Idorsia Ltd (IDIA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Idorsia Full Year 2022 Financial Results Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Weiss. Please go ahead.

Thank you, Heidi. Good morning, good afternoon, everyone and welcome to our webcast to the full year publication of our results. The press release went out this morning at 7:00 a.m. Central European Time. With me on this call are our CEO, Jean-Paul Clozel; our CFO, André Muller; and our Chief Commercial Officer, Simon Jose. Next slide, please. Just to remind you, we will be making forward-looking statements in this call. So please be attentive to the disclaimer. You've, therefore, been adequately warned about the risks and benefits of owning or shorting our stock. Next slide, please. So let's take it off. Jean-Paul, the mic is yours.

Yes. So yesterday, you have seen that we have informed the market that the REACT study did not meet the primary endpoint. And of course, we are very disappointed and very sad, I have to say, but it should not really hide the achievement, next slide, that happened in 2022, which provide momentum for 2023. Next slide. A lot has been achieved in 2022. First, QUVIVIQ was approved in the U.S. PIVLAZ was approved in Japan and launched in Japan. QUVIVIQ was launched in the U.S. QUVIVIQ was approved in Europe, and we got the result of aprocitentan showing a very significant blood pressure reduction. And then we got the results of daridorexant in insomnia, in Japan and QUVIVIQ at the end of the year was launched in Germany and Italy and cenerimod Phase III in lupus was initiated. And finally, just before the end of the year, aprocitentan was filed for U.S. -- the NDA of aprocitentan was filed in the U.S. So Simon is going to describe our commercial plan and the launch of our first 2 products. Next slide.

