Idorsia Ltd (IDIA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Idorsia Full Year 2024 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 first speaker today, Andrew Jones, Head of Corporate Communications. Please go ahead.

Thank you, Sonia. Good afternoon. Good morning, everyone, and welcome to our webcast to discuss the 2024 financial results. On the call today, we have our CEO, André Muller; our President of the EUCAN region, Benjamin Limal; our President of U.S., Michael Moye, joining us in this capacity for the first time since the departure of Tosh; our Chief Scientific Officer, Martine Clozel; and our Chief Financial Officer, Arno Groenewoud. Then joining us for the Q&A session, we have our Group General Counsel, Julien Gander in case of questions related to the recently announced agreement. So a lot to get through today. Next slide. Before handing over, I need to remind everyone that we will be making forward-looking statements. You have therefore been appropriately warned about the risks and opportunities of investing in Idorsia shares. With that, I hand over to André for his introductory remarks. Next slide.

Yes. Thank you, Andrew. Good afternoon or good morning, everyone, and thank you for joining the call today. Before going into the '24 highlights, let's deal with the elephant in the room, the envisaged out-licensing agreement for aprocitentan that we eventually could not close for reason unrelated to the drug. As you can imagine, the undisclosed party did not agree to pay an exclusivity fee of USD 35 million without a thorough assessment of the quality of the data and see the potential of aprocitentan, very frustrating, but we need to move on and now pivot to potential alternative partners. As a result of this unexpected setback, we need to look for alternative ways to keep the company operational. Due to tight time lines, we had to discuss with partners that had a vested interest in Idorsia. One partner is Viatris. The original deal was in March 2024 and secured the future selatogrel and cenerimod 2 Phase III programs, allowing Idorsia to retain long-term upside through potential milestone and royalties. Last week, we announced an update to the agreement that reduced Idorsia commitment to R&D costs by USD 100 million, which was due in 2025, therefore, relieving significant pressure on our cash. At the same time, we have worked with bondholders for a holistic restructuring of the convertible bond debt to remove the debt and cash overhang and to fund the company's operation with a new money facility of CHF 150 million. This is obviously, a huge relief, but with so much attention going to the financial situation of the company during the past months, it's easy to lose sight of how well the company was performing in other areas. Let's start with QUVIVIQ. QUVIVIQ is doing well around the world and particularly in the European and Canadian region. We call it Q-tab. Benjamin will give you an update today. We could also slightly grow the sales in the U.S. despite some significant lower marketing and selling investments. And Michael will also give you an update. Aprocitentan, we have secured the approval of TRYVIO in the U.S., JERAYGO in the EU. And we strongly believe that aprocitentan has a potential to revolutionize a serious and growing public health problem. Michael will give you an update on the launch preparation in the U.S. and Martin will also give you more background on what was called and considered up to recently as resistant hypertension, where the risk of cardiovascular complications, such as strokes, heart failure, renal failure, is considered almost twice higher than in the usual forms of hypertension. Martin will also give you some color on our R&D portfolio. And finally, Arno will provide the usual financial update for 2024 and the guidance for 2025. As Andrew said, a lot to get through, so I hand over to Benjamin for the EUCAN commercial update. Benjamin, the floor is yours. Next slide.

