Jazz Pharmaceuticals plc (JAZZ) Earnings Call Transcript & Summary

Before we begin, I thought it might be a great idea to turn it over to Bruce first to kick things off, and we'll jump right into it.

Awesome, Umer. Thanks for the invitation, and I'll keep my opening remarks mercifully brief and I'm happy to jump into Q&A. So as a reminder, before I make any substantive comments, I will use some forward-looking statements today. See the risk factors in our SEC filings. I'll also refer to non-GAAP financial measures. We provide a full reconciliation to GAAP on our website. And if I refer to guidance today, it's guidance as we gave it on November 9. So we reported third quarter results earlier this month, and we were really pleased with the strong performance across all areas of our business leading to significant top line and bottom line growth. You'll all have seen that we raised the midpoint of our full year revenue guidance, which reflected guidance increases in both neuroscience revenues and oncology revenues, and this was driven by strong product performance, whether you're looking at Xywav continuing its performance in narcolepsy, where we now as of October have more Xywav than Xyrem patients in narcolepsy. Of course, we're also adding Xywav patients in our new indication, idiopathic hypersomnia. Epidiolex delivered more than 20% growth year-over-year. In oncology, we've had an outstanding launch of Rylaze. Zepzelca is established as the treatment of choice in second-line small cell lung cancer. And at the same time, we've had that top line performance we've significantly de-levered. We came in at a non-GAAP net leverage ratio of 2.9x as of the end of September. That's down 2 full turns from May '21 when we closed the GW deal. And what that should signal to all of you is we're in strong financial shape as we pay down debt, as we increase EBITDA as we have strong operating cash flow, to continue to be active in the corporate development space. You've seen us do some deals, most recently, the Zymeworks Zanidatamab deal, but expect us to continue to be busy on the corp dev side. I'm also happy to say we've been very productive on the R&D side. Hopefully, we'll get into that a little bit today. Most recently, you saw the FDA approval or Monday, Wednesday, Friday, IM dosing of Rylaze. But I will share one piece of new news on this call, which is we have enrolled the first patient in our U.S. Phase I trial of orexin agonist, JZP441 program. So that's new news as of today. Looking ahead, we're still tracking toward Vision 2025, which I think provides an excellent road map for us and for all of you as investors. We've got the capital to make strategic investments and expanding product portfolio, a really robust R&D pipeline and an increased focus on operational excellence. So looking forward to further diversification and sustainable growth and enhanced value for our investors.

Outstanding. Bruce, when you said you've de-levered. So you should -- I almost wondered if the expectation should next be that you're going to potentially re-lever from a BD perspective.

Well, we certainly could. One of the things we've demonstrated over time is the ability to lever up to do a transaction, but then quickly use our strong cash flow, our operating cash flow through 3 quarters this year was $930 million. That enables us to continue to make new investments. And if we need to lever up to buy something else, we can certainly do that. That doesn't mean we necessarily have to, but it's certainly available to us.

But Bruce, would you agree that from a BD perspective and from a timing perspective, you may not necessarily be inclined to go down that direction given some of the sort of moving parts on the oxybate competition generics, et cetera, over the course of the next 6 to 9 months, let all that clam down and then head down that direction or not necessarily?

No, I think we feel very confident with where we're going as we've expressed with Vision 2025, both in the short term and the long term, much like we borrowed to do the GW transaction last year. You could have -- Umer, we're a little farther away, but you could have made the same argument last year. I think we feel comfortable that for the right deal, we could lever up. That obviously depends on the characteristics of the target too, does it have cash flow or not.