Thank you, Jean-Paul, and good morning and good afternoon, everyone. 2022 was indeed a transformative year. We obviously launched our first 2 products, and I believe we've built a very strong foundation for future growth. And obviously, I'm pleased to be able to share with you the positive momentum we're seeing with the launches of QUVIVIQ in the U.S. and Europe and, of course, PIVLAZ in Japan. Next slide, please. So I'll start with QUVIVIQ, which is you all know, was launched in the U.S. in May and in the first 2 European markets in November, as Jean-Paul said, in Italy and Germany. In 2022, net sales totaled CHF 6.5 million. Obviously, as I've mentioned before, net sales in the U.S. don't reflect demand or prescriptions dispensed to enable early patient access to QUVIVIQ, we continue to offer our strong copay program, including a free first 30-day prescription. And of course, demonstrating demand is critical to support our ongoing negotiations to expand payer coverage, and I'll provide an update on our progress there in a few minutes. Next slide, please. So turning now to the prescription volume for QUVIVIQ in the U.S. You've seen this slide in prior earnings calls, showing that TRx volume by strength on the left and the split by retail dispensers, which you see reported by IQVIA and those dispensed by VitaCare, our pharmacy services provider on the right. And obviously, we've updated these last 3 months since you saw this chart in October for the Q3 call. I'm pleased to be able to share that TRx volume continues to grow with almost 15,000 prescriptions dispensed in December despite the usual dampening impact of holidays, which as you can see, was the case with VitaCare who were closed for the public holidays during the Christmas to the year period. And we continue to be pleased that the 70-30 split of the 50 milligram and the 25 milligram strengths is, as you can see, being maintained. Next slide, please. You can also see the same positive trajectory in QUVIVIQ writers, which continued to grow month-over-month. And although we continue to expect to see our writer base growing as we move into 2023, our clear focus is now going to be on increasing the number of prescriptions from each writer turning the current breadth of prescribing into greater depth of use. And on the right-hand side, you see the split by prescriptions with 65% of prescriptions now coming from primary care physicians and 21% coming from psychiatrists and this is broadly in line with the structure of the insomnia market. Next slide, please. Encouragingly, we continue to see the source of business for QUVIVIQ coming from either new patients or were switched from the older, widely used sleep medicines such as Z-drugs, benzos and trazodone. Only a small number of patients on QUVIVIQ are coming from the other DORAs, around 6% of switches and only 3.5% of all patients. This is critically important to us, as to achieve our long-term goals, we need to dramatically grow the DORA class in addition, of course, to making QUVIVIQ the leading DORA. Next slide, please. And here's the effect on prescriptions. You can see that QUVIVIQ volume has essentially been additive to that of Belsomra and Dayvigo, expanding the DORA class as a whole. And naturally, QUVIVIQ is taking share within the class as it grows. The chart on the right shows that after just 8 months on the market, QUVIVIQ has achieved 41% share of the DORA class in NBRxs, surpassing Dayvigo and in quarter 4, approaches Belsomra. And during that same period, the DORA class has grown 67%. Next slide, please. Taking a closer look now at how our NBRxs are tracking in recent weeks. You can see here that QUVIVIQ is now neck-in-neck with Belsomra, and we expect to become the leading DORA in NBRxs any week, now that we are through the holidays and payer coverage is increasing. Of course, refills and continuing prescriptions are just as important as acquiring new patients, arguably more so in the long run. The chart on the right shows the continued growth and acceleration in CBRxs, or continuing prescriptions, indicative of the patient satisfaction with QUVIVIQ, we generally see in the market. The NBRx performance versus Belsomra is particularly impressive when you consider that Belsomra generates over 50% of its prescriptions from Medicare Part D, where QUVIVIQ is yet to be covered. Next slide, please. So although it's clear we would have passed Belsomra NBRxs in the commercial segment only, we actually can't get NBRxs by channel. So I can't show you that and construct a graph to prove it. But we are able to do this with TRXs. And as you can see here, in the commercial segment only, where we can compete equally, QUVIVIQ has passed Dayvigo TRx share and is on a trajectory that will pass Belsomra in the next few months. This is probably the most appropriate head-to-head comparison of performance, while we continue to expand our access and before we have Part D coverage. Next slide, please. And of course, speaking of coverage, I'm pleased that we have made some real progress in the beginning of this year. As many of you will now know, QUVIVIQ was added to the Express Scripts National Preferred Formulary from January 15, gaining parity access with the other DORAs in their approximately 22 million lives covered, representing about 13% of the commercial market. Now there are a further 30 million lives, about another 19% of the commercial segment in the downstream plans that can now take the ESI rate that we've agreed with them. We're also on formulary with TRICARE, which covers 9 million U.S. military service members and their families