Jazz Pharmaceuticals plc (JAZZ) Earnings Call Transcript & Summary

Good day, and thank you for standing by, and welcome to the Jazz Pharmaceuticals Conference Call and Webcast to Review Xywav Idiopathic Hypersomnia Data Presented at the 2021 American Academy of Neurology Annual Meeting. [Operator Instructions] I would now like to turn the call over to Dan Swisher, President and Chief Operating Officer. You may begin.

Thanks, Kevin. Welcome, everyone. I'm Dan Swisher, President and Chief Operating Officer at Jazz Pharmaceuticals. Thanks for joining us for today's webcast to discuss the positive results from our Phase III clinical trial of Xywav in idiopathic hypersomnia or IH. On today's call, we will be referencing a slide deck that is available on the Jazz corporate website. You can find the deck in the IR section of the website under Events and Presentations. So on Slide 2 of this deck, I want to point out that we will be making forward-looking statements during today's presentation. Actual results may differ materially, and the forward-looking statements are subject to risks and uncertainties that are described in our SEC filings. Turning to Slide 3. On today's call. I'll provide an overview of IH and how we are planning to bring Xywav to IH patients pending FDA approval. Dr. Rob Iannone, our Head of R&D and Chief Medical Officer, will review the Phase III data that was presented earlier today at the American Academy of Neurology Annual Meeting. We will then open the call to Q&A. For the Q&A, Rob and I will be joined by Dr. Phil Jochelson, who is the therapeutic area head who leads our neuroscience clinical development at Jazz. We're excited about this opportunity. We have to improve the care of patients with IH, which is emblematic of how we approach patient-centric innovation at Jazz. As outlined on Slide 4, in our 2 therapeutic areas, neuroscience and oncology, we follow the same approach of focusing on areas of high unmet need that will also provide significant market opportunities. Additionally, these focused therapy areas enable us an efficient commercialization approach with focused field forces calling upon targeted physician audiences. We identify and develop unique durable assets with the goal of turning them into treatments that are truly differentiated from current therapies either on the market or in development. And we leverage our integrated product development and commercialization capabilities with a growing global infrastructure to transform the lives of patients around the world. Bringing Xywav to patients with IH is one of several exciting opportunities in our pipeline, which is shown on Slide 5. We're excited to turn this robust and productive pipeline into sustainable future product growth at Jazz. We have recently increased our investment in the preclinical early development phase across a number of potentially transformative assets. Last year, we demonstrated, with the launch Xywav, the one only low sodium oxybate therapy in narcolepsy that Jazz can take an initial concept fully from idea to commercialization. In addition to the programs on this slide, with an expected closing of our acquisition of GW Pharma, this quarter, we would add a significant new commercial product, Epidiolex, a new treatment for seizures associated with rare childhood-onset epilepsies, along with a pipeline and platform of novel cannabinoid programs directed at a range of underserved neurologic conditions. Now as seen on Slide 6, we continue to build off the strong momentum generated in 2020. We're excited to continue to expand and diversify our pipeline and revenues through disciplined investment and excellent teamwork. On the commercial front, we have 2 exciting launches planned on the oncology side, a midyear launch of JZP-458 in ALL; and in the fourth quarter, of course, the launch of Xywav in IH along with continuing to drive growth from the recent launches in 2019 and 2020. On the R&D side, we're initiating clinical trials for several novel programs and indications across both oncology and neuroscience. So now let's dig into the idiopathic hypersomnia and the opportunity for Xywav. On Slide 8, this outlines the defining features of IH. Idiopathic hypersomnia is a debilitating illness for which there are no FDA-approved treatments. This hypersomnolence disorder is characterized by excessive daytime sleepiness. The underlying pathophysiology is not known. On Slide 9, IH is a lifelong condition. So patients, their physicians and caregivers have to think about treatment options in this context. Typical onset of disease is before 30 years of age and is chronic in a vast majority of patients. On Slide 10, while sharing some characteristics with narcolepsy, IH is a separate hypersomnolence disorder with its own very specific diagnostic criteria. Excessive daytime sleepiness for IH patients is characterized by prolonged nonrefreshing nighttime sleep and long and unrefreshing naps, often with severe sleep inertia, a prolonged difficulty to wake up. On Slide 11, Xywav is breaking new ground and beginning to address this severe disorder. We have recently announced, our sNDA is under a priority review with an August 12 PDUFA date. We are planning post the timely REMS implementation for a fourth quarter commercial launch. Based on a recent chart review of insurance claims that we conducted, there are 37,000 diagnosed IH patients in the U.S. This is likely a number that still is understated by under or misdiagnoses, given no approved treatments to date. IH is treated by a small physician audience that has a 90% overlap with our current call universe. As a team, we're motivated to address this debilitating illness that can significantly affect social, school and occupational functioning with a constellation of symptoms that significantly degrade one's quality of life. So now I'd like to turn the call over to Rob to highlight the results from our recent Phase III trial. Rob?