Yes. That might be your best validation of '25 guidance, I've heard you say, by the way. So that's interesting. But let me drill down that because I was effectively asking that in an indirect way. I'm curious, I'm curious, and I'll come back to BD in a bit again. But I'm curious, one of the biggest differences between Street numbers and your numbers on 2025 is perhaps on the oxybate franchise actually. And Street's just a bit lower, not dramatically, but about $500 million lower. But the way I see it is, it's not just a function of, sort of, $2 billion franchise right now going to $1.6 billion. It's more that it's a $2 billion franchise right now, which is going to grow in the IH side. And meanwhile, there's a lot more erosion model than on narcolepsy than just the $400 million absolute drop that's suggested by the numbers. Would you generally agree with that characterization?

I'm not sure I'm close enough to the models, Umer, to know how much is IH related and how much is narcolepsy related. But we're continuing to add patients in narcolepsy with Xywav, both from former Xyrem patients, but also new to oxybate patients who are overwhelmingly being prescribed Xywav rather than Xyrem. We do expect when AG's launch, which, of course, is no later than January 1 of next year, that they will take some share from Xyrem, but we're going to get some of that revenue back in the form of royalties. And you'll remember those royalty tiers change a little bit over time, but we are going to have a significant revenue stream coming back to us through Xyrem. So if you add up Xywav, and what we think that product can be, plus any remaining Xyrem branded sales, plus our economic interest in the AGs, you get to that confidence that we've still got a $2 billion franchise as we hit 2025.

Makes sense. Excellent. And as we think about possible 505(b)(2) competition as well, how does that factor into your forecast, especially in light of some of the updates that are coming out now, which move it up by 6 months, but not dramatically perhaps?

Yes. So we've said even when we were giving '22 guidance, even when we were saying we think Xywav will be the oxybated choice in 2023, we've always said that that would be even with AG and branded competition. So we've taken that into account. If and when Avadel gets approved and launched, then there are still multiple things between here and there, despite the recent actions. Even so, we believe as the only low sodium oxybate as the only oxybate that has an indication in idiopathic hypersomnia, we're really well positioned going forward.

Got it. And you guys will be under no compulsion to share your REMS in the list? So like everybody has to do their own launches, correct?

Well, we haven't seen a final approval for Avadel. So we don't know what's in their REMS exactly. Years ago, the generics got what we call the waiver REMS that exists on paper, not in practice thus far. That includes some expectation of some interoperability with the Jazz REMS. Remember, the AGs were launching through our REMS. So we know how that works. But if and when they set up a separate REMS, we have to see what that turns out to be.

That makes sense. And then the last one would be in a scenario where FDA is comfortable with a label which does not have valproate labeling from the Avadel side, would that -- and in a scenario where you're not comfortable with that, how does that play out then? Is that something you litigate with FDA?

So again, we haven't seen a final approval or a final label from Avadel. Avadel has made various statements over time about how they'll handle drug-drug interaction in their label, but we'll have to see what's there and I'll withhold comment until we see it.

So all options on the table. Okay. Now the next sort of thing I want to walk into from here is perhaps around a bunch of new companies in the biotech pharma land -- biotech pharma, spec pharma land, these are products which have more recently gotten approved, but with real commercial potential, however, and some of them are in the neuro space. But a lot of them have these either repurposed drugs or a patent which is not super clear. So traditionally, for traditional pharmas, this is not quite been something of interest from a BD perspective. But the question has always come up. Jazz over the course of its sort of various deals over the years, if there's one area Jazz has always gotten an edge over everybody, has always been on getting a better sense on the IP side, plus pairing that with clinical. So are you -- and I think you and I both understand there are some of those companies out there right now with early into their launch cycle. Is that an opportunity set that is high on your mind? Or that's not how you think about it?

I mean, I would say what we're interested in is great products, products that really make a difference for patients suffering from serious diseases where that treatment effect is very evident. It matters to the patient, right? I'm not just talking about hitting statistical significance in a large trial, but an effect size that matters to treaters and to patients and where that effect is differentiated from other programs. If we see that, we're willing to work through the complexity to try to understand everything from IP to tricky REMS, to tricky manufacturing to whatever it is. If it's a great product, we're willing to work through some complexity. That's not to say we don't care about all those other things. We do. And we often have a point of view. And when that point of view supports doing a transaction even where other people may be nervous, we may proceed. But I don't want to make it sound like we don't care about those things because we care very deeply about those things.

