Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to the Zolgensma MDA Data Investor Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] With that, I would like to hand over to Mr. Samir Shah, Global Head of Investor Relations. Please go ahead, sir.

Thank you very much for -- to everybody for joining us today. And our sincere apologies for the technical difficulties in getting through and registering for the call. We wanted to provide you with an update on several recent important AveXis-related data and regulatory milestones. Before we start, I'll read the safe harbor statement. The information presented in this conference call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Please refer to the company's press releases and Form 20-F on file with the U.S. Securities and Exchange Commission for a description of some of these factors. Joining us today on the call are Vas Narasimhan, CEO of Novartis; Dave Lennon, President of AveXis; and Olga Santiago, Chief Medical Officer of AveXis. With that, I will turn the call over to Vas, and we'll be on Slide 4.

Thank you, Samir, and thanks, everyone, for joining today's conference call. Again, our apologies for some of the technical difficulties. Before handing it over to Dave and Olga to take us through the content related to AveXis, I wanted to provide a brief update on Novartis' situation with respect to COVID-19. Starting with our existing operations. Our existing operations are stable and running well. We are supporting all of our associates through a range of programs, ranging from additional days off for those who have to work in the office and potentially have to care for ill family members at home, enhanced child care, enhanced learning programs and a range of other support programs to ensure all of our 108,000 associates are well cared for as well as third parties that we work with. So we're trying to do all of the right things to support our people. Our supply chains are running well with no significant disruption in our supply chain. With respect to clinical trials, we, of course, are seeing slowdowns in some elements of new enrollments in ongoing clinical studies and start-up with new studies, but on the whole, studies that we believe are running stably and we're able to manage through the situation. And we'll continue to monitor that and provide you more updates as the year unfolds. And then lastly, our deployment of digital technologies across the company is enabling us to manage our R&D portfolio in real time but as well enabling us to engage in marketing and sales activities with all of our key stakeholders, physicians and other stakeholders relatively seamlessly. So I think on that front as well, things are stable and going well. I wanted to also say a word on some of the response efforts that Novartis is undertaking, and they really come in 4 main areas. The first is evaluating existing medicines within the Novartis portfolio. Hydroxychloroquine, a generic malaria drug, is a medicine that we've committed to donating 130 million doses to governments and programs around the world, and we're working to scale up that production further. Yesterday, the HHS announced that it had received emergency use authorization for hydroxychloroquine for the use in hospitalized patients in clinical trials in the United States and also confirmed receiving a 30 million-dose donation from Novartis. We also have moved forward in submitting a randomized controlled trial protocol to FDA for hydroxychloroquine to evaluate its use in hospitalized patients, along with supporting a range of investigator-initiated trials for hydroxychloroquine. We're also actively studying Ilaris, our anti-IL-1 inhibitor for the use in hospitalized patients. We're in the process of submitting protocols to the FDA for randomized control studies of Ilaris in hospitalized patients to manage the ARDS and some of the more severe complications of COVID-19. We've seen encouraging data from Italy and a few other countries that indicate that Ilaris might play a role, but of course, appropriate studies are required. Similarly, Jakavi, our JAK2 inhibitor -- our JAK inhibitor that we have partnered with Incyte, we are in the process of evaluating larger-scale studies based on initial findings and signals that perhaps Jakavi could play a role. And then lastly, there's a number of other medicines in our portfolio that are being looked at. And we'll have to see how the data plays out. The second big area is in novel drug discovery efforts where we're working through a range of academic collaborations, the Gates COVID Accelerator where we're screening molecules from our library. We're also looking at novel drug discovery efforts with some of our academic partners and also working with the IMI in Europe, again, to identify novel compounds with antiviral properties that could help in the ongoing pandemic. We have a $20 million COVID response fund that we're using to support local communities and have given grants now all around the world, ranging from Africa and Asia to Europe and the United States. And then lastly, we're code sharing with the Bill & Melinda Gates Foundation and industry consortium to really bring together and look for opportunities for the industry to work together in areas ranging from R&D, manufacturing as well as relevant diagnostics and vaccine. So a range of efforts, we're trying to do our part. But today, our goal is to provide you an update on AveXis and our efforts with Zolgensma. And with that, I'll hand it over to Dave Lennon and then Olga to walk you through those details. So Dave?