Thank you, André. Good morning and good afternoon. QUVIVIQ is now available in 9 countries across Europe and Canada, our EUCAN region. We launched QUVIVIQ in Germany and Italy in 2022 and the most recent launches were France and Sweden, respectively, in March and September '24. QUVIVIQ is the first and only dual orexin receptor antagonist in the European market and has been described as the most significant recent development in the pharmacological treatment of insomnia by European Sleep Research Society in its recent guidelines. This innovative class has also been recognized by local authorities, resulting in full reimbursement in 3 countries already: Germany, France, the U.K, with rapid and considerable impact on our sales trajectory, allowing the EUCAN region to achieve CHF 32 million of net sales in 2024. Sales have shown a steady increase in the first 3 quarters of '24, as you can see. But then you see also the recent acceleration in Q4, particularly driven by a great performance in Germany and an outstanding launch in France. Overall, France and Germany have been the 2 drivers of our '24 performance with, respectively, CHF 12 million and CHF 11 million, and I will share more details on these 2 countries today. Next slide, please. This slide represents the actual QUVIVIQ demand across the EUCAN region. These are the sales from wholesalers to pharmacies. And overall, in 2024, we distributed more than 15 million QUVIVIQ tablets across the region. That's 15 million restorative nights' sleep and 15 million revitalized days. There are 2 main takeaways from this chart: first, as I mentioned, the Q4 acceleration in the QUVIVIQ demand mainly driven by France and Germany; and second, the importance of reimbursement in the EUCAN region where 90% of QUVIVIQ demand is coming from markets where we have been able to secure reimbursement. And here, I include the private reimbursement in Canada. So since public reimbursement is so critical in the EUCAN region, let's take a look at the current status country by country. Next slide, please. Starting from the top in Germany, as already reported, QUVIVIQ is the only insomnia treatment that does not have the 4-weeks prescription limitation. I'm very glad to share that we've been able to finalize the pricing negotiations with GKV Sd. and positive final outcomes of these 2 steps, 2 years process with AMNOG will be made public in early March. In the U.K., QUVIVIQ is recommended as a first-line pharmacological treatment for patients with chronic insomnia after or as an alternative to CBTI. Priority in the U.K. in '24 was to secure regional access and the team has achieved reimbursement throughout 85% of the U.K. population already. In France, [ ISM F4 ] and rapid pricing negotiation allowed us to have QUVIVIQ launched at the end of March '24, and I'll share more details on the French performance. In Canada, QUVIVIQ is available to private market patients since November '23. Private markets represent almost 55% of the Canadian insomnia market. And so far, 85% of the private Canadian life are covered. In parallel, we now have submitted QUVIVIQ to both INESS and CDA, and we expect final public reimbursement decisions by the end of 2025. Now moving to the countries where we have launched out of pocket or self-pay. Let's start with Italy. QUVIVIQ was launched in Italy in the self-pay market in November 2022, with prescribers restricted to only psychiatrists and neurologists who account for approximately 20% of the insomnia market. AIFA recently agreed to expand the prescription rights to all specialties, including GPs, allowing us to now cover 80% of the market potential we've been excluded from in the last 2 years. In Spain, QUVIVIQ was launched in the self-pay market in September '23. Public reimbursement dossier was submitted last year. We expect final decision around mid-'25. Spain is the biggest insomnia markets in EUCAN and Spanish health authorities are very well aware of the problem of addictive treatment use they are facing since years. We are also in discussion with Swiss and Austrian authorities to make QUVIVIQ publicly [ resourced ]. Next slide, please. As agreed, I now would like to focus on the 2 countries which generated 70% of our '24 sales, starting with France, where we launched in March to specialist only first and where we expanded promotion to GPs in October of last year. Just 2 numbers I'd like you try to recall. 450,000 tablets were sold in September '24. 3 months later, in December '24, we sold 1.4 million tabs in France. We've tripled the QUVIVIQ demand in 3 months, thanks to our co-promotion partnership to GPs with Menarini who deployed 160 certified reps, sorry, to promote QUVIVIQ to the French primary care prescribers with, as you seem, immediate impact on our performance in France. Next slide, please. Next, country focus, Germany, where we have launched in November '22, and we've been managing a 2-year long access and pricing process now coming to its end. Germany quarterly growth kept increasing steadily, especially to represent 40% of the market potential, clearly have now adopted QUVIVIQ, thanks to our marketing and medical activities. We are today very excited to announce that we've agreed a commercial partnership with Berlin-Chemie, a Menarini company, to reach the GP prescribers who represents 60% of the market in Germany. 216 reps will [ 16 cams ] will visit GPs from April '25. And we strongly believe this co-promotion will strengthen and accelerate our uptake in Germany. Next slide, please. So to conclude with EUCAN region, I want to remind you about the massive opportunities the insomnia market represents with almost 4 billion tablets sold every year in a large majority coming from outdated products having many known issues. We've made great progress in '24 through our targeted marketing activities, our very precise commercial execution to increase QUVIVIQ awareness first to specialists and then to GPs. These efforts are paying off with more and more prescribers who have adopted QUVIVIQ to treat their chronic insomnia patients. Best illustration of this progress reflected by our new patient share, clearly demonstrating that our commercial efforts with QUVIVIQ in the EUCAN region are beginning to translate into promising success. I'm very confident, especially with the commercial partnership, such as Menarini in France, Berlin-Chemie in Germany, that QUVIVIQ adoption will keep accelerating in 2025. Thank you. Now handing over to Michael for the U.S. focus. Next slide, please.