Excellent. So maybe let's turn to a little more product specific and let me go beyond oxybate now and start with perhaps Epidiolex. And one of the first questions I would ask, Bruce, is -- and I realize a lot of the legacy Jazz business was very U.S.-centric, but now you're starting to enter stuff which is not just U.S.-centric. And one of the questions I've had, and this has been part of the confusion on products like Epidiolex as well as U.S. versus ex-U.S. dynamic. Would you guys, as a company, consider breaking out by geography, the revenues in future years, especially as you launch more global products?

Yes. So I'm not going to forward comment on how we'll handle reporting or guidance setting in the future. We do obviously break out at least once a year in our 10-K geographic source of revenue, so you get some sense of that. But I do want to comment that historically, Jazz has probably been overweight U.S., and that's more a statistical artifact of the fact that we didn't have rights to Xyrem outside the U.S., UCB did, right? And so we looked like we were overweight U.S. When you look at our oncology business in Defitelio and Vyxeos, we've got much more of a traditional pharma split where both regions are important. Rylaze happens to be U.S. only right now, although you know we're on file in Europe, and we hope we might have a launch as early as next year there, but we intend to grow there. Zanidatamab is largely a global deal, but for certain territories, but certainly including Europe. And so I think you're going to see us over time be a company that's a little more balanced as we are with Epidiolex that's continuing to show nice growth ex-U.S. U.S. is much bigger today, in launch sooner. But you'll see our business growth come from both the U.S. region and the ex-U.S. region.

And then the sort of growth drivers for Epidiolex itself by indication, perhaps you could speak the penetration trends in Dravet, LGS, TSC?

Yes. I'll just say, again, I mentioned growth ex-U.S., and we are excited about continuing progress in recently launched markets, our upcoming launch in France, which we expect to happen this year, our continuing launch of new indications in markets that hadn't had all 3 before. But let me be clear, our growth -- very nice growth we reported in the third quarter came significantly from our U.S. team as well. And so maybe, Kim, I can have you talk a little bit about where that growth is coming from.

Sure. And first, I'll tell you, Umer, that we are planning on updating penetration rates by indication moving forward. But I can say that we continue to see the most opportunity for growth in LGS and TSC as well as in treatment-resistant epilepsy and, as Bruce just spoke to, ex-U.S. markets. There's a number of factors that are behind that nice growth that we've been seeing. Most importantly is that we have been very pleased throughout 2022 that we continue to see nice gains in terms of the volume of interactions that we're having with health care providers. So a big difference versus a year ago, and we're still kind of coming out of COVID. And so that's really critical to a market that I think is known for being very promotionally sensitive, the AED market in general. We're really pleased to see that health care providers, as we anticipate, are telling us in market research, 60% of them say versus a year ago that they are moving Epidiolex up earlier in the treatment algorithm. And we think that's based on this dynamic we always see as prescribers get experience with it in a couple of patients and see the clinical utility in their own practice that they start to utilize it more broadly and earlier in the treatment algorithm. We've had a real emphasis this year on an analysis that we have from our data showing how effective that Epidiolex is in combination with Clobazam. We see that it can reduce seizures by 60% and specifically in Dravet and LGS and 50% in TSC. And these are numbers that they're really not used to seeing with AEDs and it does cause them to pause and really think about where else they can be utilizing the product and specifically think about those patients that they have on Clobazam who still would benefit from additional seizure reduction, which is the vast majority of patients in their product -- in their practice. So we're taking advantage of the fact that the categories, the polypharmacy category and that we have really strong data here in combination with Clobazam. So all really important things we've gained momentum on in the past year. And then we continue, as we have for some time to see very high persistence with the brand. It just seems to keep getting better. We have got excellent payer coverage. 98% of patients in the U.S. have access to Epidiolex for the 3 indications that we have in the label and in some cases beyond that, and we've got excellent reimbursement in Europe, as Bruce just mentioned.