Thank you, Dan. This is Rob Iannone. I'm EVP of R&D and Chief Medical Officer at jazz, and I'll be reviewing the results of our Phase III Xywav idiopathic hypersomnia trial. These findings were presented earlier today by Professor Yves Dauvilliers during the Plenary Session at the American Academy of Neurology Annual Meeting. Turning to Slide 13. Idiopathic hypersomnia, or IH, is a central hypersomnolence disorder with key clinical features and excessive daytime sleepiness, prolonged nighttime sleep and sleep inertia. Sleep inertia is defined as profound difficulty in waking after sleep. IH is associated with decreased quality of life, impairment in work functioning and with an increase of motor vehicle accidents. Currently, there are no approved treatments for IH. Lower sodium oxybate Xywav is a novel oxybate medication approved in the United States for the treatment of cataplexy or excessive daytime sleepiness in patients 7 years of age and older with narcolepsy. This Phase III study was designed to evaluate the efficacy and safety of Xywav in adult patients with IH. On Slide 14, we've outlined the patient population enrolled in this clinical trial, which included adults 18 through 75 years of age with an IH diagnosis according to ICSD-2 or ICSD-3 criteria. Participants were required to have an average nocturnal total sleep time of at least 7 hours. Participants could be either treatment-naive or taking medications for the treatment of IH symptoms, including sodium oxybate, alerting agents or both. Those participants who have been previously treated with sodium oxybate were required to have clinical improvement of EDS with sodium oxybate treatment. Participants not previously taking sodium oxybate were required to have an Epworth Sleepiness Scale or ESS score of at least 11 or greater. Participants treated with alerting agents were required to be on a stable dose and regimen of at least 2 months prior to study entry and have an ESS score of 11 or greater. They were required to remain on the same dose through the study. Alerting agents were either traditional stimulants or wake-promoting agents. Slide 15 features a trial design schematic. Participants taking sodium oxybate at study entry initiated Xywav at the same dose and regimen and maintained that dose for the first 2 weeks of the titration and optimization period. Participants not taking sodium oxybate at study entry initiated Xywav dosing either once or twice nightly at the discretion of the investigator. For once-nightly regimens, the maximum starting dose was 3 grams. And for twice-nightly regimen, the maximum starting dose was 4.5 grams per night. The dose of Xywav could be adjusted during the titration and optimization period to optimize efficacy and tolerability. All participants entered the open-label titration and optimization period with the goal of optimizing efficacy and tolerability. Participants then entered a 2-week stable dose period, during which they remained on their individually optimized dose of Xywav. Participants were then randomized one-to-one to continue taking Xywav or to take placebo for 2 weeks during a double-blind randomized withdrawal period. Participants who completed the double-blind randomized withdrawal period entered a 24-week open-label extension period. The primary efficacy endpoint was change in ESS score from the end of the stable dose period to the end of the double-blind randomized withdrawal period. And the key secondary endpoints were the proportion of patients rated worse on the Patient Global Impression of Change, and change in total score on the IH -- sorry, IHSS scale or Idiopathic Hypersomnia Severity Scale from the end of the stable dose period to the end of the double-blind randomized withdrawal period. Now on Slide 16, we show patient demographics and baseline characteristics. 154 participants who enrolled and took at least 1 dose of Xywav comprised the safety population. 