and other further 5.4% of the commercial segment. So as you can imagine, we are now actively pulling this expanded coverage through via the sales team and other promotional activities. And of course, we're in discussion with all the ESI downstream accounts to secure coverage there, too. And we continue to have active discussions with the other commercial payers and the Part D plans. Next slide, please. So to just conclude the U.S. by briefly touching on our branded direct-to-consumer advertising, featuring QUVIVIQ patient ambassadors, Lindsey Vonn and Taye Diggs. These initiatives have demonstrated a very significant increase in all our key metrics, including traffic to quviviq.com, where we now have exceeded 1.7 million visitors, paid an organic search, copay card downloads and utilization and ultimately, doctor conversations and QUVIVIQ and VRXs and continuing scripts. Next slide, please. Now looking beyond the U.S., QUVIVIQ is on track to become a global brand. In November last year, we achieved our first European launches in Germany and Italy, and I'll speak more about our progress there in a moment. We've also completed our Phase III study in Japan and are preparing to file the marketing authorization application in the second half of this year with our local partner, Mochida. We also announced a licensing agreement with Simcere in November 2022 to develop and commercialize daridorexant on in the Chinese market. Next slide, please. Now in Europe, QUVIVIQ is the first and only DORA available to patients, and I really see great potential here given the high unmet need and dissatisfaction with existing treatments in the region. In Germany, we launched QUVIVIQ in mid-November. And as I'll show you in a minute, it's got off to a great start. As I have mentioned before, in the German market, there is a 4-week prescription limitation for all hypnotic and sedating agents known as Anlage-DRI. The G-BA issued a draft resolution last year to exempt QUVIVIQ from Anlage-DRI which, if approved, would mean QUVIVIQ would be the only sleep medicine reimbursed for long-term use in Germany for adults. We also launched in Italy last November into the private market. Insomnia products there are not reimbursed. At launch, prescribing of QUVIVIQ is limited to specialists. It's not uncommon for that to be the case with new CNS products. And our feedback to date has been extremely positive. And launch preparations are underway in Switzerland with launch planned in mid-'23 in the private market. This is whilst our reimbursement dossier is under review. And in the U.K., we plan to launch in the second half of this year following final NICE guidance. We submitted our dossier to NICE last summer and will have an advisory committee in March. And lastly, launch preparations are also underway in Spain and France. Next slide, please. So I'll turn to Germany briefly. Whilst it's early days, QUVIVIQ has got off to a strong start in Germany. This chart shows the weekly sales units from wholesalers to pharmacists. And you can see the very positive momentum in the initial weeks, post-launch, which has continued now after the dip during the holiday period. There were a significant number of German sites in the pivotal trial programs at QUVIVIQ, and we're seeing a great deal of interest among German medical experts and GPs in the new mechanism of action and differentiated efficacy and safety profile of the product. Next slide, please. And here we see the initial uptake in Italy. This weekly data is projected by IQVIA from a panel of pharmacies around 20% across Italy. So we should treat it with some caution. Nevertheless, we see a positive initial trajectory, especially when considering that we are launching in a private pay market with specialists prescribing only at this stage. We recently had a launch event with key opinion leaders who showed a lot of excitement about the product and shared there positive initial experience with QUVIVIQ. I look forward to sharing more progress in Europe over the next months. Next slide, please. So just to finish up with turning to PIVLAZ in Japan. We launched PIVLAZ, as you know, in April last year to prevent vasospasm following an aneurysmal subarachnoid hemorrhage. This has a 2 into 3x higher incidents in Japan than we have in the Western markets. Next slide, please. And again, you've seen this chart which has now been updated with the end of the year numbers. We continue to see very positive trajectory since launch. We generated net sales of CHF 44 million since April against the currency headwind that hasten to add, with over 95% of target hospital accounts ordering. Medical experts and neurosurgeons are supporting the inclusion of PIVLAZ in SAH treatment protocols. And at the end of last year, in December, approximately 25% of aSAH patients received PIVLAZ based on the incidence of SAH in Japan, and we expect adoption to continue to grow this year. So in summary, I think 2022 was a transformative year where we put our commercial plans into action, and we launched our first 2 products. QUVIVIQ is building momentum with very positive feedback from physicians and patients alike. In the U.S., we expect this momentum to increase and start translating into net sales as we expand payer access. And in Europe, although it's early days, QUVIVIQ is off to a strong start in Germany and Italy, and we're preparing some additional launches later this year. I'm confident the strong foundation we've built in 2022 sets us up for a year of strong growth and additional launches in 2023. And thank you for your attention. I will now hand over to Andre.