Maybe just very briefly, Kim, while you're at it, how do you think about some of the potential competitive pressures that may or may not necessarily evolve? For example, there's a Takeda product being investigated as an add-on, et cetera. How does that factor into the treatment landscape medium term?

Yes. We really can see -- it's not that we disregard those competitive events that may or may not happen. But really, we believe that we've got a unique mechanism action, a unique profile. It is a polypharmacy landscape and we do…

That's an add-on?

As we see today with some of the existing competitors that it's usually added on top of Epidiolex. So that's not really…

It's an add-on. Okay. No, no, that makes a lot of sense. Maybe then also touching up on the other important launch ongoing, and this is sort of coming back to the oxybate side, but not so much on the generic stuff but more on the ongoing launch, IH. Can you speak to the access trends 3Q and expectations into '23? To what extent could that alone drive some of the growth?

I'd say, early this year, we were happy to be able to announce that we have achieved our goal of having similar level of access for patients with IH as with narcolepsy. And today, both of them stand with 90% of commercial lives having coverage, both in IH and narcolepsy. And we think that really bodes well for us in terms of the future. But just as importantly, to access patients and HCPs have been very pleased with that comprehensive set of customized support services that we've been offering to help pave that way for the patient to have access. And overall, we're really pleased with the growth we've seen in IH. About a year in, 1,450 patients on therapy exiting the third quarter and still just a really high level of engagement from our customers and excitement about finally having something that is clinically proven to treat idiopathic hypersomnia. So we're out there today focusing on educating health care providers because while there are a lot of patients out there already diagnosed with the condition, what health care providers have had available to them to date are off-label usage of stimulants and wake-promoting agents and really just treat the daytime symptoms, the excessive daytime sleepiness. So we're trying to educate them to think more broadly about idiopathic hypersomnia, the full array of symptoms, including sleep inertia and brain fog and so forth. And that's also helping to think about patient identification and where ultimately they should start getting experience and using Xywav. So overall, it's a new market. We're excited to build it just like we did with narcolepsy. But that being said, I think we've been saying it, it's going to take a little bit of time for us to build just as it did with narcolepsy.

Got it. And maybe a quick follow-up on that. Bruce, do you happen to recall what the median duration has been in narcolepsy?

Duration of therapy?

Right. And we can revisit that another time.

What we've typically done is we've divided that into 2 pieces. And we've said when patients that are new to oxybate are initiating therapy and titrating up, not all of them will successfully complete that titration and get to an effective dose and tolerability of some of the AEs. So we do lose patients during that initial month or 2. Typically, if patients make it to the point where they're on a stable effective dose, we have excellent long-term compliance. In some cases, now literally a couple of decades. But really don't think about it as one period of duration. Think about it as who gets to successful therapy and then they're likely to stay on it chronically.

And from that perspective, is the observation fairly similar in IH as well? I realize it's early in…

Yes. We're a little bit earlier into it. So tough to say with confidence, but we haven't seen anything yet that would point us to a different conclusion.

Got it. So some discontinuations during titration is being seen here as well?

Yes. It's pretty normal with any drug, including oxybate. I think we may be somewhat helped by the fact that the treaters who are using this are often also narcolepsy treaters and have had some experience with the drug over many years.

Eric, anything we've missed so far on the topics we've touched up on before we keep going?

Yes. I just wanted to ask real quick on Epidiolex. For the medical exception in Japan, what the time line is like for that? And then separately, [indiscernible] you're still seeing a 70-30 split between Xywav and Xyrem [indiscernible].

Yes, I don't think we updated the 70-30 split specifically, but we have continued to say that for new to oxybate patients, we're seeing the vast majority of them start on Xywav rather than Xyrem. And I'm not sure, Eric, I've heard the first part of your question.