Well, thank you, Vas. First, I'd like to echo Vas' sentiments regarding COVID-19. In particular, I'd like to recognize that for SMA community, we remain committed to making sure that Zolgensma is available. And I'd like to really thank all of our associates who are working and continue to work diligently on that commitment and continue to make Zolgensma available to patients who are in urgent medical need. I'd also like to specifically thank the health care workers and others who care for those with SMA patients and are on the front line. We have to remember that SMA patients are particularly susceptible to respiratory diseases. And on behalf of AveXis, I want to extend my sincere gratitude to those who are working to keep the patient community safe. Now going back, what I'd like to do is turn our focus on to SMA and start off briefly by grounding us in the disease and our gene therapy. Let's remember that SMA is caused by a lack of the functional SMN1 gene. And the severity of SMA varies across the spectrum and corresponding to the number of SMN2 backup genes and the age of onset. For patients who are diagnosed before symptoms appear, the degeneration and loss of motor neurons will start shortly before birth and escalate quickly. Often these Type 1 patients have 1 or 2 copies of the SMN gene. And when left untreated, SMA Type 1 leads to permanent ventilation or death in most patients by the age of 2. This is actually the most common form of SMA, and approximately 60% of patients born with SMA will have Type 1. Now the reality is, though, that in a prevalent population, we actually have a much higher incidence or a higher prevalence of SMA Type 2. And these are folks who have 3 copies of the SMN2 gene, and 50% of these type of patients will also have Type 3. The onset of symptoms in Type 2 is between 18 -- 6 and 18 months and is followed by a steady decline in motor function with more than 30% of untreated patients succumbing to disease by the age of 25. And I just highlight it because it means that there are obviously important, urgent unmet medical needs in Type 1, which is an important component of the disease. But we also have to recognize there are significant unmet needs in the Type 2 population, including inability to walk and increased mortality over time. So moving to Slide 5. SMA is a disease with one root cause, and that's a lack of the functional SMN1 gene. Zolgensma provides a functional copy of that gene to halt disease progression through sustained SMN protein expression. The human transgene is delivered via the adeno-associated vector, AAV9, which can cross the blood-brain barrier to target motor neurons without modifying the genome of our patients. Let's remember, this is administered as a single, onetime dose designed to provide long-term benefit and avoid long-term chronic therapy. Thereby, gene therapy can reduce the burden for patients, their caregivers and health care systems. With that, moving on to the next slide, Slide 6. I'd like to take you through several important milestones that we've achieved over the last couple of weeks. So on March 19, the Japan Ministry of Health, Labour and Welfare approved Zolgensma for the treatment of SMA in patients under the age of 2, including those who are presymptomatic at diagnosis. In Japan, the target population will be those patients with SMA and up to 3 copies of the SMN2 gene regardless of the symptom onset. We anticipate that approximately 15 to 20 patients in Japan will be eligible for treatment each year. Reimbursement discussions with the MHLW are expected to be completed by the middle of the year. And pending agreement on the reimbursement, Zolgensma will be available in Japan at that time. This approval in Japan come under the Sakigake designation and marks our first approval outside of the U.S. for Zolgensma. And it reflects the transformational impact that therapy has on children and families affected with SMA. So moving on to Slide 7. I'd like to highlight that last Friday, we announced that CHMP had adopted a positive opinion recommending conditional marketing authorization for Zolgensma. The European Commission reviews the recommendation and usually delivers its final decision approximately 2 months after the positive opinion. This decision will be applicable to all 27 European Union member states as well as Iceland, Norway, Liechtenstein and, importantly, the United Kingdom. Now what I'd like to do is just highlight some of the aspects of the label that we anticipate will be approved in Europe. What we've seen is that the CHMP has recommended an indication for the treatment of patients with 5q SMA with a bi-allelic mutation in the SMN1 gene and a clinical diagnosis of SMA Type 1 or for patients with 5q SMA with a bi-allelic mutation in the SMN1 gene and up to 3 copies of the SMN2 gene. This indication is a result of a comprehensive body of evidence that's demonstrated significant and clinically meaningful therapeutic benefit in both presymptomatic and symptomatic SMA patients, including prolonged event-free survival and achievement of motor milestones unseen in the natural history of the disease and to date that have been sustained 5 years post dosing. More simply, what this effectively means is the indication covers any patient with clinically diagnosed Type 1 SMA regardless of SMN2 copy number. And it also covers any patient genetically diagnosed with SMA up to 3 copies of the SMN2 gene, regardless of their clinical diagnosis. So practically, this provides access for all Type 1 patients and most of the Type 2 population patients identified either presymptomatically or symptomatically. This indication does not have a weight or age restriction, but as noted in the CHMP press release, the intent of the approval is for babies and young children with SMA. To enable that coverage, we will be introducing a product presentation at the time of launch that allows for treatment of patients weighing up to 21 kilograms. And we'll look at the next slide for the implications for the treatable population in Europe. So on Slide 8, we review the numbers. SMA affects approximately 550 to 600 infants in the EU each year. And there are approximately 11,000 to 12,000 patients living with the disease across the European Union. According to a natural history study of SMA, almost all patients under the age of 5 will be under 21 kilograms. And some patients at 6, 7 or 8 will be weighing below 21 kilograms. So for those living with SMA, we expect there approximately 15% will be eligible for therapy or 1,700 to 2,000 patients under the age 5. So Slide 9 reflects the data that was incorporated into the review of our label and a positive opinion. It's been a robust clinical trial program that's continued to grow over time, including the Phase I START program, the START long-term follow-up, our Phase III STR1VE-US and our Phase III SPR1NT study. Not shown here, we're also running a STR1VE-EU trial that will fulfill part of the post-approval commitment to secure full approval at a later date. All of these studies were recently updated with new data and that we reported at NDA. So just focusing on a few of these. We completed the STR1VE-US study and continue to confirm what we know about Zolgensma, which is that SMA Type 1 patients experience rapid, sustained and clinically meaningful improvements in motor function following a onetime infusion. In addition to meeting both co-primary end points, 9 of the 22 patients in the completed pivotal U.S. study demonstrated the ability to thrive, which is a remarkable