MDR infection and expect to be able to leverage our existing hospital anti-infective sales organization to commercialize and create significant synergies. While we have a robust pipeline, we continue to go full way to further bolster our product portfolio for future growth and value creation of the company. Our dual engine approach is focused on in-licensing of attractive late-stage development or commercial stage assets in our 4 therapeutic areas, where we have an existing sales force. We are, therefore, to create commercial and clinical synergies and build scale for our entire [indiscernible]. The second approach is our proprietary discovery platform. We are using our mRNA platforms to develop therapeutic vaccine and other programs will be [indiscernible] that can create more value for the company and potentially unlock global partnerships. Pipeline of assets where we have global rights. This is increasingly an important part of the Everest story as these programs advance through clinical and preclinical development. In addition to EVER001 in membranous nephritis, we have 4 mRNA therapeutic vaccine programs under development for various solid tumor indications and autoimmune diseases. The [indiscernible] for our personalized cancer vaccine was launched last week. This is the first therapeutic product independently developed based on our mRNA technology platform to enter into clinical development. Other cancer vaccine programs, including a tumor-associated antigen vaccine, we aim to submit a U.S. -- submit for U.S. and China IND in early 2025 and an immunomodulatory cancer vaccine that we for IND filing in 2025. We are also expecting preclinical proof of concept data in our in vivo CAR-T program in -- hopefully before the end of this year. This can be developed both cancer and autoimmune diseases. We will take a deeper dive into the pipeline products. I will hand over to Sandra file EVER001 first.

Thanks, Ian. So EVER001 is our new pipeline we have the global rights for the new label indication. As Ian just mentioned [indiscernible]. And actually, as you know, [indiscernible] is the most common cause of clinical and non-clinical worldwide. In China, this disease is highly prevalent with approximately 2 to 3 [indiscernible] account for 80,000 to 100,000 patients. In terms of current available treatment, more than 30% of patients do not respond to the standard of care. With the patient that achieved remission be around 30% patients will relapse. In addition, the current treatment are associated with substantial side effects. Therefore, there is a high unmet medical need for developing new therapies, which are more efficacious and safer. So EVER001 is a novel and unique BTK inhibitor. And selectively and reverse funding with [indiscernible]. We differentiated EVER001 from [indiscernible] BTK inhibitor on the market. The covalent binding ensures BTK [indiscernible] while the reversability proven prolonged BTK inhibition, which would compromise the new response. Therefore, the BTK EVER001 has unique features of highly selectivity, potent target binding and less on-target, off-target toxicity. As you may be aware, BTK inhibitor has demonstrated a clinical benefit in [indiscernible]. BTK is the essential component for [indiscernible] receptor signaling pathway. BTK [indiscernible] for production of [indiscernible] which have normally activated receptor signaling pathway and transform B cells to carefully activate B cells responsible for the autoimmune renal disease, such as PLA. PLA occurs [indiscernible] on antibodies against entire targeting tumor, and then therefore, the BTK inhibitor can inhibit the activation, differentiation and proliferation of B cells to reduce or [indiscernible]. So that's why we are developing the EVER001 as the first indication is to [indiscernible]. So first target of EVER001 actually is in the half subject. The data already published in the journal EVER001, we have formulated there is no serious adverse events antibody. The most frequently reported adverse events actually increased from the triglycerides and the decrease on which account and decrease leucocyte count. And also from [ TK ] perspective, EVER001 inhibitor dose proportional increase in Tmax and curve, going in the multiple growth [indiscernible] generate . And regarding BTK receptor occupancy, the multiple dose of 400 milligrams and 600 milligrams [indiscernible] the receptor occupancy remaining above [ 84%, ] which suggests a sufficient magnesium support in renal disease. But actually, they are very excited about this study which is completed in [ TMA ] patients with [indiscernible] or antibody. The study is designed with different dose cohorts. The coal black starting with dose 100 milligrams from 2 weeks to 4 weeks followed up by 100 milligrams IP for 2 weeks. The cohort 2 actually is 400 milligrams [indiscernible]. The primary end goal is [indiscernible] andagility and of course, the second endpoints are the efficacy, increased [indiscernible] change from baseline of proteinuria [indiscernible]. We are expecting the preliminary results from Phase Ib study in the second half of 2024. We are planning to initiate the Phase II study trial in early 2025. So right now, I will turn to Jennifer to talk about MI.