Yes. On the Epidiolex, you're mentioning ex-U.S. growth. I was curious about Japan, when the time line for the medical exception?

Yes. So a couple of things going on Japan. We announced we are into trials in all 3 seizure types in Japan that would support registration of the agent there. The sort of legislative process is running in parallel with that is not necessarily a critical path yet. John, I don't know if you want to add anything on that?

No, not too much, Bruce. Just, there is a special committee on cannabis regulation under the Ministry of Health, Labor and Welfare, and they had proposed a revision to a section of the Cannabis Control Act. But that's still kind of in progress. We don't have a specific time line update on that.

We do think the treater community in Japan well understands the need for this agent there and they're supportive of wanting it to be available for Japanese patients.

Excellent. Maybe then turning my focus to lurbinectedin and Zepzelca. And my question is, first, perhaps, how are you thinking about the potential competition coming in small cell space? I'm thinking maybe the DLL3 BiTE from Amgen, et cetera.

John, do you want to weigh in on that?

Yes. Just -- this was on the DLL3. Yes. I mean it's -- I think we're encouraged by the fact that there's more drug development happening for patients with small cell lung cancer. I mean we see that as a positive. This is a patient population that hasn't had a lot of options. We do think that's an interesting target, but it's still quite early in its development for both Amgen and for Harpoon. And then I would note that Amgen is focused on third line as their path to approval, which is not where lurbinectedin is currently being used. And of course, we're considering a move lurbinectedin into first line in combination with atezolizumab. And so interesting, but still early days and don't see it as much of a threat at the moment.

So maybe -- and I feel like there's perhaps not confusion, but I think it's not very clear to a lot of people that from a confirmatory trial setting, you don't have 1, you have 2 potential paths and trials to get the confirmatory box checked. Perhaps if you could just remind folks listening in on sort of your maintenance trial with the PD-1 combo, but also the chemo comparison trial, just so that it's very clear to everybody.

Yes. Keep going, John.

Yes. Okay. So IMforte is the trials just referencing is the trial of lurbinectedin in combination with atezolizumab in patients with frontline extensive-stage small cell lung cancer. That's not actually designed as a confirmatory trial. We do think it's an important part of our overall development program for Zepzelca and believe that if the data are positive in that study, they can be used to amend the label to include first line, but not designed as a confirmatory trial. The confirmatory trial, which is being run by PharmaMar is referenced as LAGOON. That's a study that's in second-line small cell lung cancer. And this trial is looking at overall survival as a primary endpoint and secondary endpoint of PFS. And that study is up and running. We expect to enroll or PharmaMar expects enroll up to 705 patients at over 100 sites. And so that study, if positive, would be used to confirm the initial accelerated approval for lurbinectedin.

I see. So maybe if we could just play both of those out. Let me start with LAGOON. In a scenario where that trial perhaps, let's say, it does not work, how do you think about that in the context of label, especially if IMforte does have supportive data?

Yes. I mean it's a little bit of a tricky scenario because I think in that instance, we would expect to actually have a label for frontline small cell lung cancer.

So you do have 2 confirmatories, then.

Not exactly. I mean we confirm the initial accelerated approval, but it would support a frontline indication in small cell lung cancer.

So let me just sort of flesh some of this out further. I feel like one of the differences versus your ATLANTIS trial is that this LAGOON study has a chemo doublet, which you didn't necessarily have last time around. And as a base case, are you guys expecting both the doublet and the mono to work? Or do you think the odds are better on the doublet side? When I say work, I'm thinking outperform.

I don't think we've commented on the odds that it's going to work in either case. I would just note that in the original study, it was a lower dose in the ATLANTIS trial. And so we do think that was a contributing factor in the results that we're seeing in Atlanta and not the dose that's used in the LAGOON study.

And Umer, we think FDA is well aware of that difference as well.

And Bruce, from your perspective, do you -- would noninferiority suffice as a confirmatory on OS?