Thank you, Simon. So next slide, please. Let's go directly to Slide 23 and how U.S. GAAP net results came about. I would like to start with the CHF 757 million non-GAAP operating loss of 2022. You may recall that we have not changed the guidance from the full year result 2021. So in February '22, via Q3 results published in October 2022, maintaining net operating -- non-GAAP operating result of minus CHF 785 million. So you see actually a difference of CHF 28 million. And this CHF 28 million is actually the contract revenue on Simcere, so $30 million upfront. So what I want to emphasize here is that, yes, clearly, sales were lower than expected, but it also means that we closely monitor our OpEx to remain committed to this guidance. We're now coming with a few comments on the net revenues. The CHF 97 million on the top left consists in CHF 50 million sales, as Simon said, PIVLAZ in Japan, CHF 44 million, badly impacted by the FX rates. We see a weakening of the Japanese yen. And roughly CHF 6 million with daridorexant, our U.S. accounting for CHF 5.5 million and Germany for almost CHF 1 million. On the contract revenue, so the remaining CHF 47 million, as Jose said, Simcere accounted for CHF 28 million. We had CHF 2 million from PONVORY, revenue sharing from Janssen, CHF 3 million from Neurocrine with an extension of the research collaboration and CHF 14 million deferred contract revenue from previous collaboration, including J&J regarding aprocitentan. So with this, and we'll see -- our next slide, we will comment the non-GAAP operating expenses of CHF 854 million. But the D&A and stock-based compensation in line with the previous years at respectively, CHF 20 million and CHF 26 million, so leading to U.S. GAAP operating results of minus CHF 803 million. And below EBIT, you see is CHF 25 million, which is mainly interest around CHF 16 million. That's the coupon of 2.125% paid on the CHF 600 million convertible bond, to approximately CHF 12.2 million. Here coupon on the CHF 200 million convertible bonds, so 0.75% for CHF 1.5 million. And you may recall, I explained it in Q3, a result CSL and leaseback transaction is according to the U.S. GAAP treatment treating as debt. And to the extent we have also a relating funding cost of CHF 1.6 million. On top of the interest of CHF 16 million, you have also a tax of CHF 8 million, CHF 2.5 million withholding tax on the upfront from Simcere. And we had also CHF 4 million of foreign taxes, mainly in Japan and U.S., given our tax organization with our commercial affiliates being what we call limited risk distributors. And we have CHF 1.5 million deferred tax. So this lead us to U.S. GAAP net result of minus CHF 828 million. Let's move to the next slide, 24. Speaking of the non-GAAP operating expenses here. And cost of sale is mainly consistent on the royalties that we pay on clazosentan. So it's CHF 4 million. The real cost of goods is really low on the sales. So for the remaining CHF 2 million, it's really -- it's more distribution and warehousing. As you can see, research with CHF 117 million is almost flat or, I would say, flat if you take into account CPI. And you see that the development is slightly below last year at CHF 240 million. In this CHF 240 million, you have roughly CHF 100 million, which are functional expenses. So it's a real fixed cost base of our development organization, clinical but also pharmaceutical and chemistry. And the remainder, so approximately CHF 140 million, that's really the study cost. Here, we have 3 main drivers. First, selatogrel, You know well, we are enrolling with SOS-AMI. And to this extent, we have spent more -- significantly more than in 2021 with CHF 41 million for selatogrel, CHF 28 million in clinical, so remaining in order to get this autoinjector in connection with mainly Halozyme. The other main driver are daridorexant and cenerimod. So cenerimod, we are now -- as you've seen, we have finished Phase II. This was the main Phase IIb. We are starting Phase III. This was the main driver for the expenses -- study expenses around CHF 26 million. And the other big driver is daridorexant with still CHF 26 million, not so much at -- in a global clinical which is around CHF 8 million, notably with the initiation of the pediatric but also with a Japanese trial. And as Jean-Paul said, and now we got results in Japanese pivotal trial accounted for CHF 9 million and sets our share because Mochida, our partner, took also 50% of the long-haul development costs. So these are the main drivers. As you can imagine, aprocitentan comes