115 patients who took at least 1 dose of double-blind treatment after randomization were included in the modified intent-to-treat population. Demographics and baseline characteristics were well balanced in the randomized treatment groups. There are 2 items that I'd like to call your attention to. First, the median total dose of Xywav in the stable dose period was 7 grams per night. As I note, the majority of patients received Xywav twice nightly. For those patients on twice-nightly Xywav -- on the twice-nightly Xywav regimen in the pivotal narcolepsy program, this is the narcolepsy study 15-006, the median dose was 7.5 grams, which was comparable to the median dose of Xyrem for patients -- sorry, Xywav for patients in the twice-nightly schedule in this study. Relatively few oxybate experienced patients entered the trial, which is highlighted in the table. This mirrors what we see in clinical practice where the majority of IH patients do not have access to oxybate therapy as it is not currently approved for IH treatment. Now moving to the safety findings in the trial, which are on Slide 17. The safety profile of Xywav in patients with IH was consistent with that -- what we've observed in narcolepsy patients. The overall incidence of treatment-emergent adverse events was 79.9%. Common treatment-emergent adverse events reported by greater than 10% of patients were nausea, headache, dizziness, anxiety and vomiting. Serious adverse events were reported by 4 participants, as noted on Slide 18. None were deemed related to study drug. These included rhabdomyolysis, nephrolithiasis, noncardiac chest pain, pyelonephritis and syncope. 27 participants reported treatment-emergent adverse events leading to discontinuation. These occurred most frequently during the titration and optimization period. 2 were in the stable dose period, and 2 were in the randomized withdrawal period. TEAEs -- sorry, treatment-emergent adverse events leading to discontinuation that were reported by more than 1 participant included anxiety, insomnia, nausea and confusion. Now turning to the efficacy findings, beginning on Slide 19. Mean ESS scores improved with Xywav treatment during the titration and optimization period and were maintained during the stable dose period. In the modified intention-to-treat population, the mean ESS score was 15.7 at the beginning of the study and 6.1 at the end of the stable dose period. During the double-blind randomized withdrawal period, ESS scores remained stable and participants randomized to continue Xywav and worsen, which is seen as an increase in these scores, in patients who were randomized to placebo. Mean scores at the end of the double-blind randomized withdrawal period were 7 in the Xywav group and 13.3 in the placebo group. The difference between treatment groups was a change in ESS of 6.51, which was statistically significant with a p-value of less than 0.0001. The Patient Global Impression of Change was a key secondary endpoint that was -- that evaluated the proportion of participants reporting worsening of their symptoms either minimally, much or very much at the end of the randomized withdrawal period relative to the end of stable dose period. As shown on Slide 20, the proportion of participants reporting worsening was greater for participants receiving placebo at 88.1% compared to those receiving Xywav at 21.4%, a difference that was statistically significant with a p-value of less than 0.0001. Change in the Idiopathic Hypersomnia Severity Scale, which is shown on Slide 21, was also an important secondary endpoint. The IHSS is a 14-item self-report measure to assess the severity, frequency and consequences of key symptoms of IH. The maximum score for the IHSS is 50, with higher scores denoting more severe symptoms. Mean IHSS scores declined during the titration and optimization period, indicating improvement. And improvement was maintained during the stable dose period. In the modified ITT population, mean IHSS scores were 31.6 on day 1 and 15.3 at the end of the stable dose period. During the double-blind randomized withdraw period, worsening was observed in participants randomized to placebo compared with participants randomized to Xywav. The mean score at the end of the double-blind randomized withdraw period was 16.9 in the Xywav group and 28.5 in the placebo group. The difference between treatments was a change of IHSS of 12, which was statistically significant, again with a p-value of less than 0.0001. On Slide 22, in conclusion, the results of this study demonstrated not only statistically significant, but also clinically meaningful effects of Xywav on excessive daytime sleepiness, IH symptom severity and self-reported global impression of change in adult participants with idiopathic hypersomnia. The overall safety profile of Xywav was consistent with sodium oxybate, and if approved, will represent a long-awaited and meaningful treatment option for patients suffering with IH. That concludes our prepared remarks. Operator, will you please open up the call for question and answers?