Thank you, Benjamin. By the end of 2024, more than 175,000 U.S. patients have been treated with QUVIVIQ since launch, more than 550,000 prescriptions have been dispensed and the product has been prescribed by more than 50,000 health care professionals. Throughout 2024, we optimized our resources and promotional effort and adjusted our commercial approach to get more towards a payer paid model, and we made a lot of great progress on that. I'm very pleased that we've been able to see steady U.S. sales growth for QUVIVIQ the last year, and we've been able to increase the sales to over CHF 28 million despite drastically reducing our marketing and selling investments, notably by reducing our field force in April '24 from 250 reps to 100 reps. Next slide. We're limiting our commercial efforts in the short term while we wait for the anticipated de-scheduling of the dual orexin receptor antagonist class of sleep therapies. The citizen's petition that we submitted outlined scientific and medical evidence demonstrating that the DORA class has a negligible-of-use profile and lacks physical and psychological dependence and therefore, should not be a scheduled class under the Controlled Substances Act. Idorsia continues to be very confident there is a solid and very compelling case here. In fact, yesterday, I was in Washington, D.C. on Capitol Hill meeting in offices on both the Senate and the House side as we continue to find legislative advocates for our citizen's petition. De-scheduling the class would remove many, many access barriers for patients and the prescribers which add complications for physicians. And consequently, we hope it would unlock the true value of QUVIVIQ in the U.S. Next slide. So until the potential de-scheduling comes through, for 2025, the company has implemented a change to the commercialization approach for QUVIVIQ with the objective to continue to reduce operating costs while maintaining the sales. We have expanded our multiyear relationship with Syneos. This was primarily around our sales organization. Syneos Health will now be more of our commercialization partner. We've switched from around 100 field sales reps to 20 virtual sales reps operating remotely, and we're using very advanced analytics and digital strategies to be highly focused and targeted. Idorsia and Syneos will coordinate our marketing efforts, digital search and media, data analytics, our market access activities, all to support the virtual representatives and maintain sales. Next slide. And as you heard André mention earlier, in parallel, we've been preparing for the launch of aprocitentan or TRYVIO in the U.S. We made TRYVIO available to doctors and patients in October of 2024. There are millions of patients in the U.S. whose high blood pressure is not adequately controlled by other drugs. Again, you will hear this is a massive opportunity and unmet need within our health care system. Our team has fully developed the launch plan. We have a fully developed product campaign. Everything is properly planned out, including field sales force deployment and promotional activities. But the decision of the undisclosed party not to close the aprocitentan deal, urged the reduced U.S. team to execute a much more limited and focused launch of TRYVIO in the U.S. in order to maintain and increase the value of a potential out-licensing deal for aprocitentan. So we've been very encouraged by the initial and ongoing conversations with our KOLs, with our payers, who understand that TRYVIO is addressing a significant patient need and that treating these patients who remain uncontrolled at a very high risk, they are at a very high risk for serious cardiovascular events. So now to hear more about that, I'll pass it along to Martine. Next slide.