achievement. With the goal of treatment of SMA Type 1 moving beyond survival and motor milestone achievements, this trial is the first to incorporate an ability-to-thrive metric, which is a stringent composite end point, inclusive of functions like swallowing, feeding and age-appropriate weight maintenance. We also reported new data on the long-term START follow-up, which continues to demonstrate durability of Zolgensma with achievement of maintenance and milestones sustained to patients now up to 5 years post dosing and beyond 5 years of age. In addition, we presented cumulative safety data from 335 patients across all clinical trial investigations of IV Zolgensma. We think this is an important milestone in now having a robust safety data set. This patient population included our clinical trials but also the U.S. managed access program, our commercial patients and those who are enrolled in RESTORE global registry. And it showed the profile of Zolgensma in these patients was consistent with previously observed safety data, reinforcing that on-marketing experience is highly consistent with what we experienced in clinical trials. Lastly, the interim data from the ongoing SPR1NT study continues to show that babies with SMA treated with Zolgensma soon after birth achieved age-appropriate motor milestones. Patients experienced a rapid onset of effect demonstrated by swift improvement in motor function. These patients do not require feeding support. Most remained within the normal weight range, and patients also remained free from ventilatory support of any kind. For those in the 3-copy cohort, patients largely destined to develop SMA Type 2, all patients who are old enough achieved age-appropriate independent standing and walking within the WHO development window for usual childhood development. Moving on to Slide 10. We look respectively at the age-appropriate milestone achievements, particularly recall in the -- that we had 2 cohorts for the SPR1NT trial, one with 2 copies of SMN and one with 3 copies. This is showing the patients with 2 copies of SMN2. As you see, 8 patients so far were able to sit independently for at least 30 seconds, with 7 of those achieving independent sitting within the range of normal development. To put this in context, the importance of independent sitting, and this allows for the potential development and integration of cognitive sensory motor skills that are important for functional independence and social development. Additionally, so far, we were able to see that 4 patients have been able to walk independently. Patients who have not achieved these milestones yet are still within the normal range of the development window for these milestones, and we'll give further updates in the future. Turning to Slide 11. Upon anticipated approval in Europe, Zolgensma as a onetime therapy is expected to provide long-term benefits and potentially advances the way SMA is treated. We estimate that the current health care costs per child for SMA range between EUR 2.5 million and EUR 4 million within the first 10 years of life alone. In extreme cases, the cost can far exceed this amount. And therefore, we see Zolgensma having potential meaningful impact of relieving costs in the health care system. In many cases, in Europe, the current costs of care, includes chronic treatment, are already being covered and reimbursed by the health care systems. The introduction of a onetime administered gene therapy like Zolgensma requires us reenvisioning how we define the value of treatment as well as how health care systems manage, diagnose, treat, care and assess associated cost for patients with ultra-rare condition. And we believe Zolgensma could reduce this burden on these health care systems by replacing chronic treatments with a onetime treatment option. On Slide 12, I'd like to describe our Day One access program, which is our commitment to both payers and the community. Given the urgency to treat SMA and the novel nature of gene therapy, we need to be equally innovative in advancing access customized for the European environment. That's why in Europe, we're offering government and reimbursement bodies what we're calling this Day One access program that will enable rapid access to Zolgensma upon European Commission approval. The program is designed to work within the existing pricing and reimbursement frameworks that are available across the continent and yet recognize the novel nature of onetime gene therapy for a devastating and progressive disease. The Day One access program offers ministries of health and other reimbursement bodies in countries without preexisting early access pathways a variety of flexible options that can be implemented immediately upon approval. This program is designed to ensure that the costs of patients treated before national pricing and reimbursement agreements are in place, are aligned to value-based prices negotiated following clinical and economic assessments. The program is meant to ensure the continued integrity of local pricing and reimbursement framework. We've outlined on the slide the options that can be customized for each country, including retroactive rebates, deferred payments and installment options, outcomes-based agreements as well as access to our global SMA registry for data collection. AveXis is already in advanced discussions with multiple countries in Europe to agree on terms of the program. We hope that this commitment to transparency and flexibility in our product launch will allow governments to move quickly to allow access to Zolgensma for their families in urgent need of therapy. So we're very excited about the potential launch in Europe over the coming months. We're partnering flexibly and being agile to make sure that we can address the urgent need for access to this therapy for patients. And with that said, I'd like to now switch gears to our intrathecal program delivered by AVXS-101 and a summary on our STRONG trial data. So turning to Slide 14. We'd first like to highlight the unmet need that still exists within SMA -- older SMA patients with later onset forms and despite currently available SMN2-modifying therapies. Our approach -- we believe that these approaches have limitations in terms of both their efficiency and their administration, including repeat chronic use throughout a patient's lifetime, the challenge that some patients do not achieve clinically meaningful response, the risk and compliance challenges with administration and the unknown effects of long-term chronic use of SMN2-modifying therapies. As a reminder, Slide 15 shows the STRONG trial was designed and -- or how the STRONG trial was designed and the evaluation of this onetime intrathecal administration of AVXS-101 in SMA Type 2 patients who have 3 copies of SMN Type 2 gene. These patients were able to sit but unable to stand or walk at the time of entry of the study. The patients were divided into 2 groups based on the age at the time of treatment. And those who are at least 6 months to less than 2 years of age were one cohort, and those who are more than 2 years but less than 5 years of age were the second. At MDA, we reported the final data for patients treated in both the dose A and dose B cohorts of the study. Today, we want to focus our attention on the older group who received dose B. The co-primary end point for this group was change in Hammersmith Functional Motor Scale Expanded, and that change was from baseline. So on Slide 17, I just want to highlight and note the use of the Hammersmith scale -- sorry.