to an end. Clazosentan will -- also will come to an end, especially moving forward in 2023. And lucerastat still spending because we have an open-label extension but these amounts are relatively small compared to selatogrel, cenerimod and daridorexant. SG&A. So in this CHF 492 million, the main cost is really driven by commercial with marketing and selling expenses around CHF 400 million, of which a significant amount is spending in the U.S., around CHF 300 million. And Simon explained you that here, we need to have a sales force detailing the PCPs. We need also -- and you have seen the impact of DTC, digital and TV ads. So we're -- at this was a significant effort, not fully reflected in the net sales, but we need first to grow demand and continue on this positive trajectory to convert demand to volumes into net sales. Now that we get commercial coverage and soon, hopefully, as Simon said, also, but that's 2024 with Medicare Part D. With this, we end up with CHF 854 million non-GAAP operating expenses. So a significant change compared to 2021, mainly driven by the launch activities in the U.S. And current preparation in Europe and Canada and also, we see a launch in Japan. Next slide, please. Cash flow. So that -- you'll recall that we started this year with a stronger balance sheet, CHF 1.188 billion liquidity. As I said here, the non-GAAP operating results of CHF 757 million we just explained. CapEx around CHF 27 million. Significant working capital requirements with CHF 65 million with an inventory [build]. Notably, we've registered the starting material for daridorexant, but also a significant increase in trade receivables. Of course, with the Japan sales, you have roughly 100 days of sales outstanding. And -- but also with the U.S. -- because of the U.S. sales bundle. We sell to see a wholesaler at WACC or gross -- net or gross selling price and we get a 60-day payment term with this wholesaler, but all the gross to net. So all the rebates are paid at 15 days. So of course, this generates -- because we have demand, the gross sales are going up. We have with this higher working capital requirement. Sale and leaseback, this was already in Q3, CHF 162 million. And the other items are actually what we already mentioned below EBIT, interest expense, tax expense and a small adjustment were reconciled with a non-GAAP operating results. So by the end of December 2022, we end up with a liquidity of CHF 466 million. Next slide, please. Here, you see the structure of this liquidity by year-end 2022, CHF 336 million on the right chart in Swiss franc and USD 116 million in U.S. dollar because that's a natural hedging, notably accounting for the sales -- OpEx, notably with the U.S. commercial organization. Next slide, please. I will finish with the financial guidance for 2023. You see here net revenue of CHF 230 million. Operating expenses of CHF 880 million. These are non-GAAP measures, leading to a non-GAAP EBIT of CHF 650 million. As last year, we can be reassured that we are committed to manage since EBIT target at CHF 650 million. If you take U.S. GAAP, you see a delta between -- in the operating expense of CHF 65 million, which is mainly driven by stock-based compensation with a significant increase. The reason for it is that we -- in order to preserve our cash, 70% of next year or 2023 bonus to employees across the organization will be paid in shares, account for roughly CHF 20 million. And if you had time to read with the governance report, you've seen that we launched in 2022, a plan called Ambition 2027 with granting to most employees an incentive plan split evenly between restricted share units and performance share units that will have some metrics in '25, '26 and '27. But you still have to account next year or see a full year impact in U.S. GAAP of this Ambition 2027, new initiatives to retain the employees at Idorsia. And lastly, we are growing in terms of organization. So we have also a higher impact of the organization in 2023 compared to the previous year. With this, we believe that the U.S. GAAP operating loss would be around CHF 735 million. Next slide, please. You may have seen already this profitability target, which we issued at the JPMorgan Health Care Conference. We remain committed to reach a sustainable profitability in 2025 with a global revenue above CHF 1 billion. And here, again, we only account what we know, i.e. the sales of QUVIVIQ, sales of PIVLAZ in Japan only, and certain royalties we are entitled with Janssen regarding aprocitentan. With this, I hand or to Jean-Paul.