Thank you, Michael, and good morning, good afternoon. Picking up on aprocitentan, I would like to highlight a few points. Resistant hypertension, when subjects are still hypertensive despite 3 drugs or more at optimal dose, remains one of the biggest medical need in the field of hypertension. This form of especially difficult to treat hypertension is particularly seen in some population: patients with renal failure; African Americans; high body weight; or older range. When hypertension resists despite such combination of several antihypertensive drugs, this speaks for a key role of endothelin, which we know since more than 30 years as an important player in hypertension but which was not blocked by classical antihypertensive drugs. Aprocitentan is the first drug able to block the endothelin partway in systemic hypertension. Next slide. Aprocitentan is a once-daily tablet. It's 1 dose for all. It's easy to use for patients, easy to prescribe for physicians. It can be combined with other drugs and importantly, it can be used in patients with renal cell. Aprocitentan even on top of 3 drugs or more at optimal dosage and even after controlling for good compliance, decreased blood pressure by more than 15 millimeters of mercury from baseline. It was well tolerated long term with an extremely low number of discontinuations and also had an impressive effect of decreasing proteinuria. These properties taken together make aprocitentan a highly differentiated drug and ideal for the millions of patients who are unable to bring their hypertension under control with existing medications before aprocitentan, and particularly for difficult-to-treat patients with chronic kidney disease and hypertension. We are prioritizing the partnering of aprocitentan to make sure we can get this outstanding discovery to patients as quickly as possible. Next slide. I would like also to spend a few minutes talking about our other assets at late and at earlier stages of clinical development. As you know, we have put our portfolio of research and development through a rigorous prioritization, and we have limited our activities in R&D in order to make the money that we have last. Each portfolio compound has been assessed in the context of the competitive landscape for the feasibility of Idorsia to be able to develop alone or to be generating the appropriate preclinical and clinical proof-of-concept data enabling others to recognize the value of the asset. First, lucerastat. In Phase III, lucerastat are studying in a rare disease and also with so much experience with the compound and the treating community, we believe we can advance alone. We have already conducted the largest study for patients with Fabry disease. And also, we did not reach significance on the primary endpoint of neuropathic pain. Lucerastat showed a marked reduction in the decline of kidney function. This is a major medical need in Fabry disease. We are currently investigating in a small kidney biopsy study if this effect on eGFR slope is accompanied by a histological change. And we will see the results from this in the coming months. And at that stage, we will further discuss the regulatory pathway with the FDA. The next inflection point, therefore, is quite near term. Next slide, please. We then have an exciting and very unique early-stage clinical pipeline that has come from our discovery [ group ]. Funding permitting, we intend to develop this to the next inflection point before finding a partner unless someone is happy to join forces already today. For example, we have our ACKR3 antagonist former called CXCR7 antagonists for progressive multiple sclerosis. This first-in-class compound showed in every one of the preclinical tests we did, including human oligodendrocyte precursor cells, a unique combination of remyelinating effect and anti-inflammatory effect with decreased inflammatory cell infiltration. Second, we have a CXCR3 antagonist, which we plan to develop in vitiligo, another first-in-class targeting systemic therapy for vitiligo, targeting very specifically a system which is deemed to be very important in vitiligo pathophysiology. There is a huge medical need in vitiligo, where there's very, very few drugs and no drug systemically approved. These 2 compounds, CXCR7, or ACKR3, and CXCR3 are ready for Phase II proof-of-concept studies. Our CCR6 antagonist or immune-edited disorders, offers unique potential as a first-in-class overall targeted systemic therapy for effective treatment of T helper 17-driven diseases, which can be in immune-dermatology and in other autoimmune disorders. An earlier stage portfolio is composed again of potential first- or best-in-class compounds and this portfolio is, again, truly innovative. Time does not allow me today to go into detail for all of the preclinical assets, which we discovered, but again, we have really discovered very special compounds, such as, for example, our LPA1 receptor antagonist for immune-mediated and fibrotic-related disorders where I am convinced we have a best-in-class compound due to its insurmountable binding mode on the LPA1 receptor. It has proven inhibitory activity and efficacy as anti-inflammatory and antifibrotic in several preclinical models of inflammation and fibrosis; or CFTR Type 4 corrector for cystic fibrosis, a unique corrector targeting a totally new binding site on the CFTR protein, which has been identified again by our team to name just two. I'm happy to spend more time during the Q&A to give you more color of any compound in our portfolio. But for now, I hand over to Arno to take you through the financial update. Next slide, please.