16.

Slide 16. Specifically designed for SMA patients greater than 2 years, HFMSE is widely recognized by global regulatory agencies due to the ability to monitor change in a broad spectrum, from weaker to stronger patients. When you look across these scales, lower scores generally denote weaker and more severe patients with less motor function and greater dependency on compensatory physical assistance, while higher scores indicate better functioning patients. As a comparison to the MFM32, a scale sometimes used in other studies, includes more upper limb measurements and, therefore, is highly sensitive and may detect small changes in very weak patients. For example, a 2-point increase may mean an individual who's previously unable to do so now is able to pick up or hold 10 coins in one hand within a specified amount of time. Whereas in Hammersmith, an example of a greater than 1-point gain could be an individual who's unable to sit up in a normal school chair or on the toilet at baseline and can now sit using one-hand support. So with that background, I'd now like to turn over to Olga Santiago who will walk you through our STRONG data and the results we've seen to date. Olga?

Thank you, Dave. Now let's turn our attention to the STRONG data on Slide 17 where we have shown you the results for the primary efficacy end point in the older group where Hammersmith can be assessed. Patients between 2 and 5 years of age at the time of dosing who received dose B met the primary end point with a mean increase from baseline of 6 points in the Hammersmith scale. This is shown in the graph on the left with the green dot on the right. This is twice the clinically meaningful threshold established in previous SMA studies and is truly remarkable for this patient population as untreated Type 2 patients generally do not achieve a Hammersmith increase of more than 2 months over time. When you look at the difference of this change versus the natural history PNCR database, shown with the blue on the left, you will see that the results are statistically significant and then most importantly, clinically meaningful. On Slide 18, you will see the change in Hammersmith over time, shown on the left. And here, the improvements are rapid and importantly sustained. And on the right, you see a clinically meaningful difference of 3 points or greater improvement in the Hammersmith scale was seen in nearly all patients. 92% of patients demonstrating that we see a consistent response across the tested population with a dramatic difference, as I previously stated, versus the natural history control group where patients are not expected to see more than a 2-point increase in the Hammersmith scale over time. Turning to Slide 19. You see increases observed in the Hammersmith. What do they mean? They will reflect the preservation of motor neurons connected to key muscle groups impacted by SMA in this Type 2 population, allowing for motor developments such as trunk control when rolling and sitting and being able to transition from lying to sitting. A 6-point improvement in Hammersmith reflects the gain of 3 new skills completely or 6 new skills partially. In contrast, untreated SMA Type 2 patients typically experience a steady decline in motor function over time. In nonambulatory patients, improved strength and consolidation of critical functions allow for better maneuverability, transitioning and integrating proximal and distal functions that enable more advanced use of their well-developed fine motor skills. These improvements were seen even in patients who were very weak at baseline. As you can see on Slide 20, gains were seen across a wide variety of skills and all 5 domains of motor function. These include sitting, rolling, transitioning to a crawl, transitioning to kneeling and standing or stepping. The stars on this slide denote patients who went from a score of 0 to 2 during the study period, indicating the achievement of a full skill. And it's important to note that 2 patients stood with assistance, including one who went on to walk. In summary, on Slide 21, the STRONG data reinforced the best-in-class category potential of a onetime treatment with AVXS-101 delivered intrathecally. These data show efficacy was a mean 6-point increase in Hammersmith, twice the clinically meaningful threshold and using the most validated scale in this population. And I think most importantly, this response was seen consistently across the population. These patients reflect and the results overall reflect the safety profile remains consistent to what was previously shown with IV administration of AVXS-101. So based on this information, we look forward to sharing the data with regulators to further discuss our path towards registration for AVXS-101 delivered intrathecally for older patients. With that, I'll end my overall brief summary and turn it back over to Vas.

Great. Thank you, Olga. So if we move to Slide 22. I just wanted to provide an update on the next steps for the AVXS-101 IT program. On March 27, we received feedback from the FDA regarding the IT preclinical -- clinical -- partial clinical hold where they requested additional preclinical data to release the partial clinical. Now it's important to note this additional preclinical data that was requested, it's expected to be generated in studies that we either already have planned or are initiating. We plan to engage now with the FDA given the strength of the STRONG data during Q2 to clarify the scope of the data required to release the hold. But importantly, we also plan to approach now the FDA for a pre-BLA meeting based on the recently presented STRONG data, which you heard about on today's call, which we believe clearly confirms the positive benefit/risk of the IT formulation. So with respect to BLA submission timing of the IT -- AVXS-101 IT in the United States, it will depend on FDA feedback, but it will continue to be in a range of -- in the second half of 2020. If they require additional -- the full readouts from some of the preclinical data, it would go into 2021. But we will hope to have those meetings in the coming quarter and be able to provide all of you a clearer update in the months to come. Now moving to Slide 23, a few other milestones to highlight. The Form 483 discussions are complete. FDA completed their review of our response. It was classified as Voluntary Action Indicated with no further enforcement action necessary. So that closes out from a regulatory standpoint the 483 from last year. And then moving on for -- looking forward for Zolgensma, we expect a European Commission decision by June of 2020, reimbursement in Japan in the first half of 2020. And we also expect a range of decisions as well in 2020 or early 2021 in a range of countries, as you can see listed here. Importantly, major markets such as Brazil would be included in those actions. So we hope you appreciate that update, both on -- initially on our COVID-19 response efforts, but then importantly, on the overall profile that we're building with Zolgensma; the approvals that we've achieved now in Europe with a broad label; and in Japan, the continuing strong clinical profile now demonstrated across a range of clinical studies with well over 300 patients now treated successfully and safely; as well as with the update on the STRONG IT data, which we believe presents a compelling benefit/risk profile to hopefully file soon in the United States. So with that, I'll open the line for questions. So operator?