Thank you, Andre. So you have seen that next slide. We are continuing to advance our pipeline. And you have heard about next slide, PIVLAZ and unfortunately, the REACT, but also the Japan commercial success, QUVIVIQ, which is basically to an end of the clinical development plan and aprocitentan, which is filed. We are going to, during the year, have a discussion with regulatory authorities for lucerastat and we are in Phase III, recruiting for selatogrel and cenerimod that will concentrate on these Phase III products. We have many other products coming in Phase I and II. Most of them, we are looking for partners because they come to areas where we are not focused. And we are in discussion for several of these products with potential partners. Next slide. So last year, we announced the results of aprocitentan and I really like to show this data, which are really very impressive. You see how the 2 doses of aprocitentan could decrease blood pressure and maintain the blood pressure reduction during the year, which -- during or 8 months, which was asked to be done by the FDA and where the withdrawal shows the real effect of the drug because it's really after clinic treatment, it's at the end of the treatment, and you see how the blood pressure is maintained under aprocitentan and comes back with placebo. Next slide. If we look at ambulatory blood pressure where there is a much lower placebo effect because it's much more precise, is done at home. There is no influence of the white coat effect. And you see that especially during the night, there is a very significant effect of aprocitentan. And you must not forget that these patients were basically treated at least by 3 anti-patent medication, but more than 60% were with 4 medications and some patients who are under 5 or 6 anti-patent drug. Next slide. So aprocitentan has been filed with -- at the FDA and the PDUFA date is in December this year, and Janssen will be responsible for commercialization of this product. Selatogrel. Next slide. Selatogrel is really very innovative product. It's a very short active and fast active because it's also given subcutaneously with an autoinjector. It's an antiaggregant which can be given by the patient himself. We can auto administer this drug. And this should change the approach of the myocardial infection. Next slide. Because today, patients with such a pain -- with a thoracic pain need to call the emergency unit, the ambulance and it takes an average 3 to 4 hours before the patient is treated. Here, just a few minutes after the pain, the patient has been trained to inject himself, then call the emergency unit. And then you saved 3 or 4 hours of progression of the myocardial infection, and we know that these are the essential hours, which are going to define and determine the future of this patient. Next slide. We have also started the CARE study, which is a study of cenerimod in lupus with 1 dose -- which has been defined by the Phase II and show the really very significant and meaningful improvement of disease activity with an effect which increased with time and which has been very well characterized, especially, which has been shown to be much higher. The treatment effect is much higher in patients with a high interferon gene signature. And of course, we could define the safety of -- and the good safety profile of cenerimod at this dose. And this has allowed us to start the Phase III program, next slide, where the OPUS program, which consists of 2 trials of each 420 patients, 210 in placebo, 210 in cenerimod, we have agreed for the design of the study with the FDA. Next slide. So as I have described, we are continuing to build the momentum in 2023. And we are going to have a higher and broader coverage in the U.S. This is a priority for us for QUVIVIQ. The aprocitentan has been submitted already in Europe. And we are waiting for the QUVIVIQ regulatory decisions for QUVIVIQ in Canada. And as mentioned, lucerastat is going to be discussed with the regulatory authorities and QUVIVIQ will be launched in Switzerland and U.K. and the NDA of QUVIVIQ will be submitted in Japan at the end of the year, and we will have also the decision for Aprocitentan at the end of the year. So I hope I have described the really very eventful, I think, 2023, which we will have. Thank you very much.