[Operator Instructions] Our first question comes from Jessica Fye with JPMorgan.

I was curious, you mentioned sleep inertia as a problem in idiopathic hypersomnia patients. Did you look at any measures of sleep inertia in this study? And if so, is there anything you can say about that?

Sure. Phil, do you want to take that one?

Yes. Happy to, Dan. Thank you. Yes, we did measure sleep inertia. We measured it 2 ways. It's -- in the idiopathic hypersomnia severity scale, it is a subscale around sleep inertia in that as well as visual analog scale of sleep inertia is another endpoint as well. We plan to present that data at the upcoming meeting probably within this half of this year. And I think the -- you can assume that there's some favorable results there, but we're not going to get into the details of that at this time.

Okay. Great. And on the percentage of patients who discontinued during the open-label titration period, can you talk about that, how that compares to other benchmarks with patients initiating Xyrem, for example?

Yes. Go ahead, Phil.

Go ahead, yes, I'd be happy to. Yes. So we haven't disclosed all of that, of course, publicly yet, but I can tell you it's very similar to the types of TEAE discontinuations that you get with oxybate clinical trial that we saw in our narcolepsy study as well. Of course, there's a range of reasons. Some of them are most AEs. Some of them are "deviations." Some of them are subject to withdrawal. And some of them noncompliant to study drugs. There's several examples of why -- of reasons that people dropped out that we haven't provided the details around at this time.

Jess, I would say, when we designed the study, we expected a certain amount of drop off. So we had plenty of power by the time we got to the randomized withdrawal portion.

Our next question comes from Jason Gerberry with Bank of America.

I was wondering, can you give us a sense of the proportion of patients who had long-form sleep versus those without long-form sleep? And what I was wondering is, with sleep duration, a prespecified subgroup for purposes of any efficacy analyses and could we see any data in the 24-week extension period that might inform how Xywav ultimately lessened sleep duration in these patients with long-form sleep?

Yes. So I -- we had a combination of both. I don't think we've broken that out. Phil, do we have any further detail on that?

Yes. Well, I will say the trial was open to both long-sleep potential essential sleepers. And we did include -- we do have both populations embedded within the clinical trial. We will also be presenting the data on those 2 subgroups at an upcoming meeting in the not too distant future this year.

If I could just squeeze in a follow-up, can you confirm there was no suicidal ideation? I didn't see depression or suicidal ideation mentioned, but I believe it may be at the background, right? Might be higher in an IH patient? And then knowing that, that's a prominent risk warning in the Xywav label, just curious how we should think about that risk?

Phil, anything from the trial?

Yes. Yes. Well, I don't -- I think there may have been -- we haven't disclosed this necessarily yet, but I think there may have been 1 event of that. As you say, it's not atypical to have that within an IH and/or a narcolepsy patient population. These are patients who also suffer from comorbidities. We've often talked about the cardiovascular comorbidities that they also have a lot of neuropsychiatric comorbidities that's been shown in several studies. And when you have a study of this duration, where there's a long titration period, and we haven't shown the data yet, there's also an open-label extension that goes out for a significant period of time. It wouldn't be an unexpected finding to have a small number of patients who may have, we think, that adverse event to report.

Our next question comes from Annabel Samimy with Stifel.

Just on the market, it's clear that there's not that much use of Xyrem in idiopathic hypersomnia. But I'm wondering how you think about the use of other wakefulness agents such as modafinil, armodafinil, any of the other wakefulness products and how -- whether any of these patients were using those or how it might be used in conjunction similar to narcolepsy for that matter?