[Operator Instructions] And your first question is from Graham Parry from Bank of America.

So firstly, on the preclinical data, the FDA is now requesting for the clinical hold on the intrathecal. Can you give any kind of feel for when you expect to have those studies completed? And it sounds like they're not all even initiated at this point. And it sounds as if those are going to not be available for an initial BLA file. So the second question is, can you actually have a pre-BLA meeting and file the low and mid-dose when you're still on clinical hold on the high dose and then potentially just file those high dose data later? Because the low, mid-dose data clearly looks strong enough for a file on its own right. So would you even ever get around to filing the high dose? And then a question on the -- what you expect to see in terms of the marketing of that intrathecal when you get it into the market. It looks as if that's going to be quite some time now behind Roche's risdiplam in that market, which has got a fairly easy route to administration, possibly some price benefits and a wider age range. So coming into the market after that, perhaps just talk commercially how you think about positioning intrathecal Zolgensma against risdiplam.

Yes. Thank you, Graham. So I'll take the first question. With respect to the additional data FDA requested, it's important to know, we initiated preclinical nonhuman primate toxicology studies already towards the end of last year and the beginning of this year to support a BLA package. And so we believe, depending on what the FDA ultimately requires, that we would be in a position that they accept the benefit/risk profile and the preclinical package that we believe would be adequate and we'd be able to file in Q3 of this year. If they would want additional longer-term follow-up on those nonhuman primates, that could obviously take longer. So really, the question there is how much data does the FDA want from our nonhuman primate studies in the context of the very strong clinical data that you've just seen for STRONG. We believe there's a compelling benefit/risk, but obviously, we need to have that discussion with the FDA, and that's what determines the ultimate time lines for filing. Now with respect to the low, mid, high dose, our view that the mid-dose is the dose that would be appropriate to go forward with in the limited amount of data we see. In the high dose, we don't see an additional clinical benefit from the high dose. It is worthy of note that we don't see any safety signals across the low, mid or high dose with respect to any sensory deficiencies. And that includes the 3 patients that were treated in the high-dose cohort as well. And then in terms of the commercial side of things, I'll hand it over to Dave. Dave?

Thanks, Vas. So I think it's first important to note that risdiplam hasn't been approved yet. We don't know what their indication is or what their label exactly looks like. So it's hard to comment in more than generalities. What I would look at and focus on is the very much the strength of our data and the responses that you're seeing in patients. So we're seeing very high response rates in this 2 to 5 population, and you can look across other 2 to 5 populations to see what other responses look like. We'd be very interested to see what that kind of data does look like for risdiplam. But the strength of the response in the 6 points of achievement that we see over the baseline and natural history and I think in addition, the completeness of the response in the population that we've studied so far. So we're seeing a 92% response rate in those patients. So overall, you're seeing transformational benefit, and you're potentially seeing a very highly reliable response in this population. We think those will be very important considerations because then you put on top of that a onetime therapy. And if you imagine now the administration challenges of chronic therapy, take, for example, in a situation like COVID-19, where you're trying to bring patients back to the hospital to get treated, but you're trying to manage the administration of product on a consistent basis, we alleviate all of those problems that occur. And obviously, the administration becomes a lot easier from that perspective. So we really think, regardless of whether it's an oral route or an IP route administration, the overall demonstrated strength of our data, the reliability of the response and then ultimately, the ease of administration will be winning factors for the marketplace.

And it's important just to always remember, with the Hammersmith, we've demonstrated the power of Zolgensma with the gold standard test for these patients. And I think in that 2- to 6-year-old group that David and Olga have nicely highlighted, we've really demonstrated compelling efficacy with the gold standard approach to evaluating these medicines in May. So thanks for the question, Graham.

Your next question is from the line of Keyur Parekh of Goldman Sachs.

Two, please, if I can, broad picture ones. First, on Europe. On Slide 8, you give us a prevalent population. It would be great to know if that is -- or how -- what proportion of that follows up to 6 years of age? Or is that kind of the population up to 6 years of age? And then more broadly, as you think about kind of the Day One access programs that you're talking about, how do you think that will be taken up by the various kind of government agencies across Europe? I mean I know in the U.S., you've seen pretty much kind of cash pay or immediate pay for 90% of your patients. So just anything on what you expect that uptake to be across Europe would be useful. Secondly, as we think about kind of Japan and Europe and from a pricing perspective, how much of a discount should we think of? Or what is the range we should think of relative to the U.S. pricing? And then lastly, can you confirm if you are seeing any impact kind of towards in the recent weeks as it relates to use of Zolgensma kind of in the U.S. as it relates to kind of hospital facilities or any nervousness for babies or their parents to come into a hospital setting for getting their infusion?

Thank you, Keyur. So Dave, on the Europe prevalence as well as Day One access?