Thank you, Jean-Paul. With that, we have come to the end of our prepared remarks and are ready to take your questions. First, a few housekeeping rules, please. May you refer your questions to one only and then jump back into the queue. Operator, please populate the lines.

[Operator Instructions] We will take our first question, and the question comes from the line of James Gordon from JPMorgan.

James Gordon from JPMorgan. I do have one question and which would be funding. So what near-term options are you weighing? Are you potentially considering an equity raise and then to tie you over until later in the year? Or are you still optimistic that we could see a partial divestment on apro economics? And if the latter, what is the trigger that is needed to get over the line? Might you have to wait for apro to be approved or the filing accepted? And maybe if I could just squeeze in a clarification, not a question, which is there was talk about higher stock option expense. Does that explain that why there's a bigger difference between core and reported OpEx this year? Should we assume something like a CHF 40 million step-up in option expense?

Thanks, James. So those are actually 2 questions. Thank you for squeezing that in.

I follow your rule and so I only take your second question No, James. First question on funding. Well, first, we've always been transparent that we are not funded to breakeven. With the guidance that we gave at CHF 650 million compared to CHF 466 million cash by the end of 2022. Obviously, we need to raise cash relatively in the next few -- in short term, next few months. We are looking at several possibilities to a fancy company. non-equity dilutive remain our preferred option. I will not tell you where we are in the discussions with potential royalty monetization investors. Jean-Paul also alluded to a discussion on potential out-licensing deals. So these are the 2 main avenues for non-equity dilutive funding. But the saying it's a preferred option does not include -- exclude sorry, equity dilutive. And here, it would be equity because I think that a convertible bond would be highly unlikely in the current market conditions. So we're -- at the end, we really wanted we remain nimble and will remain pragmatic to enter the business continuity at Idorsia. Your second question regarding this stock-based compensation -- stock-based compensation. The impact this year -- this is valid for 2023, what I described you. So the impact this year is really limited and see rules were clear, bonuses, except for the executive teams are paid in cash, sets it for 2022. But for 2023, as I said, we changed these rules. So we're 70% of the bonus across the organization will be paid in shares. And again, a fair fight for talent, especially in Switzerland, but also in the U.S. And to the extent, we believe that the retaining people, we see Ambition 2027. Again, look at the government's report will help us. But that's not cash, that's only a P&L impact, and that's why we have it as a reconciliation item between non-GAAP and U.S. GAAP.

We would take our next question and the question comes from the line of Harry Sephton from Credit Suisse.

So it's on net pricing for QUVIVIQ. Based on the reported sales and scripts for Belsomra, it has a net price of about $150 a month. Is that a good benchmark that we can use for QUVIVIQ given your reimbursement negotiations with the BSI? And what proportion of employers have currently opted in for QUVIVIQ coverage?

Thank you, Harry. Simon, I think that one's for you.

Yes, we're not going to give net price guidance. I mean, clearly, right now, we're have a lot of drug given away free because of VitaCare as we generate demand and generate coverage. But I will say, of course, that we priced QUVIVIQ at a premium at the WACC level because of the premium profile that we believe the drug has and it's important for us to continue to try to sort of flow that down as we go through the various different of rebate discussions and net conversations that we have. Right now, it's difficult to give you an exact number on coverage in the commercial space because obviously, you've got a number of downstream plans that we're working through. We have a number that already in because as I think I've mentioned to you before, when you launch, you usually end up with something in the order of 20% open coverage for plans that either are not that well controlled or where they give you sort of a conditional access whilst you're negotiating. But I think our broad estimate right now is that we're probably somewhere in the sort of mid-40s in terms of commercial coverage and that we would expect to start to move that up into the 50s as we start to bring through the downstream that I referenced with ESI when we get into sort of quarter 2.

Our next question comes from the line of Rosie Turner from Jefferies.

I'll jump back in queue after this one. But yes, so, lucerastat, that long-term extension study, did I hear just towards the end of the call that, that is being discussed with authorities. I think we saw on the FDA website, it's been extended out further. So is there something going on there? Is it something that could kind of -- we should potentially be thinking about adding back into numbers?

Thank you, Rosie. Jean-Paul, do you want to comment on...

I think we have been waiting really to get 2 years data on the renal effect of lucerastat, which are, in my mind, quite impressive. We have also measured subgroup, some very specific subgroup of patients. I do not want to give competitive information. So -- but we need to discuss with both Europe and the U.S. in order to really see where we can go. It's very clear that the drug is active, but this is a regulatory issue.

Just very quickly, Rosie. So yes, that observation is correct. The open-label extension was extended from 48 months out to [ 10 ] years, given that the first patients were actually reaching that 4-year mark.

Our next question comes from the line of Thibault Boutherin from Morgan Stanley.

So on QUVIVIQ sales expectations for this year, when we look at your guidance, it looks like you're expecting roughly CHF 100 million for QUVIVIQ globally. So if you could just help us understand the split that you expect broadly between U.S. and ex U.S? And then second, I mean follow up on this in the U.S. dynamics for QUVIVIQ, right now summarized and you are arriving around $80 million a year in the U.S. So if you could help us understand the dynamics for QUVIVIQ in the U.S. in terms of, I guess, one side, this prescription growth, other side is transition to paying prescriptions? So if you could help us how we should -- how you're kind of thinking about this for the year. And basically, does this mean that the vast majority of sales for QUVIVIQ this year should be kind of back-end loaded towards the end of the year?