Yes, Annabel, that's a great question. And I think -- and it's part of the reason there's quite a bit of effort and need for further disease education among clinicians. But the importance of restorative sleep is really critical here. Key symptomatology includes this sort of long, unrefreshing sleep at night. So it's not for lack of sleep, but it's not the restorative sleep. And I think that's likely a very important part of the oxybate mechanism and what we've seen with Xywav. Wake-promoting agents are used and probably will continue to be used for a daytime therapy. But similar to what we find with the more severe narcoleptic patients, the need for restorative sleep with a nighttime therapy such as Xywav is critical.

Okay. And if I could just squeeze in another. You had -- can you just clarify the -- you mentioned the total dose -- median total dose of 7 grams per night, I think. You mentioned in narcolepsy, the median dose was 7.5. So how should -- I guess when physicians are faced with options, sodium oxybate options, how do we get comfortable that Xywav is going to be that choice when the dose is being used are quite similar to Xyrem in narcolepsy? I guess I'm having a little bit trouble understanding why they wouldn't just switch from one to another if there's any kind of difficulty in getting Xywav.

Yes. Rob, do you want to take the dose question, and I can come back.

Lovely. I'll answer the specific question that maybe asked for a clarification. So in this study, we had a provision to allow patients to be once-nightly and cap that once-nightly dose of 6 grams. Now there weren't very many patients who ultimately got once-nightly. But when you look at the whole population, the median is 7 grams per night. If you just look at those from this study who got twice-nightly, then the median was 7.5 grams, and that's very, very comparable to the pivotal trials that we did with narcolepsy. So the conclusion basically is the doses that patients ultimately titrated to in this study are very similar to the narcolepsy population. But could you just clarify again the second part of your question around physician choices, et cetera?

Sure. I mean, I guess to what extent outside of the lower sodium option will physicians think is different from Xyrem?

Sure. So Xywav was the only oxybate ever studied in idiopathic hypersomnia. So there's no data with anything other than Xywav.

Yes. I think it's important to know that sodium does matter in this patient population as well. There's also a chronic debilitating disease where the amount of cumulative sodium will be of concern. And again, Xywav is a unique NCE with its own PK/PD profile. So this is the data that's going to support a FDA-approved label, which will differentiate itself from Xyrem or future sodium oxybates.

Our next question comes from Marc Goodman with SVB Leerink.

First question is, were the other secondary endpoints also consistent and just as robust the [indiscernible] that were reported here. And then secondly, were the subgroups, whether it was treatment-naive or patients on stimulants, did they both respond in the same way? Can you give us a sense of how robust that data was in the subgroups?

Yes. Let me hand it over to Phil and Rob, if you have any additional comments.

Yes. So as you can imagine, we would look at a variety of different subgroups as prespecified analyses not only for our understanding, but also for our FDA filing and submission. We have not shared that data yet about the subgroup analyses, and we plan to do so once again in upcoming meeting. What I can say is that they are consistent effect as you go through the different subgroups. And whether it's with or without the group coming in on stimulants and the other subgroups that we've had questions on earlier in this call, and we'll be able to give you -- share the details with you in the upcoming meeting that I think will be satisfactory answer to your question around that.

Yes. I think just to remind all of you, I mean, when we did the top line results, we talked about the results being not only statistically but very clinically meaningful. And maybe, Rob, you want to just comment on the effect we saw in the primary endpoint and where that puts the patients relative to normal?

Yes. It essentially brings them into a normal range for those scales. Thanks for raising that. And as you pointed out, we were well powered based on the number of patients that we thought would end through that randomized withdrawal period. But when you ultimately look at the effect size with all those key endpoints having p-values that are less than 0.0001, in hindsight, we're well overpowered, because the effect size we saw was so large on those key endpoints.

And to your point, once you get into the normal range, it's hard to see any improvements, so you're sort of getting to kind of forward effect. Phil, did you have anything further, that?