Thank you, Martine. Good afternoon, and good morning to everyone following the call. Let's start by looking at the non-GAAP operating results. As you know, Idorsia has sold its APAC business to Nxera in July 2023. Therefore, we show you the 2023 pro forma, excluding the APAC business for a better comparison with 2024. More details are provided in the next slide. But here, you can clearly see that we were able to increase our revenues, but at a significantly lower cost. The lower cost, R&D cost is primarily due to the cost-saving initiatives that we implemented at the end of 2023 and the Viatris deal relating to the Phase III programs of selatogrel and cenerimod. Idorsia continues to assume clinical services and clinical costs for both programs, but these costs are netted against the deferred revenue, having no impact on our P&L. The SG&A cost reduction is primarily due to a reduction in sales and marketing costs in the U.S. and HQ, while we continue to invest in the EUCAN growth. This results in a non-GAAP operating loss of CHF 308 million, a reduction of almost 50% compared to 2023. Next slide, please. Looking now at the U.S. GAAP and non-GAAP operating results in more detail. The Idorsia-led business reported significant growth in QUVIVIQ sales from CHF 32 million to CHF 61 million, which is largely driven by the EUCAN region. In 2024, the partner business mainly includes the sale of intermediate products to partners on a cost-plus basis. This also explains the relatively high cost of goods. U.S. GAAP operating result of CHF 232 million includes CHF 125 million gain resulting from the Viatris deal and restructuring charges. The next slide, please. Let's now look at the cash development in 2024. We started the year with CHF 145 million in cash. During the year, we had cash inflows from product sales of CHF 107 million and cash outflows of CHF 263 million for SG&A OpEx and CHF 128 million for R&D OpEx, excluding the Phase III trials for selatogrel and cenerimod. Other cash inflows of CHF 10 million include working capital movements below EBIT items and the CHF 30 million royalty monetization with R-Bridge regarding AGAMREE, the DMD drug of Santhera. We received the USD 350 million cash inflow from the Viatris deal, which converted into CHF 308 million, of which USD 200 million were committed to fund the ongoing Phase III trial of selatogrel and cenerimod. This commitment was reduced by CHF 100 million in February 2025, which will result in no cash outflow for these trials in 2025. In 2024, we paid CHF 73 million as R&D contribution for the Phase III trials, leaving a CHF 27 million R&D commitment for 2026. This results in a cash balance of CHF 106 million at the end of 2024. Next slide, please. As mentioned by André, in the last weeks, we were able to secure the future operations of Idorsia through 3 key measures: as just mentioned, the amendment of the Viatris deal relieves Idorsia from USD 100 million R&D funding commitment for 2025; a holistic restructuring of the 2025 and 2028 convertible bonds, which removes the large debt and cash offering was a very important pillar of the future going forward; and finally, some of the bondholders backstopped CHF 150 million new money facility, which will fund the Idorsia business well into 2026. Next slide, please. This slide shows the result of the holistic restructuring that we announced last week. Both convertible bonds will be extended by 10 years from the original maturity date. So the CHF 200 million convertible bonds originally due in 2024 will be pushed out to 2034 and the CHF 600 million convertible bonds due in 2028 will be pushed out to 2038, with a put option in 2036. The agreement with certain bondholders means that we already know that around 75% of the existing Idorsia convertible bond debt will be exchanged for notes in the SPV that we are establishing. All remaining bondholders can voluntarily exchange their restructured Idorsia bonds for SPV notes. And I believe that the final amount left with Idorsia Limited will be lower than the CHF 205 million that you see on the slide. In addition, once it is clear that the final debt to be carried over will be, we will adjust our share count. 190 million shares issued by year-end 2024 will increase to approximately 220 million to CHF million shares depending on the percentage of convertible bonds exchanged. The 288 million diluted shares by year-end '24 will see a limited increase to approximately 294 million to 304 million shares, depending on the removal of the potential conversion from the existing bonds. As you can see, the issuance of shares and warrants associated with the holistic bond restructuring, together with the new money funding will bring the dilution to 14% to 15% on the shares issued and down to 2% to 5% on a diluted basis. Next slide, please. This slide shows the financial outlook for 2025 compared to 2023 and 2024 operating results of the Idorsia-led business. As already explained by Benjamin, we expect that the momentum in the EUCAN region will continue through 2025 and beyond, which drives the growth of QUVIVIQ sales to CHF 110 million. At the same time, we have and will further reduce our cost base to ensure that the money will last longer. This results in a further improvement of the non-GAAP EBIT loss to CHF 215 million. Next slide, please. And then finally, the guidance for 2025. As mentioned on the previous slide, an expected non-GAAP EBIT loss of CHF 215 million, which, together with contract revenues of CHF 50 million, results in a total non-GAAP EBIT loss of CHF 200 million. A U.S. GAAP result of CHF 155 million includes the USD 100 million R&D cost-sharing waiver by Viatris and the restructuring charges. Next slide, please. And I hand over to André.