I think you're asking me a regulatory question. I'm going to defer that.

You didn't say no. Bruce did not say no. Okay. Okay.

I didn't say a lot of things in this call, Umer. So that's a big list.

And then also, I feel like the -- to me, the first-line study obviously opens a path towards an early line of use, but I think perhaps even a bigger implication could be the duration of therapy. Could you remind us where is the duration in the current real-world experience and what could we see perhaps in a first-line setting?

Yes. I mean, first of all, I'd say that's an important point you're making. And one of the things we'd love to see as a success case in first-line therapy is that patients get the benefit of not progressing to second line for a longer period of time. We think the add-on of lurbinectedin versus add-on of nothing has the potential to do that. But you're right, there's also an implication for how long people would be on our drug and that would be very much a positive. John, I don't know if you want to add anything about the specific durations that have been seen with therapies thus far.

I don't. I don't have that, Bruce, at my fingertips.

Yes. But you know, Umer, that after a relatively brief period after which patients can't tolerate any more of the platinum doublet, they often continue in first-line therapy for quite some time. I don't have the overall numbers, but I want to say, 12 months, 14 months, in some cases as compared to a much smaller number of months of therapy more typical of second-line therapy.

And the real world is tracking where Bruce, for your current…

The other thing I'll add, Umer, on that. And the other thing is, of course, not all first-line patients move to second line. You move -- you lose the patient. You choose not to go on therapy. So it's a bigger number of patients and potentially for a longer period of time. Kim, I don't know if we have any data on...

3 to 4 months, does that sound about right?

I said I don't think we've shared it yet publicly.

Okay. But I'm not too far off if I think, sub 5 months?

I think it's around there.

That's pretty reasonable.

Yes. Makes sense. So I mean the way I see it is, and there's a fair amount of literature on it, for example, IMpower133 trial from Roche, where IO chemo just works and it really does work. And -- but the question I had in my head was some of those prior trials that we've seen have been sort of IO chemo versus chemo whereas the trial you're running is IO chemo versus IO and which is really just trying to go back to the role of the chemo is active or not and we know chemo has been active. So how should we think about that?

I'm not sure that's quite right, Umer. So its IO plus chemo as people currently do it, but IO plus chemo and then switching to lurbinectedin when you can no longer continue with the other chemo. So in both arms, you've got the chemo. It's different till you add on lurbinectedin.

Its lurbinectedin and maintenance.

Correct. Exactly.

I see. I see. And you may not necessarily get maintenance on chemo in the other arm. Okay. Got it. Okay. That makes a lot more sense. That makes a lot more sense. Excellent. Okay. Super helpful. Super helpful. And you've never commented on stat hierarchy in that trial in terms of PFS versus OS.

John, do you want to take that?

Yes. They're both considered primary endpoint. We'll get an earlier look at PFS and interim OS data at that time. We do think PFS could serve as the basis for regulatory submission if the magnitude of effect is big enough and it's in line with what the interim OS data looks like. So that's how we'll look at it.

Eric, did I miss anything here that you wanted to touch up on before we move on?

Not on the topic, no.

So maybe let's turn to the orexin program then because I feel like this is going to be a very big focus as we turn the cards into next year. And let me perhaps start by asking, can you speak to what was -- when you guys did the deal, there was some Japanese data already being generated. And what were the things that had not been done from an IND perspective that happened sort of on Jazz's clock?

Joshua, do you want to jump in on orexin agonist program?

Yes. I'm very happy to elaborate after Bruce's update earlier on this call that we successfully enrolled our first patient in the Jazz led U.S. Phase I study. So to your point, Umer, that does imply that our IND was successfully filed and we received feedback from FDA that the study may proceed. So the IND work is complete. We have a comprehensive Phase I program planned, and we'll provide additional updates once we have additional data, both from the first-in-human study that Sumitomo has led in Japan and then our own Jazz led study in the United States.