Yes. So the numbers we're showing you for Europe are the total population, and then we gave you some breakdowns of how to potentially translate 21 kilograms into an age range, which is obviously a very broad age range depending on the progress of those children. We anticipate that somewhere around 15% or 20% up -- maybe up to 20% of patients could be eligible from that population for therapy. So that gives you an estimate around the population range. In terms of the uptake of the Day One access programs, we've had a lot -- I mean there's tremendous interest in Europe across the patient community, physician community and the payers. There's been multiple engagements around Zolgensma, and it's been very high profile throughout this review period. We do see a lot of interest from different ministries of health in trying to find ways to provide access to their patients. This is very challenging because it does create a situation where many families are urgently requesting access to the medication, and many of traditional pricing and reimbursement mechanisms that exist in Europe can take a long time to complete. And that's why we've been -- launched this Day One access program to provide that flexibility and really provide the financial security to the markets to make sure that they feel they're not put at risk, that we take on the risk for the ultimate price that is agreed to in those markets. And then when you look to your question about the pricing overall, what I would say is that we will obviously comment on pricing when we have approval or the pricing and reimbursement decisions in Japan, which will come in the next 2 months. But I would then just highlight that we really are trying to approach this from a partnership model that's built on flexibility for implementation of this unique therapy. And then I think you had a question on what we've seen over the recent weeks. This is a highly -- population that's in high and urgent need of care. There is obviously a lot of concern in the community about COVID-19 given the susceptibility of SMA patients to respiratory disease and that being a highly complicating factor for their health. We -- so we anticipate that with the burden of health care systems occurring in certain parts of the country or in certain parts of the world that there will be challenges to getting patients into the hospital. But at the same time, this is very much an urgent medical need, and we do see consistent demand for the product continuing in recent weeks.

Thanks, Dave. Thank you, Keyur.

Your next question is from the line of Peter Welford of Jefferies.

Just 2, please, on the intrathecal formulation. Firstly, just curious, when you get intrathecal approval, is the targeted label here for patients above the age of 2? Or given, obviously, the lower doses that you can administer with intrathecal, is there any reason why the FDA would not grant a label that also includes and encompasses the current Zolgensma IV label? And I guess, if not, why not? What could be the potential differentiation between those 2 formulations from the point of view of the birth cohort and the younger patients? And then secondly, just regards to the high dose, just following up again on those 3 patients, do you foresee a need at all to get additional data from the high-dose cohort to be able to complete FDA filing? Or at this point, it sounds as though you're confident that it's the preclinical data that very much now would be the gateway likely for FDA filing and this additional follow-up data for the high-dose cohort isn't likely to be required? Would that be a sort of fair assumption?

So Dave, on the IT formulation age groups?

Yes. So I think we've -- the patients who need access, particularly in the U.S., to this therapy are those who are over 2, and so we've really focused on making sure that we are satisfying the unmet need that exists there and bringing this formulation forward for that population. We still think that the IV formulation is very appropriate obviously because it's available, the only available therapy on the market right now, and it's highly effective. But I think that, that will continue to be the formulation that we would propose for newborns and early patients who are diagnosed with SMA. But at the end of the day, this will be a discussion we have with the agency, and then we'll see what their feedback and their view is on these 2 formulations and where they might fit.

Yes. And as you probably -- I was just going to add one point there. I think as well, there is also that -- remains the possibility that our IV formulation as in Europe, which is now, of course, approved without an upper-ended age gap, could also be a possibility to extend into older age groups as well in the U.S. So I think we just need to look at all the various options with the agency and see what the most expeditious path forward is to get kids above 2 years of age able to be treated with Zolgensma. On the high-dosed age?

Yes. So the -- currently, we plan to -- since we don't see a safety signal, we do -- or any increase in safety risks with the high dose, we do continue to plan to expand that once the clinical hold is lifted. But that does not stop us from moving forward with potential pre-BLA meeting and ultimately, hopefully a file. And you're right, the preclinical data seems to be the rate limiter now in that discussion, and we'll move forward to have that as we go. But those things, I would say, are, in many ways, delinked. We continue to want to study the high dose to make sure that there is an additional benefit. But as Vas noted, we haven't seen any indication of real efficacy differences between the doses so far.

Your next question is from the line of Richard Vosser of JPMorgan.

A couple, please. Firstly, on capacity of the IV formulation for Zolgensma. I think previously, we were looking at maybe 1,000 doses. I can't quite remember. But if you could give us an update where you are with capacity and how you can supply -- how easy it will be to supply the Europe and the U.S. Second question is just on this allowing going out to sort of 21 kilos or 6 years. My previous understanding was that the dosing was weight-based and dosing so far, I think, has only gone to 6 to 8 months old. So are there any safety concerns with going up to higher doses of the IV infusion? And do you think doctors will be comfortable given the lack of data going beyond the age of 2 or so? And then finally, given you talked about COVID-19, perhaps you might give us an idea of some therapies that might be benefiting under the COVID-19 scenario. It seems to me that Entresto might benefit from the situation given the potential that ACE inhibitors might impact COVID morbidity and mortality. So maybe you could give us an idea of what you're seeing there.

Thank you, Richard. So on capacity, Dave?

Yes. So stepping back, let's remember, we've made tremendous investments to expand capacity and gene therapy. And we believe and I think can easily prove that we are, by far, the most advanced and one of the largest gene therapy manufacturers in the world. We have -- as a reminder, we have started our North Carolina facility back in 2018, and that will be coming online towards the end of this year. We bought our Colorado facility early last year, and that looks to be coming online at the end of this year. At least for upstream manufacturing, that will allow us to massively expand some of our upstream capacity. We've also expanded our research manufacturing capacity in our San Diego facility as well as had an extended partnership or expanded our partnership with Paragon, now owned by Catalent, to allow for CMO-based manufacturing. And we hope that their capacity will also come online in the middle of this year. So we made tremendous investments to expand capacity, and that will continue, and a lot of those pieces are now coming into place as we expand our launches around the world. We're also working diligently to make sure that we can manage the production at our Libertyville facility, especially under the COVID-19 conditions. And we're seeing robust performance by the team there. We actually had our best month in March in terms of our production targets. And so things are going very well from that point of view, and we feel really confident about being able to launch effectively in the European market and we anticipated that. So we see capacity, as you mentioned, somewhere around 1,000 doses from a pure single site perspective, but that will massively expand as these other facilities come online over the next 12 to 18 months.