Thank you, Sandra. So we are very proud that we have established a fully integrated and clinically validated mRNA platform with capabilities across whole chain of this platform. We believe using this platform fully able to help us discover and develop more novel drug candidates, which will be of value for our shareholders. Many of the capabilities [indiscernible] platform stem from internally innovation. For example, we have a proprietary active design algorithm that can ensure high expression of target antigens or target proteins. We are also developing next-generation LNP delivery system to further enhance T-cell immunity. Our CMC [indiscernible] is capable of developing robust assets to ensure high-quality mRNA [indiscernible] production. Last but not least, from a self owned manufacturing [indiscernible] attributable to support clinical trials with full of our commercial scale material down the road. Next, please. Based on this platform, we build [indiscernible] products therapeutic cancer in pipeline. The most advanced program is EVM-16. This is a first line neoantigen cancer vaccine. As you probably know, personalized neoantigen cancer vaccine [indiscernible] and Moderna have shown promising clinical results through early trials. As a matter of fact, Moderna has already partnered Merck initiated platform-based trials, including two Phase III trials. But just saying that this modality can be benefit to patients. Back to our EVM-16, a tumor uptake next year, sequencing will be carried out to identify specific mutations. And then our proprietary neoantigen prediction algorithms will further identify those patients with high potential in [indiscernible] vaccine cost. When this vaccine is delivered, it will be given back to patient PD-1 antibody. Our self-developed algorithm have gone through several [indiscernible] . First of all, increased level [indiscernible] model, our algorithm is able to identify low that previously unreported tumor entity. [indiscernible] are posed to be highly in now. And our efforts on superior performance in several multiple independent studies. Preclinical data also demonstrated synergistic impact of combining EVM-16 with checkpoint inhibitors, which supports application in the upcoming clinical setting. This month launched an IT study in two top 10 hospitals in China ,Fudan University Shanghai Cancer Center as well as Beijing Cancer Hospital. In this human Phase Ib trial, we're evaluating Stage III tolerability, immunogenicity as well as preliminary efficacy of EVM-16. And in Phase Ib, we 5 EVM-16 for testing multiple tumor [indiscernible] high unmet medical need, including for [ HCT, CRT ] for pancreatic cancer. Our clinical results will become available starting from 2025. Next slide, the second program from our pipeline EVM-14, this is an off-the-shelf tumor associated antigen TAA vaccine. TAA type of vaccine has its own advantages, while maintaining good tumor specificity because TAAs are highly tumor whereas no impression or very limited impression in the tissue. I'm going to can cover more detail across and there is any HLA restriction. So this type of vaccine can be applied to a broader patient population. Due to the off-the-shelf nature, this type of vaccine, EVM-14, can be applied to more preclinical studies, especially well suited for advance stage disease. Compared to [indiscernible] general vaccine, it also has reduced manufacturing costs and has a potential to be applicable to multiple cancer indications. Last month, [indiscernible] announced positive top line Phase II results of their [indiscernible] vaccine, indicating TAA vaccine can bring benefit to patient. Currently, our EVM-14 and enabling that are ongoing, we anticipate signing in early 2025. With that, I'm going to hand over to Ian to talk about our financial numbers.