Yes. No, I just wanted to add, and Rob alluded to the statistical robustness, which is obviously clear and the clinical relevance of when we do the placebo control comparisons. But it's also important when we look at how they improved from baseline prior to randomization. I think that although not a statistical analysis, you can eyeball that data and watch how robust and the magnitude of the effect is during that open-label titration period that people are dialing into that optimal dose. And getting them into that normal range of Epworth starting at 16, which, as you know, is very similar to the EDS that you would see in a narcolepsy patient and then getting them down not only below 10, which is considered normal sleepiness. So you're getting them from pathological sleepiness category into a normal sleep range, but well and deep into that normal Epworth score. I will also say there's 2 other endpoints, the key secondary endpoints, the IHSS and the PGIc. And all of these are measuring different sort of domains, some overlapping, but some differences. And the consistency and reproducibility of those results across all of those endpoints and domains just speak to the clinical relevance of this finding in this patient population.

Our next question comes from Esther Rajavelu with UBS.

I just have a couple of quick ones. With regards to the titration period of up to 10 to 14 weeks, how does that compare to real world titration in the narcolepsy and cataplexy population?

Sure. Phil, do you want to answer that one?

Yes. I can say, I think, it compares -- it's very similar to what happens in the real world population. This is a drug that is titrated to effect. It's based on clinical response. And this sort of stepwise approaches to this in usually relatively small increments. We showed data, for example, at this meeting in a poster around the average number of changes and the distribution of the doses in the cataplexy population as an example. And you need to give people time to get the full benefit of this drug, and they titrate both up and down based on the clinical response. So I think that 12- to 14-week open-label titration period based off our narcolepsy experience seems to be relevant to the IH population as well. And it's not just the population, it's also oxybate as a therapeutic agent having a lot of flexibility in that dosing and also giving them time to titrate it to the optimal dose.

Yes. We find, Esther, in the real world in narcolepsy that the physicians who are experienced and know how to titrate their patients appropriately can really optimize both the safety and efficacy in narcolepsy. And we think that's going to be the same with IH, and we saw sort of a similar approach taken between these type of studies.

Got it. And if I can have one more, when -- for the drop-off rates during the pre-randomization period, was there a particular patient cohort where you saw more rates? Or was it fairly standard across the 4 arms?

Phil, do you want to comment any further on the drop-offs?

Yes. I don't have that data at this point, but there was nothing that stood out, to my recollection. But we have not shared that data. And I don't believe there was any consistent pattern in that regard.

Our next question comes from Greg Gilbert with Truist Securities.

I have a couple. First, what is the forum for -- the next forum for you to present some of these -- the answers that you're deferring today? Is there a logical near-term forum for that?

Yes. There's a range of various conferences that we typically present at. And similar to what we did with our narcolepsy data or with Sunosi data, we typically find multiple forums to present further readouts of secondary endpoints and subgroup analyses. So we're very pleased with those results, and we look forward to continuing to have certain headline news and get an opportunity to be in front of the physicians as we get close to product launch.

Okay. Then when one asks KOLs what they create IH patients with, they often say sodium oxybate already. Is it your view that many of these patients can't get oxybate covered by payers and that an approval of the indication will fundamentally change prescription demand or filling of prescriptions? Or do you think it's more of a play of underdiagnosis and your need to educate sort of put more into the funnel at the time?

Yes. That's an excellent question. And I think in the past, I mean, distant past, 5-plus years ago, it was easier for IH patients to get diagnosed and treated with sodium oxybate. But definitely, as payers have tightened the clamps down on utilization management, there's various IH patients that get dosed today. It would take a KOL or a physician quite a bit of heroic work with their payer to get that through. So we do -- our initial focus will be on the diagnosed patients, making sure with payer support that they can start to get the benefit that we saw in the clinical study in the real world. I do think, over time, we believe the 37,000, there is plenty of miss in underdiagnoses. And you may have seen our collaboration with the Hypersomnia Foundation, they're doing a survey of HCPs. Clearly, they feel as well that there's often miss and underdiagnoses occurring. So I think from a long-term perspective, there's an opportunity to grow the market, but near-term focus will be you ensure any diagnosed patient could benefit from the therapy can get onto Xywav.

And one last one, Dan. Is there anything you'd like to say about the interplay of Xyrem and Xywav prescribing so far year-to-date as it relates to net revenue? Or is that for the call?

Yes, that's for the earnings call in early May. We did issue an 8-K just in terms of top line, and we're very pleased with how top line is going, including the ongoing launch with Xywav.