Yes. Thank you, Arno. To conclude, I want to remind you of the priorities that we have set for 2025 and our immediate future. It's up to us to make the money last and make the right decision on how it is spent. We have already some clear priorities. Firstly, we continue to prioritize finding a partner for aprocitentan. I believe we can secure a great deal for aprocitentan and see us sooner, see a better because we will be able to repurpose the money needed for the U.S. launch activities. Secondly, the best way to solidify our future is to accelerate the success of QUVIVIQ in the EUCAN region. Our current forecast has us reaching commercial profitability with QUVIVIQ in 2026. The faster we can become commercially profitable, the greater the belief will be in Idorsia's future success. And we also continue our efforts to get the DORA class de-scheduled in the U.S. And there is a good chance, as Michael explained, that we can finally unlock the true value of QUVIVIQ in U.S. As we are seeing in EUCAN region, if we are able to remove this barrier, big barrier to prescription. Finally, we must leverage our innovative portfolio. We targeted the development of some of our assets and partnering others. This could be a great source of income to keep our R&D engine fueled. And with this, I hand back to Andrew to open the lines for the Q&A.

Thanks, everyone. And now we have time to take your questions. As I mentioned at the beginning, we were also joined by our Group General Counsel, Julien Gander for the Q&A. With that, operator, please open the line for questions.

Thank you. [Operator Instructions] And the first question comes from [ Henriette Bergh ] from Deutsche Bank.

Just a couple, please. Firstly, could you give us some time lines for the de-schedule for QUVIVIQ in the U.S. or any tangible next steps that you could share? Secondly, for TRYVIO, could you talk us through payer discussions and access levels and any conversations you've had so far? And then a last quick one, please. What do you consider to be the most important data point looking into the next 12 months?

Okay. I think we'll start with you, Michael, for the discussion of the de-scheduling time line and TRYVIO reimbursement. And then we'll come to André for the -- what he considers the most important item coming up.

Yes, absolutely. On de-scheduling, yes, we have benchmarked a handful of other products that have gone through this process and that leaves us we would project there's a lot of unknowns, of course, in Washington, but within the next year or so would be consistent with a few other products on the benchmark. So while we watch that, we're cautiously optimistic. It is a somewhat unpredictable process, but we have made a lot of great progress recently. And I think those benchmarks would put us in that next year to 18-month period, hopefully sooner. On the TRYVIO side, we are very -- continue to be very optimistic. The discussions with payers, I think this coming in at a later-line product, has allowed us to kind of naturally be in the approval process. In other words, the nature, as you heard Martine describe, of these patients is that they have failed multiple lines of therapies. And that has given us a very good path with most of the payers. I think they see the real value of the product and they see that these patients are truly struggling and many of these patients for years, sometimes decades, have been struggling with their hypertension. And this being the first new mechanism and first option in more than 40 years. We've been having a great recognition to the payers of that fact and that this is something that these patients desperately need. André?

Yes, Michael, thank you. So [ Henriette ], to your questions on the priorities. Actually, we -- as you just mentioned, all priorities are important to Idorsia. But the first one, you see are commercial goals. We see CHF 110 million sales with almost triple in sales for Europe and Canada and hopefully, doing a little better and maintaining sales in the U.S. It's very important for us because here, we are in control of our destiny. And this will bring us to a sustainable overall profitability. The second one is relating to aprocitentan. We are actively working, as you know, on the deal. And Michael and the U.S. team is also working in close collaboration with our partner, Syneos Health, on how we can go for limited targeted loads. And lastly, as Martine explained, we have really a unique, innovative portfolio pipeline assets. And here, we definitely need to see how we can bring these assets to the next inflection point. So we're -- if we believe that we need a partner, we'll try to find a partner. We have some discussions for this mid- or early-stage assets, one which was not mentioned by Martine because of lack of time, was also the Phase I for Clostridium difficile, where we expect results by the end of the first half of 2025. So we have a few inflection points here, demonstrating the potential value of the assets, proof of concept including, of course, and I mentioned -- Martine mentioned it with lucerastat because that's the next drug which has the potential to get market authorization across the globe. So we should be very happy. We see recent developments because we expanded significantly the cash runway. But we have a lot to do and plus reusing what you said that JPMorgan, I would say, we have a few mountains to climb, but I'm confident, and I'm sure that the view from the top will be fantastic.