Thanks, Jennifer. So let's take a look at our financial summary. I think the most important takeaway I would like to highlight is our ability to substantially increase operating efficiency while driving rapid revenue growth. First half 2024 revenue was RMB 301.5 million, a significant increase over the approximately RMB 9 million reported in the first half of '23 and [ RMB 2026 ] million in the second half of 2023. This is mainly contributed by the sales ramp-up of XERAVA and the successful launch of Nefecon. The cost of revenue was RMB 70.4 million, excluding noncash items, our margin was 83%. This is inclusive of royalty obligation from IMG partners. G&A expenses was mostly stable at RMB 87 million, which means that we were able to support our growing operations and revenue base without substantially increasing our corporate expense. R&D expense decreased by 12% to RMB 253 million in the first half of 2024. This is due lower clinical expenses in our programs. However, we continue to invest into our wholly owned discovery programs and those costs were steady. Distribution and selling expenses increased RMB 136 million to RMB 200 million. The expenses in the first half of 2023 occurred higher launch in China. The first product commercialized in China was launched in the second half of last year. And this year, we launched Nefecon. We expanded our commericial activity to support both products. However, if you look at commercial expense to revenue ratio which represents the efficiency with which we generate our revenue, it decreased significantly both year-over-year by 654% and over second half of 2023 by 76%, showing that we are able to generate more revenue with less capital. This leads to our non-IFRS net loss for the period, narrowing by RMB 114.3 million or 35% to RMB 212.6 million. To amount IFRS net loss number, we back out noncash and onetime items from IFRS measure. The most significant of which is a one-time nonrecurring intangible asset impairment loss of the mRNA COVID-19 vaccine program, which we have de-prioritized due to declining [indiscernible] and social benefit. I would likely just add here that creating when we platform towards the end of 2021, we intended to develop not just [indiscernible] mRNA vaccine, we also wanted to leverage the platform value of mRNA for its other wholly owned mRNA programs. And you can see the early outcome that we have been also achieved in that Jennifer has talked about earlier today. So at the same time, as our losses narrow, we maintained a healthy balance of RMB 1.93 billion in cash and cash equivalents as of June 30, 2024. We believe this provides sufficient amount of money for the company to support current growth, our goal remains to get to the cash flow breakeven in 2025. So we're extremely proud of what we have been able to achieve in the first half and laser focused on executing a number of people for the second half of the year. So for Nefecon, we're certainly in the early days of our launch and are building sales momentum with our newly onboard sales team and setting up medical to raise awareness of Nefecon among physicians and patients. The top priority for the second half of 2024 is the NRDL negotiation, which we spent tremendous efforts on. Lastly, we expect to have Nefecon in the new legal treatment guideline and the Chinese entry on guidelines to further raise awareness in the medical community. With the launch, we continue to focus on commercial execution, deepening our penetration of our [ 300 to 400 ] target hospitals as well as leveraging our partnership with CSOs to expand into regions beyond our own sales coverage. For Velsipity or Etrasimod, we look forward to beginning our commercial efforts in the Greater Bay area as well as submitting for an NDA approval in China. Clinically, we will continue to advance multiple cancer vaccine programs towards IND filing in '25 and intend to make significant preclinical trials with our R&D programs as well. We also expect to read out results from multiple important trials in real-world studies, including Phase Ib data from membrane nephritis, data from an open-label trial of Nefecon patients and real-world evidence study from both Nefecon and XERAVA, including Nefecon Ole for the access program. On this slide and say that we're off to a very good start in the first half of the quarter, but we'll continue to be focused on revenue growth and operating efficiencies in the second half of this year and beyond. We hope to deliver on our full year revenue guidance of RMB 700 million and build a solid foundation for 2025, including turning cash flow positive by end year. So with that, let me ask the operator to start the Q&A session.

[Operator Instructions] The first question comes from Goldman Sachs.

I have two questions regarding Nefecon. The one is congratulations that we achieved encouraging early ramp-up within 2 months of selling. And now at the end of August, we have accumulated around 4 months of selling. Can you share a bit more color on the real-world usage of Nefecon, particularly I'm interested on the patient pros, how many patients have we treated? And among the patients, what are the percentage that have kidney biopsy tested? And what is the average DOT that has been observed so far? And also interested on any breakdown on offline prescription trends? That's the first question. And the second question is, I know that most recently, Novo Nordisk filed for semaglutide for chronic kidney disease in China, how do you see potential impact from [indiscernible] in CKD on Nefecon, thanks?

So probably I can answer your question. First of all, the performance of the first several months of headcount meet our expectations as we forecast option of this year's and the guidance. With regards, the patients who have been using Nefecon, I think several patient types. Of course, [indiscernible] of them are being diagnosed with biopsy in the clinic, some of them -- they say some of them old patients who have been diagnosed [indiscernible] for many years and seeking for treatment, which can either delay the progression of ESRD. And some of them are -- of course, some of our new diagnosed patients who are seeking innovative treatments with indication and manage on their renal function preservation. So that's -- those are the two types of patients, 100% of them are diagnosed by [indiscernible] . So with regard to the speed of online/offline, at the early age, most of the patients, I would say, are patients, we have EAP programs since last April from [indiscernible] and Macau. At that time, some patients are and Macau who have that treatment. And the products, some of them are warehouse patients. As we disclosed before, more than 20,000 patients for the PAP and pre-consultation services who are in China, some are from those warehouse patients and those patients are at early stage are online more than off-line. And in a later stage, currently it's about, I would say, most are from off-line, so from the hospitals and pharmacies patients are coming forward. I think in the future, probably more and more patients get back in hospital rather online platform because online have to -- the patient has to be in the hospital prescription and with that prescription in that online, so that's a change. Looking forward, on next year, if we can get a reverse impact in both of patients were from their offline channel. So that's the seasonal breakdown around online and offline for delivery. And with regard, you asked a question about the I think they are immuno -- autoimmune disease. So we don't see any evidence of TLP1 detected in those patient groups. Of course, we can see of those kind of as being used in the patient group, but without label, off label and so this defined as [indiscernible] It's not treating the origin of this disease, which is renal disorders. So I don't see at least now we're going to see any impact for those kind of form.

[Operator Instructions]

So while we are looking at the questions from the audience, I have a couple of questions on the call that I'd like read and ask the management for their answers. So the first question is that we're better to the average risk mRNA vaccine going into clinical development, when do you plan to release the first results? And are you under discussion with Global Partners?