And then, Dave, the next question was on safety, which assets are just...

And then, yes, just on the use -- yes. So Richard, I want to clarify on the use there, right? So let's remember that this is an evolving space. We are learning a lot as we go with this therapy. The FDA approval was based on only about 40 patients that were in those initial studies. Those patients were under 8.5 kilograms. But actually, the FDA approved us up to 13.5 kilograms. So we had a whole population of weight where we didn't have experience. And now what we've seen is we have actually gained that experience being on the U.S. market. We've actually put that data together. As I mentioned in the -- at MDA, we presented data on 335 patients, and we show a safety profile that's entirely consistent regardless of weight range in -- at least in that population that's studied so far. And we have treated patients over 13 kilograms, and we have treated some patients in our managed access programs over 2 years of age. And so we see the extension to 21 kilograms or the extension to be able to treat, honestly, any patients at any way as a natural development as we've gotten more and more safety data into our database. And we believe that's what the CHMP opinion is based on, which is that comfort that actually the dose that we're actually giving patients on a weight basis is basically the same. While we give more total Zolgensma on a weight basis, the effect is the same, and the safety profile is, therefore, consistent over weight. And therefore, we've expanded now to up to this 21-kilogram population. But let's note that we now have extensive experience all the way up to 13.5 kilograms. And we anticipate that within Europe, we'll quickly get experience in even heavier kids. And then I turn it back to you on COVID-19.

Yes, exactly. Yes. I think on COVID-19, Rich, what I can say in broad terms is we're not seeing significant impact on demand for our products broadly, and I think we see a few dynamics. One, clearly for oncology medicines, home-administered medicine, medicines that can be received through mail or the pharmacy, et cetera, we're seeing very robust demand. We are also seeing many countries in Europe and in the United States 90-day prescriptions or longer being provided, which, of course, that leads to an increase in demand as well. So those are the dynamics that we're observing. We'll, of course, provide more detail in Q1 on a kind of product-by-product basis. But we're not, at the moment, seeing any significant impacts. We did see some, I would say, dynamics in China, but those have largely stabilized. And I'd say overall in Q1, now China in aggregate is about where we would have expected it to be. So I think when we give you the product-by-product Q1 data, we can discuss on individual product lines at that point in time. And I did want to note as well, we did have one question in the webcast, before I take the next question from the TC from Seamus Fernandez, which was the same as Richard's question regarding safety concerns with increased volumes of AAV administered. And I think Richard -- sorry, Dave has answered that question. But Seamus, please let us know if you have any other questions via the webcast.

Your next question is from the line of Laura Sutcliffe of UBS.

Firstly, given what you're seeing in your START long-term follow-up, do you expect the Zolgensma being used alone or followed up maybe with other therapies? And does that impact what you do in any way when it comes to, say, patient monitoring and checking how those patients get on in the long term? And then my second question is a follow-up to Richard's question, which is do you eventually intend to manufacture all of your Zolgensma in-house? And if the answer to that is yes, how far away are you from being able to do that?

Thanks, Laura. So I think both to you, Dave.

Yes. So on the START long-term follow-up, I think what's important to note is we believe that most of those patients have continued on single therapy that they received many years ago and has continued to do very well, stable production, no loss of major motor milestones. And we have seen patients gain motor milestones after completion of the initial study. And those gains have exclusively come on monotherapy. Of course, there is a need -- or sorry, of course, there is demand from patients -- from parents to try to do best for their patients. And often, we see, when patients come out of clinical trials, and that's any clinical trials across all products, they often look for alternative therapies to continue to try to get increasing and increasing benefit for their patients. Our experience to date has been that we do not see anecdotally or clinically in our trials or our experience any benefit from combination therapy. And therefore, we believe that currently, monotherapy still is the right way to go, and we believe that gene therapy is the foundation of treatment and should be considered for all patients who are accessible to the labeled indication in those regions. I think on the -- your second question was then on...

The manufacturing on the -- third-party manufacturing.

Yes, so we -- yes, so let me just say, we manufacture all of Zolgensma ourselves today. And we are on that path. We engaged with Paragon to expand our manufacturing capacity with a third party as an option and to give us that flexibility and that redundancy in our system. It was amenable for us to do that quickly because they already had experience with clinical manufacturing for us, and they do a number of clinical manufacturing projects for our pipeline assets. But we are also in the process of building out the capability to do our own clinical manufacturing in our North Carolina facility. We do believe that partnership with the industry will be -- or across the industry will be important as we are still very much in first-generation technologies for AAV. And we want to make sure that we stay at the forefront of that, both in terms of our own capacity to develop and research new gene therapy manufacturing technologies, but also in close partnership with the leaders in the field like Paragon, Catalent who can help us advance this early generation technology. So I'll turn it over to you.

Great. Thank you, Laura, and thank you, Dave.

Your next question is from the line of -- one moment, please. Your next question is from the line of Mike Nedelcovych of Cowen.