And the next question comes from the line of Joris Zimmerman from Octavian.

Maybe two. One on the financing and the restructuring of the situation there. With the creation of the special purpose vehicle, can you help me understand a bit better where the obligation related to the aprocitentan reacquisition fits? So where is this obligation now to be considered? And what's the priority of repayment? And then the second question on your pipeline. What do you think is a realistic time line for us to host for additional updates and understand a bit where you go with the assets that you just showed in the presentation?

Okay. Thanks for that, Joris. I'll hand over to Arno for the first question.

Yes, so the SPV will acquire the Viatris contract for selatogrel and cenerimod plus aprocitentan. And any income that will come from these assets, 30% of aprocitentan will go to J&J and 10% of selatogrel and cenerimod income will go to J&J. That remains unchanged. So that will come to Idorsia. Idorsia will pay you to J&J.

And then, André, what are you thinking on the time lines?

Yes. Maybe just to add on the SPV, Joris. Meaning that the remaining 70% or 90%, respectively, for aprocitentan and Viatris selatogrel and cenerimod will go to the SPV, i.e., repaying the SPV notes. So we're -- that's also very, very important. And because as you have seen, almost 75% of the bondholders have agreed to exchange the existing convertible bonds or SPV notes. So it's at approximately CHF 600 million that will be -- will move from Idorsia Limited to SPV. Regarding the pipeline, you know it's -- we have some inflection points as mentioned with lucerastat and Clostridium difficile. So that's mid of this year, so stay tuned. And for all the other assets, it's like out-licensing or M&A process, where you cannot predict what the outcome could be, but we are actively discussing with potential partners to maximize the value of all compounds in our pipeline portfolio.

[Operator Instructions] We have no further questions on the telephone lines. I would now like to hand back to -- we have one more question on the telephone. Would you like to take it?

Yes, please. Go ahead.

We will now take a follow-up question, and the follow-up question comes from Joris Zimmermann from Octavian.

Yes, sorry for bothering you. Maybe just one additional question on going forward, funding your operations. Is it correct for me to assume that the funding will come from the QUVIVIQ sales from this new backstop money facility? And then any potential R&D pipeline deals that you will realize? Or is there any potential additional income streams that I have missed now?

André, do you want to take that on? Where we're going to get our future funding from?

Yes. We are still investing, Joris, to be a clear, in QUVIVIQ, reducing the loss which we incur. So the sooner we drive the sales better and faster, we'll reach breakeven and profitability. So that's for QUVIVIQ. For aprocitentan, as you understand, there's nothing to be expected in Idorsia Limited because any proceeds will go to the SPV to repay the SPV notes and to J&J to repay the contingent liability in connection with the return of the aprocitentan rights. So you're right, the new money facility, CHF 150 million, plus, I would say, the removal of USD 100 million R&D commitment in connection with the deal with Viatris will bring us well into 2026. And of course, we no longer have to repay in 2025 the SPV convertible bond 2025. And we will no longer have to pay down the road and with investors a put in August 2026, the CHF 600 million convertible bonds. That's what Arno explained as being -- removing a significant debt and cash overhang. And now on top and above, if we manage to secure some up-front payments in connection with some deals from our portfolio, this will definitely help to extend even more the cash runway of Idorsia.

As there are no further questions on the phone lines, I would now like to hand back to Andrew Jones for any closing remarks.

Thank you, Sonia. So this concludes the call for today. Thank you, everyone, for your time. Keep an eye out for the publication of the annual report 2024 on March 27, 2025. This consists of the business report, the governance report, compensation report, sustainability report and the financial report, which was already published today. We have our first quarter results on April 30, our AGM on May 28, and we look forward to speaking with you again at latest at our next scheduled webcast with the half year financial reporting on July 30. And with that, operator, please close down the lines.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.