Next question comes from Brandon Folkes with Cantor Fitzgerald.

I just want to come back to those 37,000 diagnosed patients now. Granted that there's no approved treatment, how many or what percentage of that 37,000 remain under sort of disposition care where you have overlap? And how much work do you have to do to drive those diagnosed patients back to that physician office? Or are they -- have they remained under that care?

Yes. No, good question. Our belief is that they remain under care, many of them with suboptimal sort of therapy, given the wake-promoting agents, et cetera. But that concentration of diagnosis when we looked at where the physician audience is, it's a very concentrated physician audience. And that same physician audience that represents 70-plus percent of those diagnosed patients fall into 90% of our call universe. So we're pretty confident with the physicians we're calling up on for narcolepsy and that we've had a multiyear relationship are the same ones treating the IH patients. So it's a great overlap in our sleep franchise.

The next question comes from David Amsellem from Piper Sandler.

Just a couple. So first, I've heard anecdotally from some key opinion leaders that the wakefulness promoting agents and stimulants in -- that are used off-label, of course, the outcomes are even worse with IH patients than they are with narcolepsy patients. I don't know if that's something that you've heard. But can you talk to that in terms of the success -- relative success that patients have with these legacy agents in IH relative to the success you would see in narcolepsy? So that's number one. And then secondly, this is sort of a payer question. Should we expect that patients are going to have to step through these older wakefulness agents or stimulants in order to get access to Xywav? Or does the fact that it's a brand new indication mean that you can just pull in treatment-naive patients pretty easily? How should we think about that?

Yes. Good questions. Let me start with the payer one, and then I'll turn it over to Rob in terms of sort of satisfaction with current therapies. On the payer side, we expect similar to the narcolepsy that there will be some step-through, but it's going to be pretty well documented in most of these patient charts that they have been getting these wake-promoting agents or stimulants without good effect. So I think it's going to be relatively straightforward to step them through that utilization management and something we're used to doing and something we're in the midst of doing with the Xywav launch in narcolepsy. So we don't see that as the real barrier. Maybe Rob, you could start with about the satisfaction with current therapies.

Yes. So if you look at Slide 16, the demographics, which we think represents the patients in the real world, you can see that about half the patients or more were getting alerting agents and very few getting sodium oxybate, to the earlier question. And you could see that for those patients who are getting alerting agents, they still had to have minimum severity. And so despite that, not getting significant benefit from alerting agent, so very impaired and yet still having a very good response to sodium oxybate. So very few patients seem to be getting sodium oxybate in the real world. A majority of patients seem to be getting alerting agents, but not with the intended effect. And despite the failure of alerting agents, those patients responded well in this trial to Xywav.

Our next question comes from Gary Nachman with BMO Capital Markets.

The portion of current Xyrem use for IH, could you quantify that at all? And if it's changed over time? Because I have heard mixed things from physicians in terms of access to Xyrem for IH. And then just will the current Xywav sales force be sufficient when you get the IH indication or whether you look to add to that, given the overlap and the conditions in terms of the target physician audience?

Yes. Yes, Gary, our understanding from the market research we've done is very few IH patients are currently treated and paid for by payers. Again, there's a handful of top KOLs and others who may really work their way through the payer utilization management. But I think it's a pretty good indication when we really used strict entry criteria in terms of the diagnosis for IH that only 6 of the 154 patients that came on to our Phase III study were oxybate experienced. And so I think that's probably a better reflection of what the real market is and the relatively untapped potential for naive to oxybate. In terms of sales force size, on March 1, we did expand and realigned our field forces to be fully focused on either the Xywav program initially, of course, narcolepsy, but moving into IH later this year and then a Sunosi field force, including support from our CSO. And we don't anticipate needing to add to those current field forces. The overlap is really strong, as we mentioned, with 90% of the call universe overlapping. So we may add a few targets, but it's really small in the grand scheme of things. And then we have the additional field forces we've built over the last several years for both MSLs and field reimbursement folks that we call the RAMs that, that can continue to support this effort as well.