We've heard from a KOL that even if the IT clinical hold is lifted now with no new developments, there may be some residual hesitation due to potential DRG toxicity. I'm curious, do you think the additional preclinical data you're collecting might assuage any lingering concerns? Or are there other data that perhaps are clinical that might be presented that could address those concerns?

Yes, I'll start, and then maybe, Dave, you could you chime in. We've done a thorough assessment of all of the clinical trial patients that we've had as well as in-market patients. And we have seen no indications of any sort of sensory findings, which would be related to these preclinical DRG findings. So we think our clinical package is robust, and we have not received further questions from the FDA regarding clinical data. But maybe, Dave, if you want to add more color to where we are and...

Yes, I would just highlight and remind you, this is an effect that had been seen across many products across many years, has been a known potential signal in the AAV9 space in particular for a while. And there are many programs out there that are running today with intrathecal formulations of AAV9 that the FDA has allowed to go forward, even though -- even in the presence of these findings and these findings with other programs. So I think there is a acceptance to some extent that this is a potential signal in the preclinical setting. As Vas mentioned, we've gone through extensive analysis of our data to date, and we don't really see this materializing in the human setting and in the clinical setting or any clinical manifestations of this safety signal so far. And important to note, if we go back on the actual findings that we saw within the nonhuman primate studies we've conducted to date was that these were consistent findings, but they were not occurring in every DRG segment. They were not incurring in every neuron or every cell in the DRG and therefore, that there's a good explanation for why these effects may happen and why they then are not clinically manifesting. We're, of course, studying this extensively, and we look forward to reporting more on the time course of this, the nature of the inflammation that we see and more proof or at least evidence why this may not be manifesting clinically and therefore, is really, when you look at the disease of SMA, really just continues to be a very positive risk -- benefit/risk for the IT formulation in these patients.

And just to give you a sense of -- it's present in less than 1% of the DRGs even at the nonhuman primates. It's understandably why it might be clinically salient.

We have one more question from the line of Jo Walton of Crédit Suisse.

A couple of questions. You've talked in the U.S. about experience up to 13.5 kilograms, and you're going to be getting an approval in Europe of up to 21 kilograms. Perhaps you can tell us a bit about the experience that you have in patients between that 13.5- and 21-kilogram level. And if I was a doctor in Europe, would I look to say to a patient in that or the parents of a patient in that upper age range, no, let's wait for the intrathecal or be a guinea pig and go in being one of very few at that higher weight? And if you do get lots of experience in Europe, could you use this as perhaps a quicker way to expand higher-weight patients in the U.S. rather than waiting for the intrathecal, which appears to have more issues? And my second question is relating to your experience in Europe. You've told us that you've got a number of novel approaches to deal with pricing. You've said that you need to sort of re-envisage this because they're theoretically paying upfront for something that they might take years and years to accumulating costs. I wonder if you can give us any anecdotal evidence or any help on what degree of adoption you think for the more novel approaches you have will be or whether in reality, the likelihood is that governments will just pay up as in a one lump sum.

Thanks for the questions, Jo. So Dave, you want to start with the experience, 13.5 to -- and I would want to note, Jo, there is no weight cap on the EU approval. It's just our presentation is limited up to a certain weight. But go ahead, Dave, on the use in those heavier kids.

Yes. So there -- because the label in the U.S. was 13.5 kilograms, we don't have a lot of patients who are above that weight. But let's remember that this is, again, very consistent with how many rare disease products are approved, which is that they are often approved outside of the label. In addition, I would note that there are many gene therapy, AAV gene therapy products being used in much heavier kids around the world or in clinical trials that are approved. So if you look at the DMD setting or other settings, there are situations where much higher doses are being used in much larger children. And so the safety, I would go back to the safety signal that we see is consistent, which is that regardless of weight, we are not seeing any increases or any changes in the overall safety profile for these kids. With regards to the specifics of how doctors will interpret that, we very much anticipate that they're obviously going to start with patients where they're most comfortable. At the same time, there may be many parents who are pushing, especially at the upper limit of the age range -- of the weight range, who would like to get access to the therapy urgently. And that's something we saw in the U.S., where we did see a lot of kids coming into very much -- very early on at the higher weights because of their urgency to treat before they aged or weighted out of the access to the therapy. And so we anticipate that, yes, doctors would prefer to take that, but many will be pressed into a situation where they have to make a decision about if they're going to treat a larger patient or not. I don't think we'll see people necessarily waiting for the IT formulation when they have something that's in hand today. And then the second question was on the access programs and what we anticipate. We anticipate that almost every payer in the market will take up some form of one of these options form. But that's what we see in the U.S. It's been much more in the outcomes-based guarantees arena that we've seen adoption in the U.S., but we anticipate that governments will engage on these different options. I think to the point about pay over time is usually one of the least agreed options to use. So we do anticipate that many folks will pay upfront. And in all cases, we do anticipate booking sales, the majority of sales upfront with the proper setbacks for any agreements or long-term pieces that we have in place for those contracts.

Well, thank you, David. I want to thank everyone for joining the call. I really appreciate it. We hope that it was helpful to get the update both on Zolgensma, both on our overall program as well as the STRONG clinical data. We'll continue to keep you up to speed on this program as well as other programs. And if we don't speak before, we'll look forward to talking more at Q1. So wish everyone good health and safety and appreciate it, and we'll speak again soon. Thank you.

That concludes the presentation. Thank you for participating. You may disconnect.