And perhaps sort of, if you could just speak to the missing pieces that perhaps Sumitomo had not done and why their Japanese versus U.S. timing was off?

There are -- IND enabling studies were mostly underway at the time of the deal. So a lot of the work needed to be completed and needed to be packaged into study reports and prepared for filing. So that's, I think, the answer to your question.

Okay. And Josh, can you speak to the...

And I'll go back, Umer, in terms of framing and say this isn't so much a lack of progress on Sumitomo's part. This was really trying to put the strengths of Sumitomo's work and the Jazz partnership together and figure out if together we could accelerate this program and make it even more successful. And I think if you ask Sumitomo why they partnered and why they chose Jazz, a lot of it was their view that we'd be a good partner on this asset and be able to add value in strategy and execution, and I'm really proud of our team for accelerating a time line the way they have to be in humans in the U.S. just soon after signing this deal.

Perhaps since -- just going down this a little more, Josh, can you speak to the scaffold differences versus Takeda's 994 and 861 molecule and yours?

I mean, there are minor differences. I think perhaps underlying your question is that we believe the understanding of the hepatotoxicity was characterized well enough on a medicinal chemistry basis that we've avoided that potential liability.

But I thought the 861 and 994 weren't too similar. So when you say minor difference, its minor differences versus which one?

We haven't discussed the details of other programs outside of Jazz, but main enthusiasm behind our molecule comes from the nonclinical package that we have on JZP441. So we have tremendous selectivity, potency and one of the key liabilities we believe is mitigated with our molecule around hepatotoxicity.

Have you guys been able to generate 994 and 861 internally and run that in some of these preclinical models versus your molecule?

I'm not going to comment on that.

And then can you speak to the hepatic first fast metabolism on yours?

So the molecule is metabolized by the hepatic 3A4 enzyme. And we have, obviously, very early, early human data and a lot more to learn. And so we'll provide an update once we have a better sense of unblinded data from both the first in human as well as the Jazz led Phase I study that we announced today.

Right. And Josh, to what extent is your confidence driven by -- because you mentioned main enthusiasm on preclinical. And in my mind, I was thinking maybe there's something out of the emerging data in the Japanese patients, which is also informing some of that confidence. Could you speak to that?

The enthusiasm relies on the mechanism of action, which has been well established actually for years in the narcolepsy space. To develop this molecule for both narcolepsy and idiopathic hypersomnia is a great opportunity. I think it's fair to say there's clinical validation of this mechanism from other programs, and we've got tremendous confidence in our specific molecule.

What's the patient exposure to date in Japan?

So this study is ongoing, and we expect that, that will read out as planned in the first quarter of '23.

Right. And maybe if you could just give us a sense of the number of patients and the exposure?

I don't know that that has been disclosed and probably best to hold off on further discussion of the trial while it's ongoing.

Okay. But you guys are unblinded to the data, correct? On Phase 1?

Correct.

And Bruce, how much of that did you see at the time of the deal?

I mean, more has been developed, obviously, since we signed the collaboration, but we did have access to some early deal when we signed the deal.

And would you argue your confidence remain the same or it got higher since the deal?

I would say higher, but I would go back to Joshua's comments. We're still early. I don't want to...

Fair enough. No, of course.

But we like what we're seeing, but it's still early.

Okay. High for a Phase I asset. Excellent. So in the study you guys just initiated, is -- this is in healthies or this is narcolepsy patients?

Healthies.

And you expect to be in narcolepsy patients presumably at some point first half?

We didn't say that.

Well, you know what, we'll pause it right there. I want to be very respectful of your time. But we'll certainly be tracking this with a lot more detail in the coming weeks. So stay tuned.

Yes. No, we're excited. This was a big milestone that we announced today. And obviously, this was underway when we were asked questions earlier about status, and we just didn't want to say it until we actually had a patient in, but great job by the team.

Sounds great. Looking forward to being in touch.

Yes. Thanks so much.

Take care, guys.

Okay. Bye.