Okay. And then just a quick follow-up. Will you look to get a pediatric IH indication at some point? It seems like this is more of a younger population. But would it make sense to go down that far, maybe also to help with exclusivity down the road?

Yes, Rob or Phil, you guys want to comment?

Yes. I'll just say we haven't made a decision around that opportunity at this time. So I don't think we have any additional information that we can add.

Our next question comes from Balaji Prasad with Barclays.

Lots of useful information on the clinical side. I want to focus on the competitive side and think about the potential for FT218 we developed for this indication. Or if I assume that this is introduced at a significantly low price next year, what is the potential for it to be used off-label to treat IH? And how do you think about it as a competitor for this particular market?

Yes. No, good question. We -- IH has got a very similar dynamic to narcolepsy, which you'll see from the uptake with Xywav, sodium really matters. It's chronic lifetime therapy, whether it's narcolepsy or IH, a significant modifiable risk factor to reduce significantly the amount of sodium that's been taken on a daily basis. Remembering at these dose levels we're talking about 1.5 grams of additional sodium above dietary intake, which everyone feels is a risk factor, particularly in these populations where there's already significant cardiovascular complications. I think from a dosing perspective, we had flexibility in this study that patients could do once-nightly or twice-nightly. And the vast majority continue to like the flexibility of the twice-nightly dosing. It allows more custom titration. You can sort of titrate between the doses. And also gives more flexibility depending on when going to bed and when having to wake up. So we don't think that's going to be a major disruptor for the product launch in IH.

If I may just ask one more question on the -- on similar lines. I don't seem to see anything on the horizon as a competing development coming up. How does that compare with your competitive intelligence? Do you see like a few years of clear IH market open for Xywav?

I mean I think similar to narcolepsy, increasing number of companies that may have sleep medicines, of which there's not as much innovation as we would hope for, will start to target IH additionally, because it's a more meaningful market opportunity than probably even we realized when we started the study as we really got to know the investigators and did the chart reviews and understand the miss and underdiagnosis. So I think there will be other agents going in there. But at the end of the day, a little bit like narcolepsy, there's the need for consolidated restorative nighttime therapy. And oxybate is ideally suited for that. And given the chronic condition with also these cardiovascular complications, the benefit of having a low sodium -- the one and only low sodium version is also a critical factor.

Our next question is a follow-up question from Jason Gerberry with Bank of America.

I guess, can you just give us a little color on the payer mix for IH? Is there a notable difference in any way regarding Medicaid exposure? I think in the past, you guys had commented that Xywav would have a new base AMP as it pertains to the Medicaid rebate caps. But if you could just confirm that, that would be great. And then just also, what's the lag factor with the August 12 PDUFA and the 4Q launch? I'm just curious, would you plan to launch immediately? Or Is there something that would drive that gap?

Sure. Yes. Good question. So on the payer mix, I don't have the payer mix in front of me, but my understanding is very similar, given onset of the disease is typically a 30 or earlier. So the mix of commercial pay is likely to be very high, similar to Xywav with 80% commercial pay in terms of book of business. And the same sort of reset with Medicare or Medicaid is in effect for this indication as well. Yes, in terms of the PDUFA date, I mean we're pleased to get the priority review. And that's -- we're planning for that earlier review. We're going to do everything we can to compress from approval to launch. But one critical factor was true when we got Xywav approved or even the pediatric indication for Xyrem. There's a certain amount of pull-through that's required post-approval for modifying the REMS. This will go under the single pharmacy and single REMS that we've got that's currently supporting our oxybate products.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Dan for any closing remarks.

Yes. All right. Thanks, Kevin. So thanks, everyone, for your interest in the Xywav idiopathic hypersomnia program. At Jazz, we're committed to leading the evolution of sleep medicines and bringing these better therapies to address these debilitating sleep disorders. We will be providing additional updates as we move toward the Xywav product launch and provide needed help to IH patients who currently have no FDA-approved treatments. So please direct any follow-up questions to our IR team. And we wish you a very good rest of your day, and please stay healthy and stay well. Thanks.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.